BEFORE THE Department of REVENUE

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 42.26.601, 42.26.602, 42.26.606 and the repeal of ARM 42.26.603, 42.26.604, and 42.26.605 pertaining to revisions to railroad income apportionment factors

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NOTICE OF AMENDMENT AND REPEAL

 

TO: All Concerned Persons

 

1. On November 4, 2022, the Department of Revenue (department) published MAR Notice No. 42-1064 pertaining to the public hearing on the proposed amendment and repeal of the above-stated rules at page 2182 of the 2022 Montana Administrative Register, Issue Number 21.

 

2. On November 28, 2022, the department held a public hearing to consider the proposed amendment and repeal. The only attendee at the hearing was Robert Story, Executive Director of the Montana Taxpayers Association (Montax). Mr. Story also provided written comments on behalf of Montax. The department also received written comments from BNSF Railway Company (BNSF).

 

3. The department has amended and repealed the above-stated rules as proposed.

 

4. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:

 

COMMENT 1: Mr. Story provided commentary in support of the rulemaking because the proposed changes are in conformity with the process laid out in the Multistate Tax Commission compact contained in statute that allows for alternative apportionment methods for Montana corporate income taxes.  The compact anticipates that at times it will be necessary for the department to customize the process to apportion corporate income to fairly tax multi-state companies.

 

RESPONSE 1: The department thanks Mr. Story and Montax for their support and involvement in this rulemaking.

 

COMMENT 2: BNSF commented its support of the proposed changes to the railroad apportionment rules.  The proposed changes put in place a methodology that fairly represents railroad business activity in the state and is easy to administer as the data comes directly from regulated reporting to the federal Surface Transportation Board and the Montana Public Service Commission.

 

RESPONSE 2: The department thanks BNSF for its support and involvement in this rulemaking.

 

 

/s/ Todd Olson                                      /s/ David R. Stewart for                         

Todd Olson                                           Brendan Beatty

Rule Reviewer                                       Director of Revenue

 

Certified to the Secretary of State January 3, 2023.