The Montana Supreme Court held that the Department erred in determining that Exxon Mobil was entitled to only an 80% exclusion for dividends received from domestic corporations excluded from the water’s-edge combined return, and concluded that 100% of the actual dividends it received from such entities are excluded from income. Pursuant to Montana statute, Exxon Mobil excluded certain domestic subsidiaries that have less than 20% domestic payroll and property from the combined return (“80/20 corporations”). Also, under IRC § 243 dividend deduction rules it excluded from the combined return income, 100% of dividends actually received from these entities. The court stated that unlike certain types of deemed distribution income, Montana statute did not address the treatment of dividends actually received from 80/20 corporations and Montana statute does not expressly prohibit the IRC § 243 dividend deduction. The court reasoned that unless the legislature expressly provided otherwise, a corporation is entitled to federal deductions for purposes of computing its Montana tax liability.