MontanaSB 6069th Legislature, Regular Session (2025)Senate

Revise insurance premium taxes for certain captive insurers

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 0 benefits, 1 costs, 3 mixed.

Premium taxes on captive insurers

Beginning January 1, 2026, Montana taxes captive insurers on premiums each year. Direct premiums: 0.4% on the first $20 million, then 0.3%, after subtracting return premiums (like dividends or returned deposits). Assumed reinsurance: 0.225% on the first $20 million, 0.150% on the next $20 million, then 0.050%; amounts already taxed as direct are excluded. A narrow exception applies to asset-for-liability transfers within commonly owned insurers when another insurer is wound down and the business is renewed with the captive. Only branch business of a branch captive is taxed, and multiyear policy premiums are split across tax years. Pay these taxes by March 1 each year.

Minimum tax and cap for captives

Beginning January 1, 2026, in Montana, if your combined direct and reinsurance taxes are under $5,000, you pay $5,000. In the year you are first authorized, the minimum is prorated: Q1 $5,000; Q2 $3,750; Q3 $2,500; Q4 $1,250. If you surrender that year, the schedule is reversed. For most captives, total tax cannot exceed $100,000 each year; this cap does not apply to protected cell captives or special purpose captives with series. Captives under common ownership are taxed as one company; “common” means 80%+ voting stock (stock companies) or 80%+ of surplus and voting power (mutuals).

New rules start with 2026 tax year

In Montana, the law applies to tax years that begin after December 31, 2025. In practice, the rules start with the 2026 tax year and later.

Separate tax rules for cells and series

Starting January 1, 2026, in Montana, each protected cell is counted separately when figuring a protected cell captive’s tax. Premiums from risks outside the cells must also be included in the company’s total. For a special purpose captive LLC, each series is treated separately for most taxes, but the $5,000 minimum applies across all series together.

Sponsors & Cosponsors

Sponsor

Mark Noland
Republican • Senate

Cosponsors

Ed Buttrey
Republican • House

Roll Call Votes

All Roll Calls

Yes: 289 • No: 7

House vote • 4/9/2025

Do Concur

Yes: 95 • No: 2

House vote • 3/25/2025

Do Concur

Yes: 99 • No: 1

Senate vote • 2/14/2025

Do Pass

Yes: 50 • No: 0

Senate vote • 2/7/2025