Montana Code Annotated 2019



Part 3. Allocation and Apportionment of Income

Water's-Edge Election Period -- Consent -- Change Of Election

15-31-324. Water's-edge election period -- consent -- change of election. (1) A water's-edge election may be made by a taxpayer and is effective only if every affiliated corporation subject to the taxes imposed under this chapter consents to the election. Consent by the common parent of an affiliated group constitutes consent of all members of the group. An affiliated corporation that becomes subject to taxes under this chapter after the water's-edge election is considered to have consented to the election. The election must disclose the identity of the taxpayer and the identity of any affiliated corporation, including an affiliated corporation incorporated in a tax haven as set forth in 15-31-322(1)(f), in which the taxpayer owns directly or indirectly more than 50% of the voting stock of the affiliated corporation.

(2) Except as provided in subsections (3) and (4), each water's-edge election must be for 3-year renewable periods.

(3) A water's-edge election may be changed by a taxpayer before the end of each 3-year period only with the permission of the department. In granting a change of election, the department shall impose reasonable conditions that are necessary to prevent the avoidance of tax or clearly reflect income for the election period prior to the change.

(4) A taxpayer subject to the provisions of 15-31-322(1)(f) who has a water's-edge election that is in effect for tax periods beginning both before and after October 1, 2003, may rescind the election for any tax period beginning after October 1, 2003.

History: En. Sec. 4, Ch. 616, L. 1987; amd. Sec. 5, Ch. 521, L. 2003.