Resort taxes create a funding source for some communities and resort areas to finance a variety of services.
They are collected in certain Montana communities and areas that meet specific population and economic conditions.
The fundamental idea behind resort taxes is to allow places with high numbers of visitors, but relatively few residents, to manage the wear-and-tear on local infrastructure without overburdening local citizens.
The resort tax is a sales tax that applies to:
- Hotels, motels, and other lodging or camping facilities;
- Restaurants, fast food stores, and other food service establishments;
- Taverns, bars, night clubs, lounges, or other public establishments that serve alcohol; and
- Destination ski resorts or other destination recreational facilities
The resort tax also applies to luxuries sold in the resort area.
Taxes and Fees
The maximum resort tax rate is 3% (7-6-1503, MCA).
At least 5% of the resort tax revenue must offset municipal property taxes (7-6-1507, MCA).
Before collecting resort tax revenue, the Montana Department of Commerce must first designate a community (incorporated) or area (unincorporated) as a resort community or area (7-6-1501, MCA).
The local electorate must approve the tax (17-6-1504, MCA).
Before declaring a resort area, the Montana Department of Commerce certifies:
- The population is below:
- 5,500 for an incorporated town, or
- 2,500 for an unincorporated area
- The major portion of an area’s economy is based on tourism
Once the Montana Department of Commerce says an area qualifies as a resort, the local voters must decide on the tax rate, duration, effective date and allocation on a ballot initiative.
Current Resort Areas and Tax Rates
|Resort Name||Tax Rate||Year Enacted|