The Roundup -

Rule Adopted For National Guard Tax Exemption


CPA and legislators put needs of volunteer soldiers first.

On December 14, 2015, the Department of Revenue adopted the rule regarding National Guard tax exemption.

James C. Wangerin, CPA (CPA) commented at the hearing that annual training and inactive duty training should be covered the same as any other Title 32 duty. The notice of amendment made the changes requested by CPA.

CPA stated that the Department of Revenue and legislators have worked long and hard to help National Guard by applying the tax law with integrity and fairness to all.

The rule implements Senate Bill 378.

CPA raised the issue, “Is National Guard pay exempt for Montana income tax if the guard member is under Title 32 orders in response to a contingency operation?” In Response 5 regarding four, the Department of Revenue indicated it is likely exempt. A National Guard member represented by an attorney won an appeal on this very issue in ODR 12-143-IT.

At the rule hearing, the CPA frequently referred to Montana Department of Revenue legal opinion IT OP 12-02. The legal opinion states, “A member who supports a military operation is participating in a contingent operation — combat duty is not required. … That call can be a support or a training mission or for training in anticipation of a mission.” The Department of Revenue response 5 states, “Regarding five, National Guard members who provide support or conduct training activities during, leading up to, or following a contingency operation, would not necessarily qualify for the exclusion. The only time they would qualify for an exemption is when a service members orders are issued pursuant to Title 10, U.S.C., or when their specific service is deemed a “homeland defense activity” defined in 10 U.S.C. 901, or a “contingency operation,” as defined in 10 U.S.C. 101, in accordance with 15-30-2117, MCA, and when the person was a member of a unit engaged in a homeland defense activity or contingency operation.”

In Response 1: “The Department agrees that the SCRA (Servicemembers Civil Relief Act) certificate is a good resource to help substantiate a service member’s branch of service and duty status.”

CPA has asked appropriate officials to request a Montana Attorney General opinion in regards to inconsistency between old attorney general opinions, IT OP 12-02, Senate Bill 378, and ARM 42.15.214. Additional requests from readers would make attorney general opinion more likely.

CPA maintains a website at The website provides easy access to documents such as decision in ODR 12-143-IT; Department of Revenue legal opinion IT OP 12-02; e-mail from legislative attorney, notice of hearing on ARM 42.15.214; notice of amendment (including comments and responses) on ARM 42.15.214; and Senate Bill 378.

James C. Wangerin, CPA is a tax preparer in Deer Lodge, Mt. He was the initial contact person for proposed legislation that became Senate Bill 378, which passed unanimously.


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