Understanding Montana Sales and Use Taxes
Montana does not impose any general sales, gross receipts, occupational license, use, or consumption tax based upon the sale or use of tangible personal property within the state. Montana does, however, levy a lodging facility use tax, a sales and use tax on accommodations and campgrounds, and a rental vehicle sales tax.
Montana Imposes Lodging Facility Taxes
There are two taxes imposed on users of an overnight lodging facility (such as a hotel, motel, campground dude ranch, and guest ranch, which are collected by the facility and remitted to the Department of Revenue. These two taxes are a 4 percent lodging facility use tax, and a 3 percent lodging facility sales tax, for a combined 7 percent lodging facility sales and use tax.
The tax applies to charges paid for the use of the facility for lodging, and does not apply to charges for meals, transportation, entertainment or any other similar charge. In addition, the tax does not apply to a hotel, motel or bed and breakfast facility whose average daily accommodation charge for a single person is $22.47 or less, for a facility or unit that is rented by the same user for a period of 30 consecutive days or more, or lodging paid directly by the federal government. A facility that files and pays the lodging facility sales and use tax timely is allowed a 5% vendor allowance against the 3 percent lodging facility sales tax, not to exceed $1,000 per quarter. There is no vendor allowance allowed against the 4 percent lodging facility use tax. In addition, each facility that is required to collect and remit the 3 percent sales tax is required to apply to the Department of Revenue for a seller's permit before they engage in business.
Montana Imposes a Resort Tax
A resort tax is collected in certain Montana communities with populations under 5,500 who meet specific resort qualifications. The resort tax is a local option sales tax on the retail value of goods and services sold by lodging and camping facilities; restaurants and other food service establishments; public establishments that serve alcoholic beverages by the drink; destination recreational facilities; and establishments that sell luxuries. The rate is set locally and cannot exceed 3%. Local government administers the tax.
Montana Taxes Vehicle Rentals
A 4 percent sales tax is imposed on the base rental charge of rental vehicles. Rental vehicles subject to the tax include automobiles, motorcycles, motorboats, sailboats, off-road recreational vehicles, and trucks with a gross weight less than 22,000 pounds. However, farm vehicles, travel trailers, motor homes, airplanes, snowmobiles, golf carts, and sail boards are not subject to the tax. Vendors subject to the tax must apply to the Department of revenue for a seller's permit.