Brewery taxes in Montana, explained
Which taxes does a Montana brewery pay, and when are the returns due?
Two taxes, two calendars, one barrel
A Montana brewery pays two taxes on the same beer: a federal excise tax to TTB and a Montana barrel tax to the Department of Revenue. Each runs on its own calendar.
The federal tax follows the calendar year and is paid on removals, meaning beer removed for consumption or sale. The Montana tax follows the state's fiscal year, which begins July 1, and is charged on beer sold directly to retailers and consumers.
Model them together, not separately. The same barrel that carries $3.50 federal can carry $1.30 state, and the two filings land in different months.
$3.50 a barrelThe federal excise tax rate on beer removed by a domestic brewer producing 2,000,000 barrels or less per calendar year is $3.50 per barrel on the first 60,000 barrels. — Alcohol and Tobacco Tax and Trade Bureau, retrieved 2026-09-29
July 1Montana breweries pay taxes on beer sold directly to retailers and consumers, based on the total barrels produced in a year, with the tax year beginning July 1. — Montana Department of Revenue, retrieved 2026-09-29
The federal rate: $3.50, then $16, then $18
The federal rate is reduced for small producers, and the reduction is steep. A brewer producing 2,000,000 barrels or less per calendar year pays $3.50 a barrel on the first 60,000 barrels.
Above 60,000 and up to 2,000,000 barrels, the same brewer pays $16.00 a barrel. The general rate, for beer a brewer did not produce or a brewer whose reduced-rate entitlement is exhausted, is $18.00 a barrel.
A microbrewery will live in the $3.50 band its whole life. The number worth noticing is that the 60,000-barrel federal band and the Montana 60,000-barrel license band end at the same place, for unrelated reasons.
| Production band | Barrels taxed | Rate per barrel |
|---|---|---|
| Brewer producing 2,000,000 barrels or less | First 60,000 | $3.50 |
| Brewer producing 2,000,000 barrels or less | Over 60,000 up to 2,000,000 | $16.00 |
| Beer removed by a brewer who did not produce it | All barrels | $18.00 |
$3.50 / $16.00 / $18.00A domestic brewer producing 2,000,000 barrels or less pays $3.50 a barrel on the first 60,000 barrels and $16.00 from 60,000 up to 2,000,000, with an $18.00 general rate otherwise. — Alcohol and Tobacco Tax and Trade Bureau, retrieved 2026-09-29
The federal return periods, by liability size
How often you file the federal return, TTB Form 5000.24, depends on how much tax you owed last calendar year.
A brewery liable for $1,000 or less, expecting the same, may file annual returns. A brewery liable for $50,000 or less, expecting the same, may file quarterly. Otherwise, beer removed for taxable purposes is filed and paid on a semi-monthly basis, unless prepaid.
The quarterly threshold doubles as the bond test. A brewer in the annual or quarterly return periods, paying on a deferred basis, is generally not required to provide a bond.
$50,000A brewer may file annual federal returns if liable for $1,000 or less in excise taxes in the preceding year, quarterly at $50,000 or less, and semi-monthly otherwise unless prepaid. — Alcohol and Tobacco Tax and Trade Bureau, retrieved 2026-09-29
27 CFR 25.91(e)Under 27 CFR 25.91(e), a brewer paying tax on a deferred basis who is eligible for an annual or quarterly return period is not required to provide a bond. — Code of Federal Regulations via Cornell LII, retrieved 2026-09-29
The Montana barrel tax: a ladder on a fiscal year
Montana taxes beer sold directly to retailers and consumers on a graduated scale, set in Montana Code 16-1-406, and the year runs July 1 to June 30.
The first 5,000 barrels produced in the year carry $1.30 a barrel. The 5,001st through 10,000th carry $2.30. Above 10,000, the rate is $4.30.
The steps follow production, not sales price, and the year is the state's fiscal year, so a summer-heavy production plan can straddle two tax years. A brewer who produced 10,000 barrels or less in the prior year starts the next year back at $1.30.
| Barrels produced in the year | Tax rate per barrel |
|---|---|
| 0 to 5,000 | $1.30 |
| 5,001 to 10,000 | $2.30 |
| 10,001 or more | $4.30 |
$1.30 / $2.30 / $4.30Under 16-1-406, MCA, Montana's barrel tax is $1.30 for 0 to 5,000 barrels, $2.30 for 5,001 to 10,000 and $4.30 above, and a brewer at 10,000 or fewer starts each year at $1.30. — Montana Department of Revenue, retrieved 2026-09-29
Crossing a band: the rate rises a quarter later
The Montana rate does not jump mid-quarter. If the 5,001st barrel is produced in the first quarter, the rate stays $1.30 for that quarter and rises to $2.30 beginning with the second.
The brewery owes a notification with the growth. A brewer must notify the department and its wholesalers in writing by the end of the quarter in which a production increment was exceeded.
Put the notification in the production plan. Crossing a band quietly produces a rate mismatch on the next return, and the wholesalers you sell to are owed the same notice in writing.
When a Montana brewer exceeds a production increment, the rate rises the following quarter, and the brewer must notify the department and its wholesalers in writing by quarter's end. — Montana Department of Revenue, retrieved 2026-09-29
Filing in Montana: TAP, Form BET and Form BSM
All Montana brewery reports are filed through the TransAction Portal, the same TAP system that holds the license. The form depends on where the brewery sits.
In-state breweries file the Beer Wholesalers/Brewers Quarterly Tax Return, Form BET. Out-of-state breweries shipping into Montana file the Monthly Report of Beer Shipments, Form BSM, if they ship to distributors, or Form BET if they ship to retailers, and both if they ship to both.
The reports are due quarterly, on the state's fiscal quarters. A quarter is a reporting period beginning July 1, October 1, January 1 and April 1.
Form BETMontana brewery reports are filed through TAP, with in-state breweries filing Form BET and out-of-state breweries shipping to distributors filing Form BSM. — Montana Department of Revenue, retrieved 2026-09-29
The records behind the returns
Tax returns are only as safe as the records under them. Federal brewery records must be kept at the brewery premises, available for inspection during business hours, and preserved for at least three years from the transaction or the last entry, whichever is later.
Operations reports begin the moment the Brewer's Notice is approved, on TTB Form 5130.26 quarterly or TTB Form 5130.9 monthly, so the recordkeeping habit starts before the first sale.
The practical setup is one production log feeding both returns. The federal return counts removals, the Montana return counts barrels sold direct, and the reconciliation between them is what an audit reads first.
3 yearsFederal brewery records must be preserved for at least three years, and operational reports on TTB Form 5130.26 or TTB Form 5130.9 begin upon approval of the Brewer's Notice. — Alcohol and Tobacco Tax and Trade Bureau, retrieved 2026-09-29
Budgeting the pair, before the first batch
At 1,000 barrels a year, the two taxes total about $4,800: $3,500 federal and $1,300 Montana. Neither is optional, and both scale with volume.
Use the pair as a pricing floor. The taxes are per barrel, roughly 31 gallons, so a barrel sold through the taproom carries both the federal and the state per-barrel cost into every pint.
The full first-year budget, including the $35 filing and the $700 license fees, is itemized on the cost breakdown. The renewal calendar behind it is on the yearly page, and the entity behind the permit is covered on the LLC page.
$500 + $200A new Montana brewery license costs $500 with a $200 original application processing fee, on top of the $3.50 federal and $1.30 Montana per-barrel taxes. — Montana Department of Revenue, retrieved 2026-09-29
Questions
Does a Montana brewery pay federal or state tax on its beer?
Both. The federal excise tax is $3.50 a barrel on the first 60,000 barrels for a brewer producing 2,000,000 barrels or less, and Montana adds a graduated barrel tax on beer sold directly to retailers and consumers, starting at $1.30 a barrel.
When are Montana brewery tax reports due?
Quarterly, through the TransAction Portal, on the state's fiscal quarters beginning July 1, October 1, January 1 and April 1. In-state breweries file Form BET; out-of-state breweries shipping to distributors file Form BSM.
When does the Montana rate rise after crossing a production band?
At the start of the following quarter. If the 5,001st barrel is produced in the first quarter, the $1.30 rate holds for that quarter and $2.30 begins with the second. The brewer must also notify the department and its wholesalers in writing by the end of the quarter.
Can a small brewery skip the federal bond?
Usually yes. A brewer paying tax on a deferred basis, eligible for an annual or quarterly return period under 27 CFR 25.91(e), is not required to provide a bond. A brewery liable for $50,000 or less in federal beer excise tax a year files quarterly and fits.
How often does a large brewery file federal returns?
Unless tax is prepaid, beer removed for taxable purposes must be filed and paid on a semi-monthly basis on TTB Form 5000.24 when the brewery is outside the annual and quarterly return-period thresholds.