House Bill No. introduced by F. Nave proposes an income tax credit for businesses that direct payment processing fees to charitable organizations. The bill allows taxpayers to claim a credit against either individual or corporate income tax for the amount of payment processing fees directed to a charitable organization, provided that the payment processor reimburses the state for the credit amount in the first year it is claimed. The credit is non-refundable if the taxpayer's tax liability is less than the credit amount, but any excess credit can be carried forward for up to two years. Additionally, the bill specifies that no credit is allowed for amounts already deducted as charitable contributions, although taxpayers can choose to claim the credit instead of a deduction.

The bill also amends Section 15-30-2303 of the Montana Code Annotated to include the new credit for businesses directing payment processing fees to charitable organizations among the tax credits subject to review by the interim committee. The act is set to apply to income tax years beginning after December 31, 2025. The bill includes definitions for "charitable organization," "payment processing fee," and "payment processor," and establishes guidelines for how the credit should be attributed in cases involving small business corporations, pass-through entities, or partnerships.

Statutes affected:
LC Text: 15-30-2303
HB0900_1(1): 15-30-2303
HB0900_1: 15-30-2303