BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 42.17.203, 42.17.204,  42.17.218, 42.17.219, 42.17.221, 42.17.222, 42.17.223, and repeal of ARM 42.17.206, 42.17.207, 42.17.208, 42.17.209, 42.17.210 relating to withholding taxes

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT AND REPEAL

 

TO:  All Concerned Persons

 

1.  On February 11, 2010, at 8:30 a.m., a public hearing will be held in the Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, at Helena, Montana, to consider the amendment and repeal of the above-stated rules.

Individuals planning to attend the hearing shall enter the building through the east doors of the Sam W. Mitchell Building, 125 North Roberts, Helena, Montana.

 

2.  The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice.  If you require an accommodation, contact the Department of Revenue no later than 5:00 p.m., February 1, 2010, to advise us of the nature of the accommodation that you need.  Please contact Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-3696; or e-mail canderson@mt.gov.

 

3.  The rules proposed to be amended provide as follows, stricken matter interlined, new matter underlined:

 

            42.17.203  RECORDS TO BE KEPT BY EMPLOYER  (1)  As required by ARM 42.2.305, employers must keep employment records for each employee and make records available for review for five years.  Such records must show:

(a)  For each pay period:

(i)  the beginning and ending dates;

(ii)  the total wages, as defined in 15-30-201 15-30-2501, MCA, for employment in such pay period; and

(iii)  the number and date of weeks in which there were one or more employees.

(b) through (2) remains the same.

 (3)   The department is authorized to examine any and all records necessary for the administration of the withholding and estimated tax law (Title 15, chapter 30, part 2 25, MCA).  These records include, but are not limited to:

(a) through (g) remain the same.

(4)  These records and reports must be maintained by the employer for a period of five years and are open to periodic review by authorized representatives as provided in ARM 42.2.305.

 

AUTH: 15-30-305, 15-30-2620, MCA

IMP: 15-30-204, 15-30-2504, MCA

 

REASONABLE NECESSITY:  The department is proposing to amend ARM 42.17.203 to move, for purposes of clarity, the language that refers to the requirement for employers to maintain, and make available to the department, employee records for a period of five years into the first section of the rule rather than the last section.  The department is further amending the rule to correct the statutes found in the authority and implementing sections for this rule to reflect the changes made by the 2009 Legislature in House Bill 24, (Ch. 147, L. 2009), which recodified Title 15, chapter 30, Montana Code Annotated.

 

            42.17.204  REMITTANCE OF WITHHOLDING TAX BY EMPLOYERS

            (1)  Every employer must report information to the department on an approved payment coupon voucher provided by the taxpayer.  The remittance schedule is established annually by the department pursuant to 15-30-204, 15-30-2504, MCA.  The department may request any information from the employer necessary for the collection of the tax.

            (2)  All employers must complete and return this coupon payment voucher even if the employer did not pay any wages or withhold from employees during the pay period.

            (3) remains the same.

            (4)  If a due date falls on a weekend or holiday, the next business day becomes the due date for which the payment coupons voucher must be remitted.

 

            AUTH: 15-30-305, 15-30-2620, MCA

            IMP: 15-30-204, 15-30-2504, MCA

 

REASONABLE NECESSITY:  The department is proposing to amend ARM 42.17.204 to correct the name of the document the taxpayer submits to the department from a "coupon" to a "payment voucher" in order to make the rule consistent with the current forms used by the department.  The amendment to the authority and implementing statutes is necessary because the 2009 legislature enacted House Bill 24, (Ch. 147, L. 2009), which recodified the existing statutes in Title 15, chapter 30, Montana Code Annotated.

 

42.17.218  EMPLOYER REGISTRATION  (1)  Every employer required to withhold state individual Montana income tax must register for a Montana tax identification number on form GenReg, Registration/Application for Permit, which is provided by the department.  A new employer who has acquired the business of another employer must not use the predecessor's identification number.  Application for a Montana tax identification number shall be sent to:

the Department of Revenue,

P.O. Box 5805,

Helena, Montana 59604-5805.

 (2) and (3) remain the same.

 

AUTH: 15-30-305, 15-30-2620, MCA

IMP: 15-30-209, 15-30-2509, MCA

 

REASONABLE NECESSITY:  The department is proposing to amend ARM 42.17.218 to reference the correct name of the document provided by the department and to amend the authority and implementing statutes because the 2009 legislature passed HB 24, (Ch. 147, L. 2009), which recodified Title 15, chapter 30, Montana Code Annotated.  

 

42.17.219  FILINGS AND PAYMENTS DUE AFTER TERMINATION OF WAGE PAYMENTS  (1)  The following must be filed with the department within 30 days of ceasing to be an employer as defined in 15-30-201, 15-30-2501, MCA:

(a)  the payment coupon voucher with remittance for the final payroll period in which wages were paid;

(b)  the MW-3 with the W-2 form, reporting individual employee's wages and taxes withheld during the year to the date of termination of wage payments; and

(c)  annual filers must file the final MW3/AR  MW-3 with the W-2 form, reporting individual employee's wages and taxes withheld during the year to the date of termination of wage payments.

 

            AUTH: 15-30-305, 15-30-2620, MCA

            IMP: 15-30-201, 15-30-204, 15-30-205, 15-30-206, 15-30-207, 15-30-209, 15-30-2501, 15-30-2504, 15-30-2505, 15-30-2606, 15-30-2507, 15-30-2509, MCA

 

REASONABLE NECESSITY: The department is proposing to amend ARM 42.17.219 to update form titles for consistency.  The amendment to the statutory references in the authority and implementing cites were updated to reflect the changes made by the 2009 legislature in House Bill 24, (Ch. 147, L. 2009), which recodified Title 15, chapter 30, Montana Code Annotated.

 

            42.17.221  DUE DATE AND APPLICATION OF TAXES  (1)  Withholding taxes are due as provided in 15-30-204, 15-30-2504, MCA.

 (2) remains the same.

 (3)  Payments submitted with payment coupons vouchers are applied to the period noted on the coupons payment vouchers.  If an employer pays more than the amount owed for withholding tax on the payment coupons vouchers, the withholding overpayment is applied to other amounts due as provided in (2).  The employer may request that payments be applied to a more recent period.

 

            AUTH: 15-30-305, 15-30-2620, MCA

            IMP: 15-1-216, 15-1-708, 15-30-321, 15-30-2641, MCA

 

REASONABLE NECESSITY:  The department is proposing to amend ARM 42.17.221 to update the tiles of the documents which must be filed with the department.  The amendment to the statutory references in the authority and implementing cites were updated to reflect the changes made by the 2009 legislature in House Bill 24, (Ch. 147, L. 2009), which recodified Title 15, chapter 30, Montana Code Annotated.

 

42.17.222  DEMAND OF PAYMENT OR REPORTS IF EMPLOYER TRANSFERS OR DISCONTINUES BUSINESS  (1)  The department may demand that an employer file a MW3 Montana Annual Withholding Tax Reconciliation Annual Reconciliation Report form MW-3 with applicable federal form W-2s and submit payment within 30 days after ceasing activity.  "Ceasing activity"  includes, but is not limited to:

(a) through (2) remain the same.

 

            AUTH: 15-30-305, 15-30-2620, MCA

            IMP: 15-1-216, 15-30-204, 15-30-2504, MCA

 

REASONABLE NECESSITY:  The department is proposing to amend ARM 42.17.222 to update form references and to further clarify information that the department might require for businesses to file upon the closing or transfer of their business.  The amendment to the statutory references in the authority and implementing cites were updated to reflect the changes made by the 2009 Legislature in House Bill 24, (Ch. 147, L. 2009), which recodified Title 15, chapter 30, Montana Code Annotated.

 

42.17.223  DETERMINING EMPLOYEE STATUS  (1)  It is the intent of the department that any determination of a worker's status as an employee for withholding tax purposes be consistent with the determination of the same person's status under the Department of Labor and Industry or the Workers' Compensation Act, unemployment insurance and the professional employer organization laws.

 

AUTH: 15-30-305, 15-30-2620, MCA

IMP: 15-30-248, 15-30-2523, MCA

 

REASONABLE NECESSITY:  The department is proposing to amend ARM 42.17.223 to make the rule consistent with the language of 15-30-2523, MCA, and to update the statutory references in the authority and implementing cites to reflect the changes made by the 2009 Legislature in House Bill 24, (Ch. 147, L. 2009), which recodified Title 15, chapter 30, Montana Code Annotated.

 

4.  The department proposes to repeal the following rules:

 

            42.17.206  WAGES  which can be found on page 42-1733 of the Administrative Rules of Montana.

 

            AUTH: 15-30-305, MCA

            IMP: 15-30-201, MCA

 

REASONABLE NECESSITY:  The department is proposing to repeal ARM 42.17.206.  This rule was adopted when the department administered the tax section of the unemployment insurance and for withholding purposes wages are defined in 15-31-2501, MCA, and therefore the rule is no longer necessary.

 

42.17.207  RENTAL OF CAPITAL ASSETS - NOT WAGES  which can be found on page 42-1734 of the Administrative Rules of Montana.

 

            AUTH: 15-30-305, MCA

            IMP: 15-30-201, MCA

 

REASONABLE NECESSITY:  The department is proposing to repeal ARM 42.17.207.  See the reasonable necessity for ARM 42.17.206.

 

42.17.208  EMPLOYEE EXPENSES - NOT WAGES  which can be found on page 42-1734 of the Administrative Rules of Montana.

 

AUTH: 15-30-305, MCA

IMP: 15-30-201, MCA

 

REASONABLE NECESSITY:  The department is proposing to repeal ARM 42.17.208.  See the reasonable necessity for ARM 42.17.206.

 

42.17.209  JUROR FEES, INSURANCE PREMIUMS, ANNUITIES, DIRECTOR FEES - NOT WAGES  which can be found on page 42-1735 of the Administrative Rules of Montana.

 

AUTH: 15-30-305, MCA

IMP: 15-30-201, MCA

 

REASONABLE NECESSITY:  The department is proposing to repeal ARM 42.17.209.  See the reasonable necessity for ARM 42.17.206.

 

42.17.210  DETERMINATION OF INDEPENDENT CONTRACTOR which can be found on page 42-1736 of the Administrative Rules of Montana.

 

AUTH: 15-30-305, MCA

IMP: 15-30-201, 15-30-248, 15-30-303, MCA

 

REASONABLE NECESSITY:  The department is proposing to repeal ARM 42.17.210.  See the reasonable necessity for ARM 42.17.206.

 

5.  Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing.  Written data, views, or arguments may also be submitted to: Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-3696; or e-mail canderson@mt.gov and must be received no later than February 19, 2010.

 

6.  Cleo Anderson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing.

 

7.  An electronic copy of this Notice of Public Hearing is available through the department's site on the World Wide Web at www.mt.gov/revenue, under "for your reference"; "DOR administrative rules"; and "upcoming events and proposed rule changes."  The department strives to make the electronic copy of this Notice of Public Hearing conform to the official version of the Notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the Notice and the electronic version of the Notice, only the official printed text will be considered.  In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

 

8.  The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notices regarding particular subject matter or matters.  Notices will be sent by e-mail unless a mailing preference is noted in the request.  Such written request may be mailed or delivered to the person in 5 above or faxed to the office at (406) 444-3696, or may be made by completing a request form at any rules hearing held by the Department of Revenue.

 

9.  The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

 

/s/ Cleo Anderson                             /s/ Dan R. Bucks

CLEO ANDERSON                          DAN R. BUCKS

Rule Reviewer                                   Director of Revenue

 

Certified to Secretary of State January 4, 2020