Montana lesson 5 of 6
Montana LLC taxes, licenses and the RV registration question
Montana has no LLC franchise tax and no general sales tax, but members of a pass-through LLC still owe Montana's individual income tax on their share of profit, and the rate structure just changed under new legislation.
How members are taxed
A Montana LLC taxed as a partnership or sole proprietorship for federal purposes passes income through to its members, who report their share on Montana's individual income tax return. House Bill 337 restructures the rates for the 2026 tax year to 4.7% and 5.65%, narrowing further for the 2027 tax year to 4.7% and 5.4%, with the bracket thresholds varying by filing status. Confirm the current year's brackets on the Department of Revenue's site before filing, since these figures apply specifically to the 2026 and 2027 tax years under the new law.
An LLC that elects C corporation tax treatment instead pays Montana's flat 6.75% Corporate Income Tax on its Montana taxable income.
Montana has no franchise tax or general sales tax, which is why its overall LLC cost structure is unusually low, but it is not tax-free for pass-through members with Montana-source income.
Licensing
Montana has no general statewide business license. Depending on your industry, you may need a license from a specific state board, for example in construction, healthcare, real estate or cosmetology, and some cities and counties layer on their own local permit requirements.
The RV and vehicle registration issue
Because Montana has no sales tax and comparatively low vehicle registration fees, some out-of-state buyers form a Montana LLC solely to register an RV, exotic car or other high-value vehicle through it in order to avoid their home state's sales and use tax. If you do not live in Montana and the vehicle is actually kept and used in your home state, that state can treat the arrangement as tax evasion, and several states have pursued enforcement action against owners doing this. Forming the LLC itself is legal; the risk comes from how the vehicle is actually used and where.
Key takeaways
- Pass-through members pay Montana's individual income tax, now 4.7%-5.65% for 2026 and 4.7%-5.4% for 2027 under HB 337.
- A C-Corp election pays Montana's flat 6.75% Corporate Income Tax instead.
- Using a Montana LLC to register an out-of-state vehicle can expose the owner to tax evasion claims in their home state.
Frequently asked questions
Does Montana have a franchise tax on LLCs?
No. Montana does not levy a franchise tax on LLCs. Only an LLC that elects C corporation tax treatment pays the state's 6.75% Corporate Income Tax.
Is it legal to register my RV through a Montana LLC?
Forming the LLC is legal, but if you do not live in Montana and the vehicle is actually garaged and used in your home state, that state may pursue the arrangement as tax evasion. Talk to a tax attorney before setting this up.
Official sources
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Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team