Is Montana right for you?
Montana’s headline feature is the complete absence of a statewide sales tax — not a low rate, none. Combined with a $20 annual report and a modest filing fee, the cost of forming and holding a Montana LLC is among the lowest in the country.
The state is best known in formation circles for vehicle registration, an arrangement that has drawn increasing scrutiny from other states and is not something we set up. For ordinary online businesses, though, Montana is simply a cheap, quiet, low-friction state.
Balance it against a flat 5.9% income tax on Montana-sourced income and a filing process that moves at its own pace. Neither is a problem for a business earning elsewhere, but neither is Montana the automatic answer that Wyoming often is.
- Businesses that want no sales tax exposure in their home state
- Low-volume or holding companies where every fixed cost matters
- Founders who value a quiet, low-scrutiny jurisdiction
- Flat 5.9% income tax on Montana-sourced income
- Processing is slower than Wyoming, Colorado or Florida
- Little brand recognition with banks compared with Delaware or Florida
What Montana taxes
A summary, not advice — your actual position depends on where you live, where your customers are, and how the company is treated federally.
Income tax
Flat 5.9% on Montana-sourced income
Sales tax
None statewide — one of only five states with no sales tax
Franchise tax
None
Montana for a non-resident founder
Entirely open to non-residents and cheap to maintain, but less familiar to banks than Wyoming or Florida, which can make account opening marginally harder.
What Montana asks for every year
Formation is the easy part. These are the obligations that keep the company alive — and the ones people forget.
- 01
Annual Report
Due by 15 April every year. $20, filed online. Missing it leads to involuntary dissolution.
- 02
Registered Agent
A physical Montana address, maintained continuously.
- 03
BOI Report
Filed federally, with updates due within 30 days of any ownership change.