Montana Sales Tax Information

by Julie Segraves

Montana has no general sales tax, but it does generate revenue by taxing the sale of some items. According to the Montana Department of Revenue, three taxes are levied on the sale of goods or services in Montana: the lodging facility sales tax, the resort tax and the rental vehicle sales tax. These taxes are structured to target visitors, not residents. The resort tax can't be charged without first going through the Resort Community Designation Process.

Lodging Facility Sales Tax

The lodging facility sales tax, instituted in June 2003, is a tax on accommodations and campgrounds. Anyone who uses overnight facilities -- such as hotels, motels or campgrounds -- will pay the tax. This 3 percent tax is deposited in Montana's general fund and requires that each facility with sales have a seller's permit. This tax is in addition to the 4 percent facility use tax. Sales to and use by the federal government or its agencies are exempt from the tax. Vendors who pay the tax on a timely basis receive a 5 percent vendor allowance up to $1,000.

Resort Community Designation Process

To be able to charge the resort sales tax, Montana communities with populations under 5,500 for incorporated towns and 2,500 for unincorporated towns must gain approval as a resort town designation by the Montana Department of Commerce. This designation is granted to towns with a high number of visitors but a low population. It's designed to assist with maintenance of the local infrastructure used by tourists, without overburdening the townspeople. Once designated, a town must vote to decide the tax rate, duration, the effective date and the revenue allocation.

Resort Tax

The resort tax is a sales tax on the retail value of anything sold within the community by hotels, motels, lodging facilities, campgrounds, restaurants, fast food stores and public establishments that serve beer, wine, liquor or other alcoholic beverages by the drink, destination ski resorts and other recreational establishments, and retail outlets that sell luxuries. It includes food, drinks, goods and services. Locals can also charge sales tax on sporting good rentals, books, magazines and souvenirs. The tax rate in 2010 was between 2 and 3 percent.

Rental Vehicle Sales Tax

Montana imposes a 4 percent tax on rental vehicles, which is added to the cost of your rental car. The car rental company remits the tax to the Montana Department of Revenue. The tax is charged on rental cars, including vans, SUVs and trucks, motorcycles, motor-driven cycles, motorboats, which includes any type of boat propelled by a motor or engine of any kind, quadricycles, off-road vehicles, sailboats or trucks, trailers or semi-trailers that haul personal goods and weigh less than 22,000 pounds. The tax applies when you rent the vehicle for 30 days or more, do not have a hired driver, transport 15 or fewer passengers or rent it related to an insurance or warranty contract. The vendor allowance applies to this tax as well.

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