What Montana expects from a new trade business

Since 2026, it's a state contractor license

Montana's old contractor registration is gone. Since January 1, 2026, the Department of Labor & Industry licenses construction contractors, and you can't engage in business as one without a current license. Offering the work or submitting a bid counts. Active registrations from the end of 2025 were converted. The application asks for proof you comply with workers' comp law, and you pay a fee set by the department. Cities and counties can't add their own contractor license or bond.

The small-job exemption is work of a casual or minor nature under $2,500 a job, labor and materials together. Splitting a bigger job to get under it doesn't count. Licensed electricians and plumbers working within their own license fall outside this chapter, and so do people working for wages as employees.

Hiring a contractor licensed on the date of the contract shields the customer from comp, unemployment and wage liability for that contractor and his crew. That's why GCs and owners will ask for your number.

On home jobs, your contract with the owner has to carry the property address or legal description plus the owner's name and address. Give those to a sub or supplier within 5 business days of asking. A construction attorney can tell you how the new law fits your work.

Source: Montana DLI: Construction Contractor License Program · MCA 37-45-201 (license required) · MCA 37-45-104 (exemptions) · MCA 37-45-202 (limiting liability) · MCA 37-45-102, definitions · MCA 37-45-204, local governments · MCA 71-3-531, notice and contract terms

Who to call: an attorney near you

Working solo? Learn the exemption certificate

In Montana the comp act applies to all employers and all employees. Hire one employee and you carry coverage. Sole proprietors, working partners and working members of a member-managed LLC are outside the act for themselves unless they elect in. Corporate officers and LLC managers owning 10% or more are exempt too.

The Montana twist: if you regularly work somewhere other than your own fixed shop, you apply to the department for an Independent Contractor Exemption Certificate, unless you've elected coverage on yourself. It lasts two years. The fee is set by department rule, so ask for the current amount. Working under it, you've waived your own comp benefits. So you're on your own if you fall.

Hire a sub who hasn't complied and you can owe benefits to his employees. An uninsured employer can also owe a penalty of up to double the premium, or $200, whichever is greater. An insurance agent who writes contractors can compare coverage with the certificate.

Source: MCA 39-71-401 (coverage and exemptions) · MCA 39-71-417 (independent contractor certification) · MCA 39-71-405 (contracting work out) · MCA 39-71-504 (uninsured employer penalty)

Who to call: an insurance agent near you

Getting paid: 20 days, 90 days, 2 years

Montana's construction lien has three clocks:

• Notice of right to claim a lien: send it to the contracting owner by certified mail or deliver it in person within 20 days of first furnishing. Miss that and your lien only reaches work done in the 20 days before you gave notice.
• File a copy with the county clerk and recorder within 5 business days after you give the notice. It lasts 1 year and has to be unexpired when you file the lien.
• Who skips the notice: an original contractor hired directly by the owner, wage earners, and work on jobs partly or wholly commercial, so mixed-use too, or dwellings for five or more families. Lender-funded work (not owner-occupied homes) gets 45 days.
• File the lien with the clerk and recorder within 90 days after your final furnishing or after the owner's notice of completion. The statute reads both ways, so use the earlier date. The lien has to come with your certification that the owner was served.
• Sue within 2 years of filing.

A construction attorney can set up your notice forms once.

Source: MCA 71-3-531 (notice of right to claim lien) · MCA 71-3-535 (filing) · MCA 71-3-562 (limitation on actions)

Who to call: an attorney near you

No general sales tax, one contractor fee to know

Montana has no general sales tax. You don't collect it from customers and you don't pay it on materials bought here. There's no state exemption certificate either, since there's nothing to be exempt from. If you buy or work across a state line, that state's rules can still apply.

What applies instead on public work: a public contractor pays a 1% license fee on gross receipts from public contracts. Worth building into any bid for a city, county or state job.

A CPA who works with contractors can tell you what to set aside and how to handle jobs over the border.

Source: Montana Department of Revenue: Sales Tax Guidance · MCA 15-50-205 (public contractor fee)

Who to call: a CPA or tax pro near you

A January 1 to April 15 report window

You form an LLC with the Montana Secretary of State. Check the Secretary of State's fee page for the current filing and annual report fees, including any waiver or late fee. By statute, annual reports after the first go in between January 1 and April 15. No franchise tax or publication.

Pass-through income lands on your personal return. For 2026, Montana taxes it at 4.7% and 5.65%. For a single filer the first $47,500 is at the lower rate. For 2027 the top rate is 5.4%, and a single filer hits it above $65,000.

An S-corp election is a numbers question for a CPA who works with contractors.

Source: Montana Department of Revenue: HB 337 income tax changes · MCA 15-30-2103 (income tax rates) · MCA 35-8-208, LLC annual report

Who to call: a CPA or tax pro near you