Local Resort Tax Information

Resort taxes serve the function of creating 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.


Maximum Tax Rate


The maximum resort tax rate is 3% (7-6-1503, MCA), and at least 5% of the resort tax revenues must offset municipal property taxes (7-6-1507, MCA). Before collecting resort tax revenue, a community (incorporated) or area (unincorporated) must first be designated by the Department of Commerce as a resort community/area (7-6-1501, MCA). Then, a resolution outlining the tax must be approved by the local electorate (7-6-1504, MCA).


How to Designate a Town or Area


Under Montana State Law (7-6-1501, MCA), the Montana Department of Commerce is responsible for designating a town or unincorporated area as a resort community or resort area. The process for making this designation includes certifying the population of the community is less than 5,500 for an incorporated town and less than 2,500 for an unincorporated area based on population figures from the most recent federal census. Also, the Montana Department of Commerce must conclude that the major portion of the community or area’s economic well-being is derived from businesses catering to non-business travelers.


After a Community has been Designated


Once a community has been designated a resort community or area, a ballot initiative is required to implement the tax. The local electorate must decide on the rate, the duration of the tax, the effective date, and how the revenue is to be allocated. Section 7-6-1503, MCA explains,


(a) The resort tax is a tax on the retail value of all goods and services sold, except for goods and services sold for resale, within the resort community or area by the following establishments:

(i) hotels, motels, and other lodging or camping facilities;

(ii) restaurants, fast food stores, and other food service establishments;

(iii) taverns, bars, night clubs, lounges, and other public establishments that serve beer, wine, liquor, or other alcoholic beverages by the drink; and

(iv) destination ski resorts and other destination recreational facilities.

(b) Establishments that sell luxuries shall collect a tax on such luxuries.

Luxuries are defined as any gift or luxury item normally sold to the public or tourists with the exception of: unprepared food, medicine or medical supplies, appliances, hardware supplies and tools, or any necessities of life (7-6-1501, MCA). Existing resort tax resolutions include sporting good rentals, books, magazines, souvenirs, and even antiques as luxuries.


Name Tax Rate Year Enacted


Red Lodge 3% 1998
Virginia City 3% 1991
West Yellowstone 3% 1986
Whitefish 3% 1996

Resort Areas

Big Sky 3% 1992
Cooke City 3% 2006
Craig 3% 2010
Gardiner 3% 2014
St. Regis 3% 1993
Wolf Creek 3% 2015

For more information please visit the Montana Department of Transportation - Resort and Local Option Taxes web page.