Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.248 - NUMERATOR OF RECEIPTS FACTOR - SALE OF A SERVICE

Current through Register Vol. 13, July 5, 2024
(1) The receipts from a sale of a service are
				in Montana if and to the extent that the service is delivered to a location in
				Montana. In general, the term "delivered to a location" refers to the location
				of the taxpayer's market for the service, which may not be the location of the
				taxpayer's employees or property. The methods to determine the location of the
				delivery of service in the context of several specific types of service
				transactions are set forth in this rule.
(2) In-person services.
(a) Except as otherwise provided in this
				rule, in-person services are services that are physically provided in person by
				the taxpayer, where the customer or the customer's real or tangible property
				upon which the services are performed is in the same location as the service
				provider at the time the services are performed. This includes situations where
				the services are provided on behalf of the taxpayer by a third-party
				contractor. Examples of in-person services include, without limitation,
				warranty and repair services; cleaning services; plumbing services; carpentry;
				construction contractor services; pest control; landscape services; medical and
				dental services including medical testing, x-rays, and mental health care and
				treatment; child care; haircutting and salon services; live entertainment and
				athletic performances; and in-person training or lessons. In-person services
				include services within the description above that are performed at a location
				that is owned or operated by the service provider or a location of the
				customer, including the location of the customer's real or tangible personal
				property. Various professional services, including legal, accounting,
				financial, and consulting services, and other similar services, although they
				may involve some amount of in-person contact, are not treated as in-person
				services within the meaning of this rule.
(b) Method of determination. Except as
				otherwise provided, if the service provided by the taxpayer is an in-person
				service, the service is delivered to the location where the service is
				received. Therefore, the receipts from a sale are in Montana if and to the
				extent the customer receives the in-person service in Montana. In assigning its
				receipts from sales of in-person services, a taxpayer must first attempt to
				determine the location where a service is received as follows:
(i) If the service is performed with respect
				to the body of an individual customer in Montana (i.e., haircutting or x-ray
				services) or in the physical presence of the customer in Montana (i.e., live
				entertainment or athletic performances), the service is received in
				Montana.
(ii) If the service is
				performed with respect to the customer's real estate in Montana or if the
				service is performed with respect to the customer's tangible personal property
				at the customer's residence or in the customer's possession in Montana, the
				service is received in Montana.
(iii) If the service is performed with
				respect to the customer's tangible personal property and the tangible personal
				property is to be shipped or delivered to the customer, whether the service is
				performed within or outside Montana, the service is received in Montana if the
				property is shipped or delivered to the customer in Montana.
(c) Method of reasonable
				approximation. In an instance in which the state or states where a service is
				actually received cannot be determined, but the taxpayer has sufficient
				information regarding the place of receipt from which it can reasonably
				approximate the state or states where the service is received, the taxpayer
				shall reasonably approximate such state or states. If the state to which the
				receipts are to be assigned can be determined or reasonably approximated, but
				the taxpayer is not taxable in that state, the receipts that would otherwise be
				assigned to that state are excluded from the denominator of the taxpayer's
				receipts factor.