Montana doesn't have a general sales tax but it does have a state electricity tax on commercial users. What I just discovered is that manufacturers and certain processors are exempt from the Montana electrical energy tax under MCA 15-51-102. My client in Bozeman — a small sawmill on NorthWestern Energy — has been paying this tax for the entire time they've been in business. The exemption saves them about $400/month and I filed for a 3-year refund of approximately $14,000.
Montana energy tax exemption — not well known but very valuable
Montana is a great example of why auditors need to look beyond traditional sales tax. States without a general sales tax often have specific utility taxes or energy taxes with their own exemption provisions. Montana's electrical energy tax and its manufacturing exemption are not widely known even among Montana businesses. The same principle applies in other no-sales-tax states like Oregon, New Hampshire, and Delaware — look for state-specific utility taxes and their associated exemptions. Every state has some form of tax on utilities and every one of those taxes has exemption categories.
The Montana DOR processed the refund in about 8 weeks. Client was amazed — they had no idea this tax even existed on their bill, let alone that they were exempt from it. Now checking all my Montana manufacturing clients for the same exemption.