The bill revises the taxation framework for nonprofit corporations in Montana, specifically addressing the treatment of litigation costs associated with challenging or supporting government actions. It establishes that payments for litigation costs, including attorney fees, are not considered a charitable purpose under state law and thus constitute unrelated business income, which is subject to taxation. This applies to any nonprofit corporation organized under 26 U.S.C. 501(c)(3) or 26 U.S.C. 527, with certain exceptions for nonprofits involved in actions related to their property, contracts, permits, or critical health care delivery systems.

Additionally, the bill amends existing tax laws to clarify that income associated with litigation costs is deemed unrelated business taxable income. It specifies that any nonprofit corporation incurring such costs must report this income and comply with taxation requirements. The bill includes provisions for immediate effect upon passage and applies to all relevant disbursements made after the effective date, regardless of whether the associated legal proceedings have already commenced.

Statutes affected:
SB0524_1.pdf: 15-30-3404, 15-31-102
SB0524_2.pdf: 15-30-3404, 15-31-102
Amended: 15-30-3404, 15-31-102
Introduced: 15-30-3404, 15-31-102