BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

 

In the matter of the adoption of New Rule I pertaining to the deduction provided under IRC 199A - not allowed for the determination of Montana net income

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NOTICE OF PUBLIC HEARING ON PROPOSED ADOPTION

 

TO: All Concerned Persons

 

1. On July 23, 2018, at 1:30 p.m., the Department of Revenue will hold a public hearing in the 3rd Floor Reception Conference Room of the Sam W. Mitchell Building, located at 125 North Roberts, Helena, Montana, to consider the proposed adoption of the above-stated rule. The hearing room is most readily accessed using the east doors of the building facing Sanders Street.

 

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 no later than 5 p.m. on July 13, 2018, to advise us of the nature of the accommodation you need. Please contact Laurie Logan, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or e-mail [email protected].

 

3. The rule as proposed to be adopted provides as follows:

 

NEW RULE I DEDUCTION PROVIDED UNDER INTERNAL REVENUE CODE SECTION 199A NOT ALLOWED (1) The deduction provided under Internal Revenue Code Section 199A is not allowed for the determination of Montana net income.

 

AUTH: 15-1-201, 15-30-2620, MCA

IMP: 15-30-2131, 15-30-2620, MCA

 

REASON: The department proposes adopting New Rule I to make official the department's determination that the deduction provided under Internal Revenue Code (IRC) Section 199A is not allowed for the computation of Montana personal net income. This new federal provision was implemented as a part of the Tax Cuts and Jobs Act, effective for taxable years beginning after December 31, 2017. The rule is necessary because the deduction was placed under IRC Section 63 as a standalone reduction of federal taxable income, and was not intended to impact states that use federal adjusted gross income as a starting point for calculating state individual income tax. 

4. 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: Laurie Logan, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or e-mail [email protected] and must be received no later than August 6, 2018.

 

5. Laurie Logan, Department of Revenue, Director's Office, has been designated to preside over and conduct this hearing.

 

6. 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 that includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notice regarding a subject matter or matters. Notices will be sent by e-mail unless a different mailing preference is noted in the request. A written request may be mailed or delivered to the person in 4, faxed to the office at (406) 444-3696, or made by completing a request form at any rules hearing held by the Department of Revenue.

 

7. An electronic copy of this notice is available through the Secretary of State's web site at sosmt.gov/arm/register/.

 

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

 

9. Regarding the requirements of 2-4-111, MCA, the department has determined that the adoption of the above-referenced rule will not significantly and directly impact small businesses, as the deduction would not be allowed even without the rule. Documentation of this determination is available upon request from the person in 4.

 

 

/s/ Laurie Logan                              /s/ Gene Walborn

Laurie Logan                                   Gene Walborn

Rule Reviewer                                 Director of Revenue           

 

Certified to the Secretary of State June 12, 2018.