Montana Form Pt-Agr Draft - Pass-Through Entity Owner Tax Agreement Page 3
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4Form PT-AGR Instructions
New! The 2015 Montana legislature passed laws revising
disregarded for federal income tax purposes, partnerships
the requirements to remit tax or pay composite tax on
that have elected under IRC § 761 to be excluded from the
behalf of its owners. As a result, the second tier pass-
partnership tax rules, qualified subchapter S subsidiaries
through entity owner statement, Form PT-STM, has been
and qualified REIT subsidiaries.
eliminated. The pass-through entity owner tax agreement,
If an owner of a pass-through entity is another pass-
Form PT-AGR, has been expanded and now includes a
through entity, the owner is a second-tier pass-through
new entity type, domestic second-tier pass-through entity.
entity. Do not file Form PT-AGR unless the owner qualifies
Purpose of agreement. Each nonresident individual,
as domestic second-tier pass-through entity.
nonresident trust or estate, foreign C corporation or
A "domestic second-tier pass-through entity" is a pass-
domestic second-tier pass-through entity who is an owner
through entity whose interest is entirely held, either directly
of a pass-through entity that agrees to file a Montana tax
or indirectly, by one or more resident individuals.
return and pay any applicable tax has to complete this
form. This agreement is not valid unless it is signed and
To qualify as a domestic second-tier pass-through entity,
dated by the owner.
you must:
If the owner does not 1) complete and sign this agreement
● provide the name, address and social security or
or 2) participate in the pass-through entity’s composite
federal employer identification number of each of the
return, the pass-through entity has to remit tax to the
domestic second-tier pass-through entity's partners,
Department of Revenue on behalf of the owner.
shareholders, members or other owners;
This agreement applies to foreign C corporation owners
● establish that all of the domestic second-tier pass-
that are not engaged in or doing business in Montana. If
through entity's share of Montana source income
a foreign C corporation owner does engage in or conduct
should be fully accounted for in a resident individual
business in Montana, then the foreign C corporation
income tax return; and
owner does not complete this agreement. The foreign
● agree to notify the first-tier pass-through entity and the
C corporation should instead file a Montana corporation
department if the ownership of the domestic second-tier
income tax return.
pass-through entity and, if applicable, the ownership of
All second-tier pass-through entities that do not qualify as
any higher-tier pass-through entities changes.
a domestic second-tier pass-through entity are required
Agreement Revocation
to have tax remitted on their behalf or be included on a
composite tax return of the first-tier pass-through entity.
Failure of any nonresident individual, nonresident
trust or estate, or foreign C corporation owner to file
File an agreement. A pass-through entity
a return or to pay taxes. If the owner does not file a
can electronically file the Form PT-AGR
Montana tax return or timely pay all taxes as required by
through our website. Filing electronically
the tax agreement, the Department of Revenue may notify
is simple and secure. In addition, the
the pass-through entity that the tax agreement is no longer
pass-through entity will receive confirmation that the form
in effect. Following that notice, the pass-through entity
was filed. For more information, visit revenue.mt.gov and
can no longer rely on the tax agreement. The entity will
check out Trans-Action Portal (TAP).
then be required to pay tax on behalf of the owner to the
The Form PT-AGR can also be mailed to:
Department of Revenue unless that owner is included in
the entity’s composite return.
Montana Department of Revenue
Attn: Form PT-AGR
Change in ownership. The department may revoke the
P.O. Box 5805
waiver provided for a domestic second-tier pass-through
Helena, MT 59604-5805
entity if it determines that the partner, shareholder, member
or other owner no longer qualifies as a domestic second-
The pass-through entity is not required to file a new
tier pass-through entity. The department will notify the
agreement each year, but does have to file currently
first-tier pass-through entity in writing of its requirement to
effective agreements for each new qualifying owner and
withhold on the second-tier pass-through entity.
has to retain the agreements of other owners as tax
records. Form PT-AGR is due by the due date, including
Revoke an agreement. If the owner chooses to revoke a
extensions, of the pass-through entity's return.
previously filed tax agreement, the owner completes parts
1, 2 and 4 of a new Form PT-AGR. If an owner revokes
Types of pass-through entities. A pass-through entity
the tax agreement and then chooses to reinstate a tax
is classified in Montana by its treatment for federal
agreement for a future tax year, the owner will have to file a
income tax purposes. Partnerships include limited liability
new Form PT-AGR. The owner must also provide a copy of
companies that are treated as partnerships. S corporations
the Form PT-AGR that revokes the agreement to the pass-
include limited liability companies that are treated as S
through entity so that the pass-through entity is aware that
corporations. Disregarded entities include single-member
the agreement is no longer in effect.
limited liability companies whose separate existence is
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