Montana Alcohol Tax Rates and Filing Requirements

In Montana, the sale of alcoholic beverages is subject to state-imposed excise taxes, which differ from a general sales tax. The revenue is administered by the Montana Department of Revenue and contributes to the state’s general fund and other programs. For businesses in the alcohol industry, compliance requires understanding the specific tax rates, who is responsible for payment, and the procedures for filing.

Montana Alcohol Excise Tax Rates

Excise tax rates in Montana are specific to the beverage type and, in some cases, the alcohol content. For beer, the tax is levied on a graduated basis according to the brewer’s annual production. The rates are:

• $1.30 per barrel for the first 5,000 barrels
• $2.30 per barrel for 5,001 to 10,000 barrels
• $4.30 per barrel for any production exceeding 10,000 barrels

Wine taxation is based on alcohol by volume. Table wine with an alcohol content of 16% or less is taxed at a rate of 27 cents per liter. Hard cider has a distinct tax rate of 3.7 cents per liter.

Distilled spirits are subject to both an excise tax and a license tax, calculated as a percentage of the retail selling price based on the manufacturer’s nationwide production. The excise tax rates are:

• 3% for producers of less than 20,000 proof gallons
• 8% for producers of 20,000 to 50,000 proof gallons
• 13.8% for producers of 50,001 to 200,000 proof gallons
• 16% for producers exceeding 200,000 proof gallons

A separate license tax also applies to distilled spirits. The license tax rates are:

• 2% for producers of 50,000 or fewer proof gallons
• 8.6% for producers of 50,001 to 200,000 proof gallons
• 10% for those producing over 200,000 proof gallons

Identifying the Taxpayer

The responsibility for remitting alcohol excise taxes rests with the initial distributors in Montana’s supply chain, not the final consumer. The tax is levied at the wholesale level, so the retail price paid by a consumer already includes it. The specific entity responsible for payment varies by beverage type.

For beer, the licensed brewer or beer wholesaler who first sells the product within the state is the designated taxpayer. These businesses are responsible for calculating the tax based on the volume of beer sold and remitting the appropriate amount to the Department of Revenue.

For wine, the licensed winery or wine distributor is accountable for the tax and must pay the per-liter tax based on the category of wine sold. For distilled spirits, the tax is collected by the state at the time of sale and delivery.

Required Tax Forms and Information

The Montana Department of Revenue requires specific forms for each beverage type to report and calculate tax liability. Taxpayers can find these forms on the Alcoholic Beverage Control Division section of the department’s website.

To complete these forms, taxpayers must compile records of total inventory, including beginning and ending balances for the reporting period. They also need precise figures for the total gallons or barrels of alcohol manufactured, imported, or sold within Montana. This information is used to perform an inventory reconciliation on the tax form to verify the reported quantities.

The forms guide the taxpayer through the calculation process, with lines for entering sales volumes and applying the statutory tax rates. Having detailed sales and inventory records is necessary to complete these returns correctly and avoid potential penalties.

Filing and Payment Procedures

The filing frequency for alcohol excise taxes varies. Beer wholesalers file on a monthly basis, while brewers file quarterly. For wine, most distributors and larger wineries file quarterly, though very small wineries may be permitted to file annually. The deadline for all returns and payments is the 15th day of the month following the end of the reporting period.

Beer and wine tax returns must be filed electronically. Taxpayers are required to submit their returns and payments through the state’s online portal, the Montana TransAction Portal.