Montana’s breathtaking landscapes—ranging from the towering peaks of Glacier National Park to the sweeping prairies of the eastern plains—draw visitors year-round for outdoor recreation and serene getaways. Increasingly, short-term rentals on platforms like Airbnb and Vrbo have become popular accommodations for these travelers, offering everything from rustic cabins to modern city apartments. While Montana does not maintain a single, overarching regulation for short-term rentals, property owners should be mindful of local ordinances, state tax obligations, and potential permitting. This guide explains what you need to know before listing a short-term rental in the Treasure State.
Montana’s Definition of a Short-Term Rental
Montana does not have a single, statewide definition for short-term rentals. Many local governments classify lodging of fewer than 30 days as transient. Some cities and counties reference terms like “vacation rental” or “tourist home” in their zoning codes or permit processes. If you plan to rent out a property for nightly or weekly stays, confirm the specific definitions in your municipality so you remain compliant with local guidelines.
Starting a Short-Term Rental Business in Montana
Launching a short-term rental in Montana often involves two principal layers of compliance:
State-Level Tax Requirements
- If your hosting platform does not collect and remit Montana’s lodging taxes for you, you must register with the Montana Department of Revenue to file.
- If you form a business entity (e.g., an LLC), register it with the Montana Secretary of State as required by state law.
Local Regulations
- Check county or city ordinances for potential short-term rental permit requirements, occupancy limits, or restrictions on certain neighborhoods.
- Review any homeowner association (HOA) rules, as some developments limit or ban rentals under 30 days.
Because local authorities have flexibility in how they manage vacation rentals, it’s vital to consult official websites or offices for the most current, location-specific guidelines.
Short-Term Rental Licensing Requirement in Montana
Montana does not issue a single short-term rental license at the state level. Instead, municipalities and counties decide whether a special permit, a general business license, or a lodging establishment license is needed. While some parts of the state impose minimal rules beyond tax collection, tourist-oriented regions—especially near national parks or popular recreational areas—may have stricter guidelines, including:
- Fire safety checks and occupancy limits
- Property inspections to ensure compliance with building codes
- Annual or biannual renewals for lodging permits
Ignoring local requirements can lead to fines, canceled permits, or forced closure of the rental property. Remaining proactive by contacting city or county officials helps ensure your operation is above board.
Montana Short-Term Rental Taxes
Short-term rental hosts in Montana generally encounter two main tax obligations:
Lodging Facility Use Tax and Lodging Sales Tax
- Montana applies a 4% Lodging Facility Use Tax on stays under 30 days, plus an additional 4% Lodging Sales Tax in many cases, totaling 8% in lodging-specific taxes.
- If your booking platform does not remit these taxes, you must register and file returns with the Montana Department of Revenue.
Local Resort or Tourism Taxes
- Certain resort communities or tourism districts in Montana may impose additional local taxes. Rates vary by locality, typically between 2% and 4%.
- Maintaining accurate records of nightly rates, extra fees, and occupancy helps in calculating total taxes due.
Filing schedules often depend on revenue volume, so confirm whether you must file monthly, quarterly, or annually to avoid penalties or interest charges.
Vacation Rental Tax Deductions
If you rent out your Montana property for more than 14 days per year, you may qualify for federal tax deductions related to your short-term rental. Typically, you can deduct:
- Mortgage interest and property taxes
- Insurance premiums and utilities
- Maintenance and repairs
- Depreciation of the dwelling and furnishings
- Professional service fees (e.g., legal or accounting)
Be sure to document the proportion of time the property is rented versus personal use and consult IRS guidelines or a professional tax advisor to ensure correct allocation of expenses.
Short-Term Rental Regulations by Major Locations in Montana
Bozeman
As a gateway to Yellowstone National Park and a rapidly growing city, Bozeman has introduced regulations to manage short-term rentals. Owners of non-owner-occupied vacation rentals often must apply for a permit, meet certain safety standards, and pay local lodging taxes in addition to state taxes. Neighborhood concerns around noise and parking can lead to stricter enforcement or updated ordinances, so keeping track of city council developments is wise.
Missoula
Missoula sees steady demand from the University of Montana and visitors exploring nearby wilderness. While the city does not ban short-term rentals outright, it does impose local taxes on transient lodging. Property owners may need a business license if they meet certain income thresholds. Stay vigilant regarding any local proposals for stricter short-term rental caps or zoning rules aimed at preserving residential character.
Whitefish
Popular for its proximity to Whitefish Mountain Resort and Glacier National Park, Whitefish has more defined short-term rental guidelines. Certain neighborhoods allow only owner-occupied rentals or require owners to secure a short-term rental license. Collecting and remitting the local resort tax is mandatory, along with Montana’s lodging taxes. Hosts should also watch for seasonal enforcement efforts focused on noise, parking, or trash management during peak tourism months.
Billings
Billings, Montana’s largest city, currently handles short-term rentals primarily through standard zoning and lodging tax laws. Depending on the location within the city, property owners might face residential zoning rules restricting how often they can rent to guests. Keeping the property up to code (fire safety, building standards) and remitting the 8% lodging taxes remain the main obligations if your platform doesn’t handle them.
Helena
As Montana’s capital, Helena sees modest but steady visitor traffic for government, historical, and recreational activities. Short-term rentals in Helena are generally permissible, provided owners adhere to local noise ordinances, parking rules, and the typical lodging tax obligations. While Helena has not enacted a comprehensive short-term rental ordinance to date, property owners should still verify local business license requirements and remain attuned to potential policy changes.
Takeaway
From the college town energy of Bozeman and Missoula to the gateway communities of Whitefish and beyond, Montana’s broad appeal to outdoor enthusiasts and travelers underpins a robust market for Airbnb and short-term rental hosts. Yet the state’s decentralized regulatory environment means it’s critical to investigate municipal rules on licensing, occupancy, and safety—even as the 8% lodging tax (plus any local resort taxes) forms the core statewide obligation.
As Montana’s tourism sector continues to expand, local governments may revise or introduce new ordinances governing short-term rentals. Staying updated through official channels—and keeping meticulous financial records for tax reporting—will help ensure you deliver a compliant and profitable guest experience in Big Sky Country.
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