Montana Nonprofit Compliance: Formation, Annual Reports, Taxes, Employment, Fundraising, Gaming, and Closure

Direct answer: separate systems, and two rules that travel badly from other states

A Montana nonprofit is built out of systems that do not talk to each other. Title 35, chapter 2 creates the corporation. The Internal Revenue Service decides federal exemption. The Department of Revenue decides income tax, property tax and employer withholding on three separate tests. The Department of Labor and Industry runs unemployment insurance, workers' compensation, employment verification and the minimum wage. The Department of Justice licenses gaming. The Commissioner of Political Practices handles lobbying and campaign finance. Satisfying any one of these says nothing about the others.

Two Montana rules regularly catch people who arrive with habits from another state. The first is that Montana imposes no general use sales tax, so the familiar hunt for a nonprofit exemption certificate has no object here. The second is that workers' compensation does not wait for a headcount. Montana does not use a general five employee threshold, and an employer with any covered employee must secure an authorized plan of coverage unless a statutory exclusion applies.

The third thing worth knowing before anything else is what this guide does not answer. Montana's statewide charitable solicitation posture could not be established in either direction from current official sources. Rather than publish a registration rule or a blanket exemption, the guide marks those facts VERIFICATION IN PROGRESS and says what to confirm before soliciting.

Form the corporation and choose the classification

The state law entity is a Montana nonprofit corporation under the Montana Nonprofit Corporation Act. Incorporating does not itself create federal tax recognition, Montana income tax exemption, property tax exemption or any activity permit, and treating the filed certificate as proof of exemption is where a lot of later trouble starts.

The articles must designate the corporation as public benefit, mutual benefit or religious. This is not a formality. The designation changes which governance rules apply and which charitable asset protections attach, and it is the reason a later merger or dissolution may need an Attorney General notice. Montana law classifies by the designation in the articles, so federal section 501(c)(3) recognition does not convert a corporation to public benefit on its own.

The filing itself goes through Montana Business Filings, and the current standard fee for nonprofit Articles of Incorporation is $20. Optional 24 hour and 1 hour expedited processing are separate services with separate fees. A nonprofit formed in another state takes a different route: it needs a Montana certificate of authority before transacting business here when Title 35 requires it, currently $15, and section 35-2-820 lists activities that do not amount to transacting business.

Keep an agent, keep a board

A qualifying Montana registered agent has to be maintained continuously, at formation or foreign qualification and after it, with the public record kept current. Commercial and noncommercial registered agent mechanics differ, so the choice is worth making deliberately rather than defaulting to whoever signed the articles.

The board must consist of three or more individuals under MCA section 35-2-415. That floor is Montana statute. It is not the IRS suggesting a governance practice, and a two person board is not a Montana nonprofit corporation that complies with its own organic statute. Special purpose statutes or the organization's own governing documents can require more than three.

The annual report, and what the 2026 waiver actually covers

The Secretary of State annual report is filed each year in the statutory window that runs from January 1 through April 15. It is a corporate status filing. It does not substitute for a federal Form 990, for Montana tax filings, or for any activity specific report, and no other filing substitutes for it.

For the 2026 filing cycle the Secretary of State lists the annual report filing fee as waived for a report filed by April 15. That is an expressly waived fee rather than an inferred zero, and it is worth being precise about its edges. The waiver attaches to a timely 2026 filing. The current amount for a report filed after April 15 is $35 and is a separate fact. A further waiver announced for 2027 is a future posture and is not a 2026 filing rule.

Two questions about corporate status are not answered here. The exact administrative dissolution timing for a delinquent domestic nonprofit, and the complete nonprofit specific reinstatement package, are both VERIFICATION IN PROGRESS. The old nonprofit reinstatement part of the statute is repealed and the current general guidance is written for business entities at large, so the nonprofit answer is confirmed with the Secretary of State rather than assumed.

Fundraising, and the part that is still open

The honest answer on Montana charity registration is that this research could not establish one. No reviewed current official source affirmatively created a general statewide initial registration duty for an ordinary Montana charity, and none affirmatively created a categorical exemption either. A false negative would hide unregistered solicitation and a false positive would invent a filing, so the guide states the uncertainty and names what to confirm with the Department of Justice Office of Consumer Protection before soliciting.

Telephone fundraising sits in a different statute and does have a verified answer. The Montana Telemarketing Registration and Fraud Prevention Act exempts specified religious, charitable, political and educational noncommercial solicitation from the Act's registration and bonding requirements. That exemption is limited to registration and bonding. It is not a universal exemption from calling rules, from consumer protection law, or from federal do not call obligations, and a paid third party's own position is tested on its own conduct rather than inherited from the charity.

Charitable assets and the Attorney General

A public benefit or religious corporation that merges has to give the Montana Attorney General the statutory notice at least 20 days before the covered merger is consummated, unless the statutory path permits earlier action. The Secretary of State Articles of Merger fee is currently $20 and no separate notice fee is established.

Dissolution carries its own separate notice. For a public benefit or religious corporation, the Attorney General notice is given at or before the Articles of Dissolution are delivered to the Secretary of State. These are different triggers with different timing, and an extraordinary disposition of all or substantially all assets outside the ordinary course carries a third rule again. Mutual benefit corporations follow different charitable asset rules throughout.

Three taxes, three tests

Montana income tax exemption is a Department of Revenue determination, not a consequence of the IRS letter. The organization registers with the Department first and then submits Form EXPT, the Tax-Exempt Status Request Form for Income Taxes, with the supporting documentation the current instructions require. Some organizations qualify under Montana law without an IRS letter, and the documentation differs in that case.

Sales tax is the shortest section in any Montana guide. There is no general use sales tax, so there is no nonprofit sales tax exemption application and no exemption number for ordinary transactions. What survives that are the activity specific taxes: alcohol, accommodations, lodging, resort and gambling taxes can each still apply, and local taxes are their own question.

Property tax exemption is a third, separate application. It is generally due March 1 for consideration in the current tax year, subject to current acquisition and statutory exceptions, and it turns on the state statutory ownership and use criteria under MCA section 15-6-201 rather than on federal recognition. Acreage limits, a future use branch and unrelated business use each add their own conditions on top.

Becoming an employer opens five systems, not one

Paying Montana wages means registering separately with the Department of Revenue for wage withholding. Forming the corporation does not create that account, and the account has its own reporting and closure rules.

Unemployment insurance is a different agency and a different trigger. Montana's general employer definition uses an annual payroll of $1,000 or more in the current or preceding calendar year, and charitable employment is expressly included by MCA section 39-51-203. A four workers in 20 weeks rule borrowed from a neighbouring state does not apply in Montana. Once liability exists, a qualifying section 501(c)(3) organization may elect the reimbursable method of payment instead of experience rated contributions, while still filing quarterly wage reports.

Workers' compensation is a third trigger and the one most often misremembered. Montana does not use a general five employee threshold. An employer with any covered employee must secure an authorized plan of coverage before that employee performs work unless a statutory exclusion applies, and nonprofit status is not itself an exclusion.

The last two are quick but easy to miss. Each newly hired employee is reported to the Montana New Hire Reporting Program within 20 days after hire. And the LEGAL Act, effective since July 1, 2025, authorizes the Department of Labor and Industry to verify that an employer confirmed worker identity and legal work authorization for covered new workers. The current Department page states that the Act does not require employers to use E-Verify, so compliant identity and work authorization records are the goal rather than enrolment in a federal system. The 2026 minimum wage is $10.85 per hour for covered employees, and nonprofit status is not a general wage or overtime exemption.

Events: raffles, casino nights and alcohol are three permissions

An organization that wants to sell raffle tickets online registers once with Gambling Control Division Form 46 before its first online raffle. The current form describes that registration as one time. It authorizes online raffles and nothing broader, so it is not a general licence for other online gambling, and an ordinary offline raffle runs on its own rules rather than on the Form 46 registration.

A casino night is a separate permission again. It uses Form 11, carries a current $25 permit fee, and the application must be received at least 10 working days before the event. Ordinary bingo licensing and special bingo sessions are two further separate paths.

Alcohol is not a gaming question. Selling beer or table wine at a qualifying fundraising event runs through the Department of Revenue Alcoholic Beverage Control special permit at $10 per day, subject to event, service and local law enforcement approval conditions. The permit does not authorize every beverage or every location, and the exact application lead time is VERIFICATION IN PROGRESS because the current Form SPECPERM states two different periods. Submit early enough to satisfy the more conservative instruction and confirm the operative deadline with the Division.

Advocacy: lobbying, campaign finance and the federal prohibition

The current Montana lobbying threshold is $3,000 for the 2025 to 2026 biennium. It is adjusted each biennium under MCA section 5-7-112, which is why it should be rechecked rather than memorised, and why official Montana pages still displaying lower prior figures do not control the current answer.

Montana campaign finance is a separate system from lobbying. When the organization's activity crosses a current committee trigger, the appropriate political committee registers electronically in CERS using the applicable form, with C-2 due within five days after the applicable trigger under current guidance. Ballot issue advocacy that meets no statutory trigger should not be converted into a committee by assumption.

One narrower rule sits alongside these. ARM 44.11.507 prohibits knowingly soliciting or enabling foreign national financial involvement in a statewide ballot issue campaign. Its scope is statewide ballot issues, and extending it to local measures needs separate authority. None of this displaces the federal section 501(c)(3) prohibition on candidate campaign intervention, which is a third rule with its own consequences.

Local licensing, and closing properly

Montana Commerce states plainly that no state agency issues a general business license and that city and county offices handle general business licensing. That moves the question to the specific locality where the organization operates. It is not a statement that no state activity specific or professional licence exists, and those remain separate.

Closing is the mirror image of opening. Articles of Dissolution end the corporate filing path and close nothing else. Department of Revenue tax accounts, withholding, unemployment insurance, workers' compensation coverage, gaming registrations and permits, alcohol permits, lobbying and campaign accounts and local permits each have their own final return, termination or closure process. Only accounts the organization actually holds need closing, and final obligations can survive dissolution until they are completed.

The complete Montana guide carries 134 structured compliance facts with 87 official sources, at /states/montana/. Every fact shows its own status: 124 are labelled SOURCE VERIFIED and 10 are labelled VERIFICATION IN PROGRESS. SOURCE VERIFIED means the proposition was confirmed against a current official source. VERIFICATION IN PROGRESS means current official material did not settle it, and the card says what is unresolved, what to do meanwhile and who can confirm it. Those ten are shown rather than hidden.