Starting a Business in Montana: Licenses, Permits & Requirements (2026)

Last updated: May 4, 2026

Three structural facts define what it costs and what it requires to start a business in Montana. First, Montana is one of five states with no general sales tax — no collection, no remittance, no filing. For most Montana businesses this means zero sales tax administration, which is a meaningful operational advantage. Second, Montana just updated its individual income tax to a two-bracket system under HB 337, effective 2026: 4.7% on the first $47,500 (single) or $95,000 (married filing jointly), and 5.65% above those thresholds. This replaced the older graduated structure and represents a meaningful reduction from Montana’s previous top rate of 6.75%. Third, Montana workers’ compensation kicks in at one employee — no minimum headcount, no industry exemption — and you are expected to be insured before you hire anyone.

Montana’s economy runs on three engines that have no parallel in most other states: agriculture (wheat, cattle, barley, pulse crops — Montana is a top-five wheat producer nationally), tourism (Yellowstone and Glacier together draw over 6 million visits per year, concentrated into a short summer season from May through September), and natural resource extraction (Bakken oil extension into eastern Montana, hard-rock mining legacy in Butte and the Clark Fork Basin, timber in western counties). Any small business in Montana operates against this backdrop — your customers and employees come from these sectors, your seasonal demand patterns follow them, and your market size is constrained by Montana’s sparse population of approximately 1.1 million spread across 147,040 square miles, the fourth-largest state by land area.

Montana’s regulatory structure routes most business licensing through two agencies: the Montana Department of Labor and Industry (DLI) handles construction contractors, cosmetology, barbers, private security, and employment law; the Montana Department of Public Health and Human Services (DPHHS) handles food service, childcare, and public health licensing. The Secretary of State handles business entity formation. The Department of Revenue handles taxes. If you know those four agencies, you know where to look for nearly every state-level compliance requirement.

Montana Business Requirements at a Glance

Requirement	Agency / Portal	Cost	Timeline
LLC Articles of Organization	Montana Secretary of State — biz.sosmt.gov	$35 online; $70 mail	3-5 business days standard; 24-hr expedite +$20; 1-hr +$100
Annual Report (LLC)	Montana Secretary of State	WAIVED through April 15, 2026 (normally $20/year); $15 late fee if missed	Due April 15 each year
Assumed Business Name (DBA)	Montana Secretary of State — biz.sosmt.gov	$20; valid 5 years; $20 renewal	Processed online; immediate to several days
Federal EIN	IRS.gov	Free	Immediate online
Sales Tax License	N/A — Montana has no general sales tax	N/A	N/A
Individual Income Tax (pass-through LLC)	Montana Department of Revenue — TAP portal	4.7% (up to $47,500 single / $95,000 MFJ); 5.65% above — HB 337	Register via DOR TAP before first payroll
Corporate Income Tax (C-corp)	Montana Department of Revenue	6.75% flat; $50 minimum	Annual return due April 15 (or 30 days after federal return)
Unemployment Insurance (UI)	Montana DLI UI Division — uieservices.mt.gov	New employer ~1.0%; UI wage base $47,300 (2026)	Register before first payroll; quarterly filing
Workers’ Compensation Insurance	Montana State Fund or private carrier	Varies by payroll and classification (NCCI rates)	Required at 1+ employee; before first hire
New Hire Reporting	mt-newhire.com	Free	Within 20 days of hire date
Local Business License	City or county clerk’s office	Varies ($25-$150 typical)	Before opening; annual renewal

How to Start a Business in Montana (Step by Step)

Step 1: Choose Your Business Structure and Form Your Entity

Most Montana small business owners choose an LLC for liability protection and pass-through taxation. Montana processes LLC filings through the Secretary of State’s e-filing portal at biz.sosmt.gov.

LLC (most common for small businesses)

Online filing fee: $35. Mail filing: $70. Montana does not offer same-day standard processing — standard turnaround is 3-5 business days. Expedited options: 24-hour processing for an additional $20, 1-hour processing for an additional $100. Annual report (normally $20/year, due April 15) is waived through 2026; Secretary of State Christi Jacobsen has also pre-announced the 2027 annual report fee will be waived.

Registered Agent

Every Montana LLC must maintain a registered agent with a physical Montana street address (P.O. boxes are not permitted). You may serve as your own registered agent if you have a Montana physical address. Commercial registered agent services typically run $49-$150/year.

Assumed Business Name (DBA)

If you operate under any name other than your LLC’s legal name, file an Assumed Business Name registration at biz.sosmt.gov. Fee: $20. Valid for 5 years, renewable for $20. Unlike some states, Montana processes DBAs at the state level only — no county-level filing required.

Sole Proprietorship

No state registration required if operating under your own legal name. If you use a business name, file an Assumed Business Name for $20. Sole proprietors have no personal liability protection — a single judgment can attach to personal assets. An LLC at $35 is inexpensive protection.

Corporation (C-corp or S-corp)

Montana corporations file Articles of Incorporation through the Secretary of State ($70 online, $140 mail). C-corporations pay the 6.75% Montana corporate income tax. S-corporations are pass-through entities for Montana tax purposes. Corporations must file an annual report by April 15 (fee waived through 2026).

Step 2: Register for Federal and State Tax Accounts

Federal EIN

Apply free at IRS.gov. Every multi-member LLC, any LLC with employees, and any LLC opening a business bank account should have an EIN. Single-member LLCs without employees can use the owner’s Social Security Number but an EIN is better practice for separating business and personal finances.

Montana Income Tax

Montana’s individual income tax uses a two-bracket structure effective 2026 under HB 337: 4.7% on taxable income up to $47,500 (single) or $95,000 (married filing jointly), and 5.65% on income above those thresholds. For pass-through LLCs, members report business income on their individual Montana returns. Long-term capital gains are taxed separately at 3.0% (lower) and 4.1% (upper bracket). The corporate income tax is a flat 6.75% with a $50 annual minimum. Register through the Montana Department of Revenue’s TransAction Portal (TAP) at mtrevenue.gov, or submit the paper Business Registration Form (GenReg) to DOR.

No General Sales Tax

Montana is one of five states — along with Alaska, Delaware, New Hampshire, and Oregon — with no general state or local sales tax. For most businesses, this means no sales tax permit, no collection, and no sales tax returns. Two narrower taxes exist: a Lodging Facility Tax of 8% (4% Lodging Facility Sales Tax + 4% Lodging Facility Use Tax) applies to hotels, motels, and short-term rentals. Some resort communities levy a local resort tax of up to 3% on restaurant meals, lodging, and certain retail sales within resort districts (Whitefish, West Yellowstone, Red Lodge, Gardiner). If your business is outside those categories, no sales tax obligation applies.

Employer Withholding

If you have Montana employees, register to withhold Montana income tax from their wages through the DOR TAP portal. File Form MW-1 (quarterly withholding return). Thresholds for payment frequency (monthly vs. quarterly) depend on total withholding liability.

Unemployment Insurance (UI)

Register with the Montana Department of Labor and Industry, Unemployment Insurance Division, before your first payroll at uieservices.mt.gov. The 2026 UI taxable wage base is $47,300 per employee per year. The new employer rate is approximately 1.0% for most industries (2.0% for construction). Experience-rated employers may receive rate reductions — 2025 legislation reduced rates for more than 32,000 Montana employers. File quarterly UI tax reports through the same portal.

Step 3: Get Workers’ Compensation Insurance

Montana requires workers’ compensation coverage for any employer with one or more employees, including part-time and seasonal workers. There is no minimum headcount threshold and no industry exemption — if you hire anyone, you need coverage before that person’s first day. Sole proprietors with no employees are exempt but may opt in voluntarily.

Coverage options: purchase from any licensed private insurer, or obtain coverage through the Montana State Fund at montanastatefund.com. Montana State Fund is a nonprofit public corporation chartered by the state legislature — it is the largest carrier and serves as the insurer of last resort, but it operates in a competitive private market (unlike monopoly-fund states such as Wyoming and Ohio, Montana allows private insurers to compete). Non-compliance penalties: double the premium owed, minimum $200, plus repayment to the Uninsured Employer’s Fund for any claims paid. Verify workers’ comp regulations at erd.dli.mt.gov/work-comp-regulations.

Common NCCI workers’ comp classification codes for Montana small businesses: 5183 (HVAC), 9586 (hair salon/cosmetology), 9059 (daycare), 9082 (food truck/restaurant), 0042 (landscaping/groundskeeping), 9014 (commercial cleaning offices), 0917 (residential domestic cleaning), 7720 (private investigator).

Step 4: Understand Montana’s Labor Law Landscape

Minimum Wage (2026)

Montana’s minimum wage is $10.85 per hour, effective January 1, 2026. The rate is indexed annually to the Consumer Price Index under voter initiative I-151 and MCA § 39-3-409 — the increase for 2026 reflects a 2.92% CPI adjustment from the 2025 rate of $10.55. There is no tip credit in Montana: tipped employees receive the same $10.85/hr minimum as all other employees. Small employers with gross annual sales under $110,000 are exempt from the state minimum and subject only to the federal $4.00/hr small-employer minimum (verify threshold with DLI Labor Standards at erd.dli.mt.gov/labor-standards/).

Not Right-to-Work

Montana is not a Right-to-Work state. Workers can be required to join a union or pay union dues as a condition of employment in unionized workplaces. Montana voters have rejected Right-to-Work ballot initiatives multiple times. This makes Montana distinctively different from neighboring Idaho, Wyoming, and North Dakota, all of which are Right-to-Work. For small business owners, this means union organizing is legally permitted and union security agreements can be enforced.

Montana Wrongful Discharge from Employment Act (WDEA)

Montana is the only U.S. state with a statute explicitly limiting at-will employment after a probationary period. Under MCA § 39-2-904, once an employee has completed probationary employment (defined as the first 6 months, unless a longer period up to 1 year is established in writing), the employer must have “good cause” to terminate. Good cause means a “legitimate business reason” that is not “false, whimsical, arbitrary or capricious.” This creates meaningful exposure for Montana employers in termination decisions — document performance issues and follow progressive discipline policies.

Paid Family Leave

Montana has no state paid family and medical leave program. Federal FMLA applies to employers with 50+ employees. Montana’s Parental Leave Act (MCA § 49-2-310) prohibits employers with 1+ employees from discriminating against employees who take unpaid parental leave of up to 12 weeks following childbirth or adoption — but this is a non-discrimination provision, not a paid leave mandate.

New Hire Reporting

Report all new hires to the Montana New Hire Reporting Program within 20 days of the hire date at mt-newhire.com. This applies to full-time, part-time, and seasonal employees. Failure to report triggers civil penalties.

Step 5: Get Industry-Specific Licenses

Montana has no statewide general business license. Licensing is handled at two levels: (1) local business licenses from your city or county, and (2) state-level occupational licenses for regulated industries. Most Montana cities require a local business license — contact your city or county clerk’s office for current fees and application procedures.

State-level occupational licensing runs through two agencies. The Montana DLI Business Standards Division licenses contractors (Construction Contractor Registration), cosmetologists, barbers, private security and investigators, and several other professions. The Montana DPHHS licenses food service establishments (including food trucks) and childcare facilities.

Key industry-specific licenses

• HVAC contractors: No state HVAC license exam. Register as a Construction Contractor (CCR) with DLI for $70 if you have employees, or get an Independent Contractor Exemption Certificate (ICEC) for $125 if operating as a sole proprietor. Federal EPA Section 608 certification required for refrigerant work. See the Montana HVAC guide.
• Hair salons / cosmetology: Montana Board of Barbers and Cosmetologists requires 2,000 hours of training for a cosmetology license — one of the higher requirements nationally. Individual license fee: $80 (biennial renewal). Salon establishment license: $85 application + $150 inspection. See the Montana hair salon guide.
• Childcare / daycare: DPHHS Early Childhood and Family Support Division licenses all childcare facilities. Staff ratios vary by age: 1:4 for infants under 2 years, 1:8 for ages 2-3, 1:10 for age 4, 1:14 for age 5+. License renewal every 2 years. See the Montana daycare guide.
• Food trucks: DPHHS Environmental Health and Food Safety Section licenses mobile food establishments. Commissary required. Certified Food Protection Manager (CFPM) required. Local county health departments administer permits in most areas. See the Montana food truck guide.
• Landscaping (pesticide application): Montana Department of Agriculture Pesticide Section requires a Commercial Pesticide Applicator license ($85, 4-year renewal) for any commercial use of pesticides, herbicides, or fungicides. Core exam plus category-specific exam required (80% minimum). See the Montana landscaping guide.
• Private investigators: Montana Board of Private Security (under DLI, MCA Title 37 ch. 60) requires 5,400 documented hours of qualifying experience, a written examination, and $500,000 minimum general liability insurance. No surety bond required. See the Montana private investigator guide.
• Cleaning services: No state cleaning license required. No sales tax on cleaning services (Montana has no general sales tax). Workers’ comp required at 1+ employee. See the Montana cleaning service guide.

Step 5b: Montana’s Cannabis Business Environment

Montana legalized recreational adult-use cannabis on January 1, 2022, under Initiative I-190 approved by voters in November 2020. The Montana Department of Revenue Cannabis Control Division (mtrevenue.gov/cannabis/) oversees licensing for cultivators, manufacturers, dispensaries, and testing laboratories. Montana imposes a 20% tax on adult-use cannabis sales. The cannabis market creates ancillary business opportunities — particularly for cleaning services (dispensary cleaning), HVAC contractors (cultivation facility climate control), and security services operating near cannabis facilities.

Montana’s Major Business Markets

Montana’s largest city and commercial hub is Billings (Yellowstone County, approximately 120,000 city / 185,000 MSA), home to ExxonMobil’s Billings refinery, the CHS Laurel refinery, Phillips 66 operations, and two major healthcare systems (Billings Clinic and SCL Health St. Vincent). The oil/gas refining sector drives significant demand for HVAC, industrial cleaning, and skilled trades across the eastern part of the state. Billings also serves as the retail, medical, and logistics hub for a five-state trade area encompassing eastern Montana, Wyoming, and western North Dakota.

Missoula (Missoula County, approximately 80,000 city / 125,000 MSA) is home to the University of Montana (approximately 10,000 students), a significant healthcare presence (Providence St. Patrick Hospital, Community Medical Center), and one of Montana’s strongest environmental nonprofit and outdoor recreation business sectors. Missoula’s college-town economy creates year-round demand that partially offsets Montana’s seasonal patterns.

Great Falls (Cascade County, approximately 60,000) is defined by Malmstrom Air Force Base, home to the 341st Missile Wing responsible for approximately one-third of the U.S. ICBM arsenal. Military families and federal contractors drive predictable demand for housing, childcare, cleaning, and food service. Agriculture (dryland wheat) is the secondary economic driver for the surrounding region.

Bozeman (Gallatin County, approximately 60,000 city / 120,000+ MSA) is Montana’s fastest-growing city, driven by Montana State University (approximately 17,000 students), the tech sector (RightNow Technologies acquisition by Oracle catalyzed a broader tech migration), and proximity to Yellowstone National Park via Bozeman Yellowstone International Airport. Bozeman attracts affluent remote workers and second-home buyers at a rate that has pushed real estate prices to levels comparable to mid-tier Colorado Front Range communities. This wealth concentration creates strong demand for premium service businesses — upscale food trucks, spa/salon services, landscaping, and residential cleaning.

Helena (Lewis and Clark County, approximately 35,000) is the state capital and home to state government employment, Carroll College, and St. Peter’s Health. As capitals go, Helena is small — the smallest state capital by population among the lower 48. Government contracts and state agency relationships are the primary business drivers.

Butte (Silver Bow County, approximately 35,000 — a consolidated city-county since 1977) has a copper mining legacy (Anaconda Copper Mining Company operated the world’s largest open-pit copper mine here into the 1980s), Montana Tech (engineering and mining programs), and an ongoing federal Superfund remediation effort for the Berkeley Pit. The economy has diversified into healthcare, education, and small manufacturing.

Kalispell and Whitefish (Flathead County, approximately 35,000 / 10,000) serve as the gateway to Glacier National Park and the Flathead Valley resort economy. Whitefish Mountain Resort, Glacier Park International Airport, and substantial second-home ownership by out-of-state buyers drive seasonal peaks in nearly every service sector from May through September and again during ski season (December through March).

Eastern Montana (Sidney, Glendive, Miles City) is part of the Williston Basin / Bakken formation oil patch that extends from western North Dakota. When oil prices are strong, these communities have full employment and high wages that create demand for all service categories. Oil price volatility creates business cycle risk that more diversified markets don’t face.

Seven Federally Recognized Tribes

Montana has seven federally recognized tribes operating across seven reservations that cover approximately 9% of the state’s land area: Blackfeet Nation (Glacier County), Crow Nation (Bighorn County), Northern Cheyenne Tribe (Rosebud and Big Horn Counties), Confederated Salish and Kootenai Tribes (CSKT) (Lake and Sanders Counties — Flathead Reservation), Fort Belknap Indian Community (Blaine and Phillips Counties — home to Gros Ventre and Assiniboine peoples), Fort Peck Assiniboine and Sioux Tribes (Valley, Roosevelt, Daniels, and Sheridan Counties), and Rocky Boy’s Chippewa Cree Tribe (Hill County). Businesses operating on or near reservation land may encounter tribal licensing requirements, tribal employment laws, and tribal tax jurisdiction that differ from state law. Consult with tribal government offices before assuming Montana state law applies uniformly.

Cost to Start a Business in Montana

Item	Low Estimate	High Estimate
LLC Articles of Organization (online)	$35	$35 (+ $100 if 1-hour expedite)
Registered Agent (Year 1)	$0 (self)	$150 (commercial service)
Annual Report (2026)	$0 (waived)	$0 (waived)
Federal EIN	$0	$0
Local business license	$25	$150
State occupational license (if required)	$0 (not required for all)	$500+ (varies by industry)
Workers’ comp insurance (Year 1)	$500 (low-risk, minimal payroll)	$5,000+ (higher-risk, larger payroll)
General liability insurance	$500/year	$2,000+/year
Total first-year minimum	~$1,060	~$8,000+

Montana Business Guides by Industry

Choose your industry for a complete breakdown of every license, permit, and requirement specific to Montana:

• How to Start a Cleaning Service in Montana
• How to Start a Food Truck in Montana
• How to Start a Daycare in Montana
• How to Start an HVAC Business in Montana
• How to Start a Hair Salon in Montana
• How to Start a Landscaping Business in Montana
• How to Become a Private Investigator in Montana

Frequently Asked Questions

How much does it cost to form an LLC in Montana?

The online filing fee is $35 at biz.sosmt.gov. Mail filings cost $70. The annual report ($20/year normally, due April 15) is waived through 2026 — Secretary of State Jacobsen has also pre-announced the 2027 fee will be waived. Expedited options: +$20 for 24-hour processing or +$100 for 1-hour processing. Add $49-$150/year for a commercial registered agent if you can’t serve as your own.

Does Montana have a state sales tax?

No. Montana is one of five states — Alaska, Delaware, Montana, New Hampshire, and Oregon — with no general state or local sales tax. For most businesses, this means zero sales tax collection, zero sales tax remittance, and zero sales tax returns. Two narrower taxes apply: a Lodging Facility Tax of 8% (4%+4%) on hotels and short-term rentals, and local resort taxes of up to 3% in a handful of resort communities (Whitefish, West Yellowstone, Red Lodge, Gardiner). If your business doesn’t fall into those categories, no sales tax obligation exists.

What is the Montana income tax rate in 2026?

Montana uses a two-bracket individual income tax under HB 337 (effective 2026): 4.7% on taxable income up to $47,500 for single filers or $95,000 for married filing jointly, and 5.65% on income above those thresholds. Long-term capital gains are taxed separately at 3.0% and 4.1%. The flat corporate income tax rate is 6.75% with a $50 annual minimum. Montana switched to single-factor (sales-receipts) apportionment for multi-state businesses for tax years beginning after December 31, 2024.

Does Montana require workers’ compensation insurance?

Yes, for any employer with one or more employees, including part-time and seasonal workers. There is no minimum headcount threshold and no industry exemption. The Montana State Fund is the largest carrier and insurer of last resort (montanastatefund.com), but private insurers also compete in the Montana market. Sole proprietors with no employees are exempt but may opt in voluntarily. Non-compliance results in fines equal to double the premium owed (minimum $200) plus liability for any claims paid from the Uninsured Employer’s Fund.

Is Montana a Right-to-Work state?

No. Montana is not a Right-to-Work state and has rejected such measures at the ballot box. This distinguishes Montana from neighboring Idaho, Wyoming, and North Dakota. In practice, most Montana small businesses are non-union and are not directly affected, but it means union organizing is legally protected and union security agreements (requiring union dues as a condition of employment) can be enforced if a workplace becomes unionized.

What is the minimum wage in Montana in 2026?

$10.85 per hour, effective January 1, 2026. Montana’s minimum wage is indexed annually to the Consumer Price Index under voter initiative I-151 and MCA § 39-3-409. There is no tip credit — tipped employees receive the full $10.85/hr minimum. Small employers with gross annual sales under $110,000 are subject to the federal $4.00/hr small-employer rate (verify the current threshold with DLI Labor Standards).

Does Montana have paid family leave?

No. Montana has no state paid family and medical leave program. Federal FMLA covers employees at employers with 50+ employees (12 weeks unpaid). Montana’s Parental Leave Act (MCA § 49-2-310) requires employers of 1+ employees to allow unpaid parental leave of up to 12 weeks — but this is an anti-discrimination provision, not a paid benefit. Montana’s unique Wrongful Discharge from Employment Act (MCA § 39-2-904) also gives employees after the probationary period protections not found in most other states.