House Bill No. 82
Introduced By hibbard
By Request of the Department of Revenue
A Bill for an Act entitled: "An Act generally revising the laws governing corporate taxes; reducing the periods of limitation applicable to corporations for taxation and refund purposes; replacing the 10 percent penalty on delinquent corporate tax returns with a graduated percentage; amending sections 15-31-111, 15-31-509, 15-31-510, 75-2-220, and 75-5-516, MCA; and providing an immediate effective date and a retroactive applicability date."
Be it enacted by the Legislature of the State of Montana:
NEW SECTION. Section 1. Graduated delinquent penalty for corporate taxpayers. If the tax for any corporation is not paid on or before the due date of the return, as provided in 15-31-111(2), or if the tax is not paid on or before the due date of the return, as provided in 15-31-111(3), there is assessed a penalty of 1% of the tax due, increasing by 1% for each 30-day period that the tax or any fraction of the tax remains unpaid, up to a maximum penalty of 25% of the tax due. This penalty must be assessed unless it is shown that failure to file was due to a reasonable cause and was not due to neglect.
Section 2. Section 15-31-111, MCA, is amended to read:
"15-31-111. Return to be filed. (1) Each corporation subject to the license tax imposed under this chapter shall for each tax period file a true and accurate return of its net income for the tax period in the manner and form prescribed by the department of revenue. The return must contain all of the facts, data, and information that are appropriate and in the opinion of the department necessary to determine the correctness of the net income returned and to carry out the provisions of this chapter. The return must be signed by the president, the vice president, the treasurer, the assistant treasurer, or the chief accounting officer.
(2) If the corporation is reporting on a calendar year basis, the return must be filed with the department on or before May 15 following the close of the calendar year. If the corporation is reporting on a fiscal year basis, the return must be filed with the department on or before the 15th day of the 5th month following the close of its fiscal year.
(3) (a) A corporation is allowed an automatic extension of time for filing its return of up to 6 months following the date
prescribed for filing of its tax return. The tax and interest must be paid when the return is filed. Interest must be added to
the tax due as provided in 15-31-510
(b) The department may grant an additional extension of time for the filing of a return whenever in its judgment good cause exists.
(4) Receivers, trustees in bankruptcy, or assignees operating the property or business of a corporation subject to the license tax imposed by this chapter shall make the return in the same manner and form as the corporation is required to make the return. Any license tax due on the basis of the return is assessed and collected in the same manner as if assessed directly against the corporation of whose business or property the receiver, trustee, or assignee has custody and control. The receiver, trustee, or assignee shall pay the tax out of the property of the corporation, prior to the claims of creditors or stockholders."
Section 3. Section 15-31-509, MCA, is amended to read:
"15-31-509. Periods of limitation. (1) Except as otherwise provided in
this section and in 15-31-544 and this section, no
a deficiency shall may not be assessed or collected with respect to the year for which a return is filed unless the notice of
additional tax proposed to be assessed is mailed within 5 3 years from the date that the return was filed. For the purposes of
this section, a return filed before the last day prescribed for filing shall be is considered as filed on such the last day. Where
When, before the expiration of the period prescribed for assessment of the tax, the taxpayer consents in writing to an
assessment after the time, the tax may be assessed at any time prior to the expiration of the period agreed upon. The
limitations prescribed for giving notice of a proposed assessment of additional tax shall may not apply when:
(a) the taxpayer has by written agreement suspended the federal statute of limitations for collection of federal tax
if the suspension of the limitation set forth in this section shall last lasts:
(i) only so long as the suspension of the federal statute of limitation; or
(ii) until 1 year after any federal changes have become final or any amended federal return is filed as a result of
suspension of the federal statute, whichever is the latest in time; or
(b) a taxpayer has failed to file a report of changes in federal taxable income or an amended return, as required by
5 3 years after the federal changes become final or the amended federal return was filed, whichever the
case may be.
No A refund or credit shall may not be allowed or paid with respect to the year for which a return is filed after 5 3 years
from the last day prescribed for filing the return or after 1 year from the date of the overpayment, whichever period expires
the later, unless before the expiration of such the period the taxpayer files a claim therefor for the refund or credit or the
department of revenue has determined the existence of the overpayment and has approved the refund or credit thereof. If
the taxpayer has agreed in writing under the provisions of subsection (1) of this section to extend the time within which the
department may propose an additional assessment, the period within which a claim for refund or credit may be filed or a
credit or refund allowed in the event no a claim is not filed shall must automatically be so extended.
(3) If a claim for refund or credit is based upon an overpayment attributable to a net loss carryback adjustment as provided in 15-31-119, in lieu of the 3-year period provided for in subsection (1), the period must be the period that ends with the expiration of the 15th day of the 41st month following the end of the tax year of the net loss that results in the carryback.
(4) If the year of the net operating loss is open under either state or federal waivers, the year to which the loss is carried back will remain open for the purposes of the loss carryback and for 12 months following the expiration of the state or federal waiver, even though the claim would otherwise be barred under this section."
Section 4. Section 15-31-510, MCA, is amended to read:
"15-31-510. Estimated payments -- interest penalty -- tax returns -- penalty -- interest. (1) For corporations failing to make estimated payments according to the schedule provided in 15-31-502(2), there is assessed a 20% a year underpayment interest penalty calculated as follows:
(a) The amount of underpayment is the amount of the required installment set forth in 15-31-502 that exceeds the amount, if any, of the installment paid on or before the last date prescribed for payment.
(b) Notwithstanding the provisions of subsection (1)(a), the interest penalty with respect to an underpayment of any installment may not be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of the installment equals or exceeds the amount that would have been required to be paid on or before that date if the estimated tax were an amount equal to 80% of the tax for the taxable year, computed by placing on an annualized basis the taxable income:
(i) for the first 3 months of the taxable year in the case of the installment required to be paid in the 4th month;
(ii) for the first 3 months or for the first 5 months of the taxable year in the case of the installment required to be paid in the 6th month;
(iii) for the first 6 months or for the first 8 months of the taxable year in the case of the installment required to be paid in the 9th month; and
(iv) for the first 9 months or for the first 11 months of the taxable year in the case of the installment required to be paid in the 12th month of the taxable year.
(c) For purposes of subsection (1)(b), the taxable income must be placed on an annualized basis by:
(i) multiplying by 12 the taxable income referred to in subsection (1)(b); and
(ii) dividing the resulting amount by the number of months in the taxable year (3, 5, 6, 8, 9, or 11, as the case may be) referred to in subsection (1)(b).
(d) Notwithstanding the provisions of subsections (1)(a) through (1)(c), the interest penalty with respect to an underpayment of any installment may not be imposed if the total amount of all payments of estimated tax made on or before the last date prescribed for the payment of the installment equals or exceeds 80% of the amount determined under subsection (1)(e).
(e) To determine the amount for any installment:
(i) take the taxable income for all months during the taxable year preceding the filing month;
(ii) divide the amount by the base period percentage for all months during the taxable year preceding the filing month;
(iii) determine the tax on the amount calculated under subsection (1)(e)(ii); and
(iv) multiply the tax computed under subsection (1)(e)(iii) by the base period percentage for the filing month and all months during the taxable year preceding the filing month.
(f) For purposes of this subsection (1):
(i) the base period percentage for any period of months is the average percentage that the taxable income for the corresponding months in each of the 3 preceding taxable years bears to the taxable income of the 3 preceding years;
(ii) the term "filing month" means the month in which the installment is required to be paid;
(iii) this subsection (1) applies only if the base period percentage for any 6 consecutive months of the taxable year equals or exceeds 70%; and
(iv) the department of revenue may by rule provide for the determination of the base period percentage in the case of reorganizations, new corporations, and other similar circumstances.
If the tax for any corporation is not paid on or before the due date of the return as provided in 15-31-111(2) or if the tax
is not paid on or before the due date of the return as provided in 15-31-111(3), there is assessed a penalty of 10% of the
amount of the tax due, unless it is shown that the failure was due to reasonable cause and not to neglect. (3) If any tax due under this chapter is not paid when due under 15-31-111(2) as provided in [section 1], by reason of
extension or otherwise, interest is added to the tax due at the rate of 12% a year from the due date until paid."
Section 5. Section 75-2-220, MCA, is amended to read:
"75-2-220. Fees -- special assessments -- late payment assessments. (1) Concurrent with the submittal of a permit application required under this chapter and annually for the duration of the permit, the applicant shall submit to the department a fee sufficient to cover the reasonable costs, direct and indirect, of developing and administering the permitting requirements in this chapter, including:
(a) reviewing and acting upon the application;
(b) implementing and enforcing the terms and conditions of the permit. This amount does not include any court costs or other costs associated with an enforcement action. If the permit is not issued, the department shall return this portion of the fee to the applicant.
(c) emissions and ambient monitoring;
(d) preparing generally applicable regulations or guidance;
(e) modeling, analysis, and demonstrations;
(f) preparing inventories and tracking emissions;
(g) providing support to sources under the small business stationary source technical and environmental compliance assistance program; and
(h) all other costs required to be recovered pursuant to Subchapter V of the federal Clean Air Act, 42 U.S.C. 7661, et seq.
(2) In recovering the costs described in subsection (1), the department may assess an application fee based on estimated actual emissions or an annual fee based on actual emissions of air pollutants regulated under this chapter, including but not limited to volatile organic compounds, each air pollutant regulated under section 7411 or 7412 of the federal Clean Air Act, 42 U.S.C. 7401, et seq., and each air pollutant subject to a national primary ambient air quality standard.
(3) The board shall by rule provide for the annual adjustment of all fees assessed for operating permit applications under 75-2-217 and 75-2-218 to account for changes to the consumer price index, as required by Subchapter V of the federal Clean Air Act.
(4) In addition to the fee required under subsection (1), the board may order the assessment of additional fees required to fund specific activities of the department that are directed at a particular geographic area if the legislature authorizes the activities and appropriates funds for the activities, including emissions or ambient monitoring, modeling analysis or demonstrations, or emissions inventories or tracking. Additional assessments may be levied only on those sources that are within or are believed by the department to be impacting the geographic area. Before the board may require the fees, it shall first determine, after opportunity for hearing, that the activities to be funded are necessary for the administration or implementation of this chapter, that the amount of the requested fees is appropriate, that the assessments apportion the required funding in an equitable manner, and that the department has obtained the necessary appropriation. The contested case provisions of the Montana Administrative Procedure Act, Title 2, chapter 4, part 6, apply to a hearing before the board under this subsection.
(5) (a) If the applicant or permitholder fails to pay in a timely manner a fee required under subsection (1), in addition to the fee, the department may:
(i) impose a penalty not to exceed 50% of the fee, plus interest on the required fee computed at the rate contained in
(ii) revoke the permit consistent with those procedures established under this chapter for permit revocation.
(b) Within 1 year of revocation, the department may reissue the revoked permit after the applicant or permitholder has paid all outstanding fees required under subsections (1) and (4), including all penalties and interest provided for under this subsection (5). In reissuing the revoked permit, the department may modify the terms and conditions of the permit as necessary to account for changes in air quality occurring since revocation.
(c) The board shall by rule provide for the implementation of this subsection (5), including criteria for imposition of the sanctions described in this subsection (5).
(6) The board may by rule allow the reduction of a fee required under this section for an operating permit or permit renewal to account for the financial resources of a category of small business stationary sources.
(7) As a condition of the continuing validity of a permit issued by the department under this chapter prior to October 1, 1993, the board may by rule require the permitholder to pay the fees under subsections (1) and (4).
(8) For an existing source of air pollutants that is subject to Subchapter V of the federal Clean Air Act and that is not required to hold an air quality permit from the department as of October 1, 1993, the board may, as a condition of continued operation, require by rule that the owner or operator of the source pay the fees under subsections (1) and (4).
(9) (a) The department shall give written notice of the fee to be assessed and the basis for the department's fee assessment under this section to the owner or operator of the air pollutant source. The owner or operator may appeal the department's fee assessment to the board within 20 days after receipt of the written notice.
(b) An appeal must be based upon the allegation that the fee assessment is erroneous or excessive. An appeal may not be based on the amount of the fee contained in the schedule adopted by the board.
(c) If any part of the fee assessment is not appealed, it must be paid to the department upon receipt of the notice required in subsection (9)(a).
(d) The contested case provisions of the Montana Administrative Procedure Act, Title 2, chapter 4, part 6, apply to a hearing before the board under this subsection (9).
(10) The department may not charge more than one fee annually to a source of air pollutants for the costs identified in subsection (1)."
Section 6. Section 75-5-516, MCA, is amended to read:
"75-5-516. Fees authorized for recovery -- process -- rulemaking. (1) The board shall by rule prescribe fees to be assessed by the department that are sufficient to cover the board's and department's documented costs, both direct and indirect, of:
(a) reviewing and acting upon an application for a permit, permit modification, permit renewal, certificate, license, or other authorization required by rule under 75-5-201 or 75-5-401;
(b) reviewing and acting upon a petition for a degradation allowance under 75-5-303;
(c) reviewing and acting upon an application for a permit, certificate, license, or other authorization for which an exclusion is provided by rule from the permitting requirements established under 75-5-401;
(d) enforcing the terms and conditions of a permit or authorization identified in subsections (1)(a) through (1)(c). If the permit or authorization is not issued, the department shall return this portion of any application fee to the applicant.
(e) conducting compliance inspections and monitoring effluent and ambient water quality; and
(f) preparing water quality rules or guidance documents.
(2) The rules promulgated by the board under this section must include:
(a) a fee on all applications for permits or authorizations, as identified in subsections (1)(a) through (1)(c), that recovers to the extent permitted by this subsection (2) the department's cost of reviewing and acting upon the applications. This fee may not be more than $5,000 per discharge point for an application addressed under subsection (1), except that an application with multiple discharge points may be assessed a lower fee for those points according to board rule.
(b) an annual fee to be assessed according to the volume and concentration of waste discharged into state waters. The annual fee may not be more than $3,000 per million gallons discharged per day on an annual average for any activity under permit or authorization, as described in subsection (1), except that:
(i) a permit or authorization with multiple discharge points may be assessed a lower fee for those points according to board rule; and
(ii) a facility that consistently discharges effluent at less than or equal to one-half of its effluent limitations and that is in compliance with other permit requirements, using the previous calendar year's discharge data, is entitled to a 25% reduction in its annual permit fee. Proportionate reductions of up to 25% of the permit fee may be given to facilities that consistently discharge effluent at levels between 50% and 100% of their effluent limitations. However, a new permittee is not eligible for a fee reduction in its first year of operation, and a permittee with a violation of any effluent limit during the previous calendar year is not eligible for a fee reduction for the following year.
(3) To the extent permitted under subsection (2)(b), the annual fee must be sufficient to pay the department's estimated cost of conducting all tasks described under subsection (1) after subtracting:
(a) the fees collected under subsection (2)(a);
(b) state general fund appropriations for functions administered under this chapter; and
(c) federal grants for functions administered under this chapter.
(4) For purposes of subsection (3), the department's estimated cost of conducting the tasks described under subsection (1) is the amount authorized by the legislature for the department's water quality discharge permit programs.
(5) If the applicant or holder fails to pay a fee assessed under this section or rules adopted under this section within 90 days after the date established by rule for fee payment, the department may:
(a) impose an additional assessment consisting of not more than 20% of the fee plus interest on the required fee computed
at the rate established under 15-31-510
(b) suspend the permit or exclusion. The department may lift the suspension at any time up to 1 year after the suspension occurs if the holder has paid all outstanding fees, including all penalties, assessments, and interest imposed under subsection (5)(a).
(6) Fees collected pursuant to this section must be deposited in an account in the special revenue fund type pursuant to 75-5-517.
(7) The department shall give written notice to each person assessed a fee under this section of the amount of fee that is assessed and the basis for the department's calculation of the fee. This notice must be issued at least 30 days prior to the due date for payment of the assessment.
(8) A holder of or an applicant for a permit, certificate, or license may appeal the department's fee assessment to the board within 20 days after receiving written notice of the department's fee determination under subsection (7). The appeal to the board must include a written statement detailing the reasons that the permitholder or applicant considers the department's fee assessment to be erroneous or excessive.
(9) If part of the department's fee assessment is not in dispute in an appeal filed under subsection (8), the undisputed portion of the fee must be paid to the department upon written request of the department.
(10) The contested case provisions of the Montana Administrative Procedure Act, provided for in Title 2, chapter 4, part 6, apply to a hearing before the board under this section.
(11) A municipality may raise rates to cover costs associated with the fees prescribed in this section for a public sewer system without the hearing required in 69-7-111."
NEW SECTION. Section 7. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 15, chapter 31, part 5, and the provisions of Title 15, chapter 31, part 5, apply to [section 1].
NEW SECTION. Section 8. Retroactive applicability. [Sections 1 and 4] apply retroactively, within the meaning of 1-2-109, to tax years beginning after December 31, 1996.
NEW SECTION. Section 9. Effective date. [This act] is effective on passage and approval.