WeVote
Log In

Bill

BM

Bill

HB 665

Preclude non-profit officers from personal liability for unpaid tax withholding

2025 Regular Session Introduced by Bill Mercer

Montana law now shields non-profit officers from personal liability for unpaid employee tax withholding, eliminating a key enforcement mechanism against organizational tax non-compliance.

Chapter Number Assigned
#taxation--individualincome #corporations #liability #taxation
0
WeVote Research Nonpartisan
Bill Summary · HB 665

Legislative bill overview

HB 665 exempts non-profit organization officers from personal liability for unpaid federal and state tax withholding obligations. This means non-profit directors, trustees, and officers cannot be held personally responsible for their organizations' failure to remit employee payroll taxes, a liability that would otherwise apply to responsible persons under existing federal and state law.

Why is this important

Non-profit officers currently face potential personal financial exposure if their organizations fail to pay withheld payroll taxes—a significant risk that can deter qualified individuals from serving on boards. This bill removes that deterrent, potentially making it easier to recruit nonprofit leadership, though it shifts tax collection risk entirely onto government agencies and employees who may not receive withheld wages.

Potential points of contention

  • Tax collection impact: Eliminates a key enforcement mechanism that ensures payroll taxes are remitted, potentially reducing government revenue recovery when non-profits mismanage funds
  • Employee protection concerns: Workers who don't receive withheld taxes still owe those obligations to the IRS, creating a gap where employees bear the burden rather than organizational leadership
  • Moral hazard: Removing personal liability may reduce incentives for careful financial management and board oversight of tax compliance in non-profit organizations

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.