As discussed in Tax Alert 2018-0028, a corporation wishing to make a new water's-edge election, or renew an existing election starting in 2018 must file a Form WE-ELECT by March 31, 2018. Montana's corporate income tax requires members of a unitary business to file returns on a worldwide combined basis, unless a water's-edge election is made. While many states require a water's-edge election to be made by the due date or extended due date of the return for the year for which it is intended to be effective, Montana is unique in that a water's-edge election must be made within 90 days of the beginning of the first year in which it is first intended to become effective.

Implications

The Montana water's-edge election procedure is one of the most unique and frequently missed state elections. Taxpayers intending to make a water's edge election for calendar year 2018 are reminded that they must file the election by the March 31, 2018 statutory deadline. As described in the Alert, the Montana Department of Revenue does not grant extensions or waivers for missing this very important election filing deadline.

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