Bill > HB900

This bill establishes a new tax credit for businesses that direct a portion of their payment processing fees to charitable organizations. Specifically, businesses can claim a tax credit equal to the amount of payment processing fees they direct to a qualified charitable organization, subject to certain conditions. The credit can be applied against individual or corporate income tax, and if the credit exceeds the taxpayer's tax liability, the excess can be carried forward for up to two years. To qualify, the payment processor must reimburse the state for the credit amount in the first year it is claimed. The bill defines key terms such as "charitable organization" (using the IRS definition from 26 U.S.C. 170(c)), "payment processing fee" (fees for electronic payment transactions), and "payment processor" (companies facilitating electronic transactions). Importantly, businesses cannot claim this credit for amounts already deducted as charitable contributions, but they can choose between the credit and a deduction. For pass-through entities like partnerships and small business corporations, the credit will be attributed to shareholders, owners, or partners proportionally. The tax credit will be subject to periodic review by the state's revenue interim committee, and it will apply to income tax years beginning after December 31, 2025.

Budget and Finance

https://bills.legmt.gov/#/laws/bill/2/LC4355