Montana Administrative Code

42.23.201 ACCOUNTING PERIODS (Is Hereby Repealed.) Authorizing statute(s): Sec. 15-31-501, MCA Implementing statute(s): Sec. 15-31-112, MCA History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; REP, 2002 MAR p. 3708, Eff. 12/27/02.

42.23.202 NOTICE OF ELECTION OF FISCAL YEAR (Is Hereby Repealed.) Authorizing statute(s): Sec. 15-31-501, MCA Implementing statute(s): Sec. 15-31-112, MCA History: Eff. 12/31/72; REP, 1982 MAR p. 104, Eff. 1/29/82.

42.23.203 CHANGE OF ACCOUNTING PERIOD (Is Hereby Repealed.) Authorizing statute(s): Sec. 15-31-501, MCA Implementing statute(s): Sec. 15-31-112, MCA History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; REP, 1996 MAR p. 1177, Eff. 4/26/96.

42.23.211 USE OF SEPARATE ACCOUNTING METHOD In applying the separate accounting method, each item of income is segregated and directly allocated according to its source. Any expense or other deductible items, including a reasonable allowance for general overhead expenses, attribu…

42.23.212 BASIS FOR DISPOSITION OF PROPERTY The basis for determining gain or loss from the sale or other disposition of property shall be the basis prescribed by the IRC and regulations in effect during the reporting period, except such provisions therein as are inconsistent wit…

42.23.301 PERIOD COVERED BY RETURN The return must be prepared and net income computed on the basis of an annual accounting period. A return may not be prepared for a period of more than 12 months. A return for a fractional part of a year is required in the following cases: when …

42.23.302 EXTENSION OF FILING TIME For years be-ginning on or after January 1, 1995, if a corporation cannot file its return within the prescribed time an automatic extension of up to six months following the statutory due date shall be granted. No form needs to be filed to recei…

42.23.303 CHANGE IN FEDERAL TAX OR RETURN Taxpayers are required to report to the department adjustments or corrections to their taxable income made by the IRS or other competent authority by filing an amended Montana corporate income tax return within 180 days of the final deter…

42.23.311 FILING REQUIREMENTS UPON MERGER OR CONSOLIDATION In case of either a merger or a consolidation of corporations, the absorbed corporations must file final returns covering the period between the close of the preceding reporting period and the date of merger or consolidat…

42.23.312 FILING REQUIREMENTS FOR INACTIVE CORPORATIONS Both foreign and domestic corporations which have either qualified to do business in Montana or are registered to do business in Montana and not engaged in business in Montana during the reporting period are required to file…

42.23.313 FILING REQUIREMENTS UPON DISSOLUTION, WITHDRAWAL, OR CESSATION OF BUSINESS When a domestic corporation seeks to dissolve, or when a foreign corporation seeks to withdraw or ceases business in Montana, the following requirements must be met for the purpose of obtaining a…

42.23.401 BUSINESS EXPENSES To be deductible as an "ordinary and necessary expense" within the meaning of 15-31-114 , MCA, a payment must have a direct relation to the business of the corporation and it must be shown that it is necessary to the taxpayer's business, that it is ord…

42.23.402 DEDUCTION FOR CERTAIN INTEREST INCOME (Is Here-by Repealed.) Authorizing statute(s): Sec. 15-31-501, MCA Implementing statute(s): Sec. 15-31-114, MCA History: Eff. 12/31/72; REP, 1982 MAR p. 104, Eff. 1/29/82.

42.23.403 TREATMENT OF OTHER TAXES PAID Taxes paid within the year, with the exception of the following taxes specifically excluded as deductions by statute are: Montana corporate income tax; taxes assessed against local benefits of a kind tending to increase the value of the pro…

42.23.404 DEPRECIATION AND OBSOLESCENCE A reasonable The basis upon which depreciation is to be computed shall be the same basis as used for federal income tax purposes. The method of depreciation used and the amount of the depreciation must be the same as that reported for feder…

42.23.405 DEPLETION ALLOWANCE In the case of mines, other natural deposits, oil and gas wells, and timber, a reasonable allowance for depletion may be claimed. With the exception of property with respect to which an election to claim percentage depletion has been exercised, the c…

42.23.406 CONTRIBUTIONS TO PENSION AND PROFIT SHARING PLANS Reasonable contributions made by an employer to a pension, annuity, stock bonus, or profit sharing plan will be considered deductible to the extent they constitute ordinary, necessary, and reasonable business expenses. T…

42.23.407 LIMITATION ON CHARITABLE CONTRIBUTION DEDUCTION The charitable contribution deduction provided for in 15-31-114 , MCA, cannot exceed 10% of the Montana taxable income or 10% of the income subject to apportionment for multistate corporations calculated without regard to …

42.23.411 LOSSES NOT COMPENSATED FOR A capital loss, which may be subject to carryover provisions for federal purposes, must be deducted in the year incurred and not carried over for state purposes. A loss must have been sustained within the year in the sense that the full measur…

42.23.416 ADJUSTMENT OF ALLOWABLE DEDUCTIONS (Is Hereby Repealed.) Authorizing statute(s): Sec. 15-31-501, MCA Implementing statute(s): Sec. 15-31-116, MCA History: NEW, 1983 MAR p. 1547, Eff. 10/28/83; AMD, 1985 MAR p. 375, Eff. 4/26/85; REP, 1996 MAR p. 1177, Eff. 4/26/96.

42.23.417 COMPUTATION OF ADJUSTMENT (Is Hereby Repealed.) Authorizing statute(s): Sec. 15-31-501, MCA Implementing statute(s): Sec. 15-31-116, MCA History: NEW, 1983 MAR p. 1547, Eff. 10/28/83; AMD, 1985 MAR p. 375, Eff. 4/26/85; REP, 1996 MAR p. 1177, Eff. 4/26/96.

42.23.418 DEDUCTIONS FOR CORPORATE DONATIONS OF COMPUTER EQUIPMENT TO SCHOOLS A taxpayer claiming a deduction for gifts of computer equipment as provided for in 15-31-114 , MCA, must attach the following information to the tax return claiming the deduction: a complete description…

42.23.420 STANDARD COMPONENTS AND PASSIVE SOLAR SYSTEMS Energy generating systems or their components that are standard components of conventional buildings do not qualify for the alternative energy system credit. The department is authorized to adopt rules defining standard comp…

42.23.421 DEDUCTION FOR INVESTMENT FOR ENERGY CONSERVATION A deduction is allowed for a portion of expenditures made for the purpose of conserving energy in buildings, both residential and nonresidential, used in the taxpayer's business. This deduction must be claimed on the form…

42.23.422 DETERMINATION OF CAPITAL INVESTMENT FOR ENERGY CONSERVATION In new construction no deduction is allowed for that portion of capital expense incurred in meeting established standards. In new buildings only the cost for that portion of a capital expenditure that is in exc…

42.23.423 TYPES OF APPROPRIATE INVESTMENTS FOR ENERGY CON - SERVATION PURPOSES The department has determined that the following capital investments are among those that can result in the conservation of energy: insulation in existing buildings of floors, walls, ceilings, and roof…

42.23.424 SALE OF LAND TO A BEGINNING FARMER - CORPORATE INCOME TAX DEDUCTION A deduction from Montana net income is allowed for each sale of 80 acres or more to a beginning farmer as provided in 80-12-211, MCA, provided the sale is approved by the agricultural loan authority. Th…

42.23.502 INVESTMENT CREDIT (Is Hereby Repealed.) Authorizing statute(s): Sec. 15-31-501, MCA Implementing statute(s): Sec. 15-31-123, MCA History: NEW, 1982 MAR p. 104, Eff. 1/29/82; AMD, 1983 MAR p. 1548, Eff. 10/28/83; AMD, 2000 MAR p. 1346, Eff. 5/26/00; REP, 2004 MAR p. 1965…

42.23.517 FULL-TIME JOBS (Is Hereby Repealed.) Authorizing statute(s): Sec. 15-31-127 and 15-31-501, MCA Implementing statute(s): Sec. 15-31-124, MCA History: NEW, Eff. 4/6/76; REP, 2004 MAR p. 1965, Eff. 8/20/04.

42.23.523 BUSINESS INVENTORY TAX (Is Hereby Repealed.) Authorizing statute(s): Sec. 15-31-501, MCA Implementing statute(s): Ch. 501, sec. 7, L. 1981 History: NEW, 1982 MAR p. 295, Eff. 2/12/82; REP, 1992 MAR p. 1764, Eff. 8/14/92.