Montana charges no sales tax and doubles the premium you skipped if you go uninsured

Montana occupies a singular position in U.S. workers' compensation law: it is the only state where virtually all employers with even one employee must carry workers' compensation coverage, with no minimum headcount threshold. This universal mandate — established in the Montana Workers' Compensation Act, M.C.A. § 39-71-401 — applies to commercial cleaning companies the moment they hire their first worker. Combine this with Montana's status as one of five states with no statewide sales tax, and the compliance picture for a Montana BSC is genuinely distinctive from every other state in the country.

Montana Workers' Compensation — The Universal Employer Mandate

M.C.A. § 39-71-401 requires that every employer with any employee under any contract of hire — oral or written, full-time or part-time — elect workers' compensation Plan No. 1 (insurance), Plan No. 2 (approved self-insurance), or Plan No. 3 (state-administered uninsured fund). There is no minimum employee count. The Montana State Fund, 5 South Last Chance Gulch, Helena, MT 59601, (406) 444-6500 / (800) 332-6102, is the state's largest WC carrier. Montana is not a monopolistic-fund state — private carriers also write coverage — but the State Fund is the go-to option for most small and mid-sized cleaning companies. Janitorial workers are rated under NCCI code 9014. Sole proprietors and working partners are exempt from mandatory coverage for themselves but must cover any employees they hire. Penalty for operating without coverage: double the premium that would have been owed, with a minimum of $200.

Independent Contractor Exemption Certificates (ICEC)

Montana has a formal ICEC system. A sole proprietor or working owner who regularly performs services at locations other than their own fixed business location must either carry WC on themselves or obtain an Independent Contractor Exemption Certificate from the Montana Department of Labor & Industry (DLI), Employment Standards Division, P.O. Box 201503, Helena, MT 59620, (406) 444-6543. Without an ICEC, a subcontractor working for a BSC may be treated as the BSC's statutory employee for WC purposes, shifting coverage liability to the hiring cleaning company. ICECs are issued for one year and must be renewed annually. The ICEC application requires evidence of: independent business ownership, own tools and equipment, control over performance, and freedom from direction.

No Montana Sales Tax — Complete Exemption

Montana is one of only five states with no general statewide sales tax (along with Alaska, Delaware, New Hampshire, and Oregon). There is no Montana sales tax on janitorial services, cleaning supplies, or any other business purchase. BSCs do not collect sales tax on client invoices, and cleaning companies pay no sales tax when buying chemicals, mops, or equipment from Montana vendors. Montana does impose a resort tax in communities like Whitefish, Red Lodge, and Big Sky — a local option tax on visitor goods and services — but this does not affect business-to-business cleaning contracts. The complete absence of sales tax administration significantly reduces compliance overhead compared with all other states in this batch.

Montana Department of Labor & Industry — Registration and Licensing

Montana does not have a statewide occupational license for janitorial or cleaning businesses. Businesses register with the Montana Secretary of State, P.O. Box 202801, Helena, MT 59620, (406) 444-2034. LLC formation costs $70 (Articles of Organization, online); corporations pay $70. Annual Reports are required ($15/year). Sole proprietors using a trade name should file a Fictitious Business Name certificate in their home county. The Montana DLI regulates wages, WC compliance, and ICEC issuance. Billings requires a City of Billings Business License ($30–$200 based on gross receipts); Missoula requires a City Business License through the Finance Department, 435 Ryman Street, Missoula, MT 59801.

Montana Unemployment Insurance — DLI UI Division

Montana UI is administered by the Montana DLI Unemployment Insurance Division, P.O. Box 1728, Helena, MT 59624, (406) 444-2545. Employers become liable once they pay $1,000 in wages in any calendar quarter. Montana's taxable wage base is approximately $40,500 per employee — one of the highest in the country. New employer rates in the services sector run approximately 1.0%–2.0%. Experienced employer rates range from 0.0% to 6.12%. Quarterly reports and payments are due on the last day of the month following each quarter. Register through the Montana UI Employer Portal.

Montana Income Tax and Payroll Registration

Montana imposes a graduated individual income tax with a top rate of 6.75% on income over $20,500 (2024), applying to pass-through income from sole proprietors, partners, and LLC members. The corporate income tax is a flat 6.75%. Employers must register for Montana income tax withholding through the Montana Department of Revenue Taxpayer Access Point (TAP). Quarterly withholding deposits are required for companies with annual withholding liability exceeding $6,000. Montana does not have a franchise tax or gross receipts tax, keeping the overall state tax burden straightforward.

OSHA, Chemical Safety, and Government Contract Notes

Montana does not operate a state-plan OSHA program for private employers. Federal OSHA Region VIII (Denver, (720) 264-6550) covers all Montana private-sector workplaces directly. Core requirements — HazCom, PPE, bloodborne pathogens for medical-setting crews — all apply. Montana has not enacted PFAS-specific restrictions on cleaning products as of early 2025, but the Montana Department of Environmental Quality (DEQ) regulates hazardous waste disposal; cleaning companies disposing of spent chemical waste must comply with RCRA rules. Government facility cleaning contracts through the Montana Department of Administration require $1 million per occurrence general liability, proof of Montana WC coverage, and a certificate naming the state as additional insured. Performance bonds are required for state contracts exceeding $25,000 in cleaning service value.

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