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Recycling Tax Incentives

See Title 15 Chapter 32 Part 6 MCA for more information.

Tax Credit for Recycling Equipment

Tax Deduction for Buying Recycled Materials

Tax Deduction for Buying Montana Compost

Permit Fee Credits for Using Glass

Recycling Property Credit (business credit)
An individual, corporation, partnership, or small business corporation may receive a tax credit for investments in depreciable property used primarily to collect or process reclaimable material or to manufacture a product from reclaimed material according to the following schedule:

  • 25% of the cost of the property on the first $250,000 invested;
  • 15% of the cost of the property on the next $250,000 invested; and
  • 5% of the cost of the property on the next $500,000 invested.

The credit may not be claimed for:

  • investments in depreciable property in excess of $1 million
  • an industrial waste generated by the person claiming the tax credit unless:
    - the person generating the waste historically has disposed of the waste onsite or in a licensed landfill; and
    - standard industrial practice has not generally included the reuse of the waste in the manufacturing process.
  • an investment in property used to produce energy from reclaimed material.

Purchase of Recycled Materials Deduction (business deduction)

  • Taxpayers that purchase recycled material as a business-related expense can deduct 10% of the expense of these products from federal adjusted gross income in arriving at Montana adjusted gross income.
  • The purpose of providing a tax deduction for the purchase of recycled materials is to encourage the use of goods made from reclaimed materials, especially post-consumer materials, and to discourage consumption of the same goods made from new materials.
  • The definition of recycled material is determined by the Department of Revenue.

Deduction for Purchase of Montana Produced Organic Fertilizer (personal and business deduction)

  • Taxpayers may deduct expenditures for organic fertilizer, such as compost, that is produced in Montana and used in Montana.
  • The deduction is allowed if the expenditure was not otherwise deducted in computing taxable income.
  • The deduction is in addition to all other deductions from adjusted gross individual income allowed in computing taxable income under Title 15, chapter 30 or from gross corporate income allowed in computing net income under Title 15, chapter 31, part 1.

Credit Against Certain Permitting Fees for Certain Uses of Post-Consumer Glass (business deduction)

A person(s) with beneficial interest in a business may receive a credit against the fees imposed in 75-2-220 (Air Quality) for using post-consumer glass in recycled material if qualified under HB499 Section 3.

  • The credit may be claimed for glass used in recycled material in the calendar year prior to that which the applicant is paying fees under 75-2-220.
  • The amount of the credit is:

    -$7 for each ton of post-consumer glass used as a substitute for nonrecycled materials; with
    -a maximum allowable credit in any calendar year of $1,500 or the total amount of fees due, whichever is less.

The post-consumer glass used in recycled material may not be an industrial waste generated by the person claiming the credit unless:

  • The person generating the waste historically has disposed of the waste onsite or in a licensed landfill; and
  • Standard industrial practice has not generally included the reuse of the waste in the manufacturing process.