Montana Booster Club Filing Requirements

Forming a Nonprofit Corporation in Montana

A booster club incorporates by filing Articles of Incorporation for a nonprofit corporation with the Secretary of State’s Business Services Division, through the online business filing portal. The filing fee is $20. The articles must include the purpose and dissolution language the IRS requires for 501(c)(3) status (the federal tax exemption for charitable and educational organizations); see How to Incorporate a Booster Club.

Every domestic nonprofit corporationNonprofit corporationA legal entity created by filing articles of incorporation with the state, separate from the parents who run it. It can open a bank account, sign contracts, and apply for 501(c)(3) status.All terms files an annual report with the Secretary of State (MCA 35-2-904). The first report is due between January 1 and April 15 of the year after the year of incorporation, and each later report is due in the same window.

The Secretary of State’s fee schedule lists the nonprofit annual report fee as waived when filed by April 15 and $35 when filed after April 15. Confirm current fee with the agency, since a waiver can be withdrawn. A corporation that stops filing loses good standing; reinstatement costs $10 plus $35 for each year of delinquent reports.

State Tax Exemption

Montana exempts corporations “organized and operated exclusively for religious, charitable, scientific, or educational purposes” from corporate income tax by statute (MCA 15-31-102). The statute does not cite 501(c)(3) and does not require the club to apply for or prove the exemption. A booster club with an IRS determination letter (the letter confirming 501(c)(3) status) fits within it.

The exception is unrelated business income, meaning income from a regularly carried-on business not related to the club’s exempt purpose. If the club owes more than $100 of federal unrelated business income tax, Montana taxes that income too, and the club must send the Department of Revenue a copy of its federal Form 990-T. See Unrelated Business Income Tax for Booster Clubs.

Sales Tax

Montana has no general statewide sales tax. A booster club pays no state sales tax on supplies and collects none on spirit wear, concessions, or other fundraiser sales, so there is no exemption certificate to obtain and no seller’s permit to hold.

A small number of resort communities and resort area districts levy a local resort tax on certain goods and services under MCA Title 7, chapter 6, part 15. A club holding a fundraiser in a resort community should ask the local government whether its sales are covered.

Charitable Solicitation Registration

Montana has no charitable solicitation registrationCharitable solicitation registrationRegistration with a state office, usually the attorney general or secretary of state, before asking the public for donations, typically renewed each year with a financial report. Whether it is required, and the thresholds and fees, vary by state.All terms requirement. A booster club does not register with the Attorney General or the Secretary of State before asking for donations, and files no annual charity report with the state. A club that solicits donors in other states, including through an online donation page, should check those states’ rules; see Online Fundraising for Booster Clubs.

Raffles and Gaming

Raffles are legal in Montana when operated under MCA Title 23, chapter 5, part 4. The state’s live bingo and keno permit (MCA 23-5-407) applies only to bingo and keno, so a booster club needs no license or permit to hold a raffle. The Department of Justice’s Gambling Control Division may adopt rules on recordkeeping and fair selection of winners. Montana defines a nonprofit organization for gambling purposes to include one established to support scholastic or educational activities, which covers a booster club.

The rules in MCA 23-5-413:

1. Prize value. The value of a prize for an individual ticket may not exceed $5,000, but this cap does not apply to nonprofit organizations or public school districts.
2. Own the prizes first. The organization must own all prizes before selling any tickets. A club raffling a donated item should hold title or possession before tickets go on sale.
3. Use of proceeds. A nonprofit’s raffle proceeds may be used only for charitable purposes or to pay for prizes, and may not be used for administrative costs.
4. Online sales and cards. Internet ticket sales are prohibited except for raffles sponsored by nonprofit organizations, and nonprofits may accept credit cards. A 501(c)(3) booster club may sell tickets online.

A 50/50 raffle is a raffle under Montana’s definition. Because the prize in a 50/5050/50 raffleA raffle in which the winner receives half of the ticket sales and the club keeps the other half, usually sold and drawn during one game or event. It is legally a raffle with a cash prize, so state raffle law applies.All terms is half of the ticket money, the “own all prizes first” rule fits awkwardly; the club should confirm its 50/50 procedure with the Gambling Control Division.

Bingo is different: live bingo requires a Gambling Control Division permit. A 501(c)(3) club may qualify as an exempt charitable organization with a reduced fee and a limit of 60 days per year. Cards may cost no more than $1, and regular-session prizes may not exceed $800 per game.

Annual Compliance Calendar for Montana