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April 26, 2021

Montana legislature passes double-weighed sales factor

As part of a corporate income tax "modernization program," the Montana legislature on April 22, 2021, passed Senate Bill 376 (SB 376), which would change the Corporate Income Tax apportionment formula1 from an equally weighted three-factor formula to a double-weighted sales factor formula (i.e., property factor, plus the payroll factor, plus two times the sales factor and a denominator of four). Governor Greg Gianforte is expected to sign SB 376.

Adoption of the double-weighted sales factor apportionment formula would apply to tax years beginning after June 30, 2021.


Montana is one of a decreasing number of states that use the traditional equally-weighted three-factor apportionment formula. In a prior proposal (Senate Bill 181), the legislature considered adopting a single sales factor apportionment formula, but that proposal was tabled in committee. The move to a double-weighted sales factor would put Montana in line with the large majority of states that have weighted the sales factor more heavily. Taxpayers, particularly fiscal-year taxpayers, should consider the application of this new law for tax years beginning after June 30, 2021.


Contact Information
For additional information concerning this Alert, please contact:
State and Local Taxation Group
   • Bill Nolan (


1 Montana Code Ann. 15-1-601, Article 4, Section 9.