Airbnb vacation rentals in Montana are governed by laws and regulations and liable for taxes as imposed by the state, county, and/or city in which they are located.
Known as the Treasure State, Big Sky Country, Land of the Shining Mountains, and The Last Best Place, Montana is home to a plethora of breathtaking tourist destinations. It is home to numerous mountain ranges including the Rockies, seven national forests, national parks, lakes, prairie terrain, and badlands. It also boasts clean and open air, great infrastructure, a variety of events such as parades and festivals, and some of the best and biggest skiing opportunities in the world. In 2019, 12.6 million people visited the state, spending $3.8 billion and contributing $5.4 million to the overall economy. While tourism took a hit in 2020, it was soon recovering in 2021, trading off bleisure and long term stay trends.
As one of the major industries and the fastest-growing industry in the state, tourism has played a significant role in Montana’s recent economic achievements such as recording the eighth-fastest GDP growth over the last five and 10 years and growing an inflation-adjusted 6.7% in 2021 to record the seventh-largest rate of growth in the US. Together with its sheer size, being the fourth-largest state by landmass, and small relative population – it is the seventh least populous and third-least densely populated state – Montana provides good prospects as a growing destination for short term rentals.
Despite an abundance of short term rentals in the counties such as Flathead and Gallatin and high densities of short term rentals in Madison and Park Counties, there aren’t many statewide laws that regulate short term rentals:
Short term rental hosts are required to apply for and obtain a Public Accommodation License annually from the Montana Department of Public Health and Human Services.
The main rules for public accommodations including short term rentals are potable water, adequate wastewater disposal, hygienic amenities such as laundry, and thorough cleaning and maintenance of the property. An inspection is conducted as part of the approval process and then yearly to ensure standards are maintained.
Hosts must also maintain a guest register including name and contact information with information stored for a minimum of one year.
Short term rentals in Montana are also subject to two lodging taxes by the state.
Lodging Facility Use Tax of 4% Lodging Sales Tax of 4%
The taxes are based on the full listing price including any cleaning fees and guest fees, for reservations 29 days or shorter. Airbnb collects and remits both to the Montana Department of Revenue.
Counties and cities are eligible to impose their own laws and regulations on short term rentals though most smaller towns and counties are yet to do so. According to a 2021 University of Montana study, they don’t feel a requirement to do so as they don’t receive a “compelling” number of complaints. In other counties and cities requirements encompass obtaining a business license or a special use permit or both; a fire marshal inspection; zoning regulations and limitations; parking requirements; and providing an emergency phone.
Here are the Airbnb laws, regulations, and taxes applicable at a local level in some of the biggest tourist cities in Montana.
Established during the Montana Gold Rush, Helena is the state capital of Montana and the county seat of Lewis and Clark County. Located halfway between Yellowstone and Glacier National Parks – making it a great place to stay when visiting either or both - Helena is also popular among outdoor enthusiasts. The city boasts world-class fly-fishing, incredible hiking, skiing, boating, and hunting. It is a designated International Mountain Bicycling Association bronze-level Ride Center and the birthplace of disc golf in Montana. Its rich history of gold mining has earned it the title of ‘Best Small Town in America for Geocaching’. Visitors can also take in the Greek neoclassical architecture of the Montana State Capitol building including striking paintings by cowboy artist Charlie Russell and the rich history of the state at the Montana Museum. Travelers also enjoy local microbrews and therapeutic soaks in Broadwater Hot Springs near downtown Helena.
Helena does not currently impose additional short term rental regulations.
Another popular tourist destination in Montana, Bozeman is known as ‘the most livable place’. Nestled amid the Rocky Mountains, this mountain town offers two world-class ski resorts, incredible hiking trails, rock climbing, wildlife watching, and more. It also lays claim to a thriving arts and culture community as well as great food and frequent events to keep any visitor entranced.
The Bozeman City Commission has imposed regulations on new short term rentals since December 2017. Short term rentals must register with the city and obtain a one-time fire inspection and health inspection. Registrations must be renewed annually prior to their lapse. Once registration lapses, hosts will have to begin the process anew.
Bozeman recognizes three types of short term rentals:
Type 1 – Owner present during the rental. These are limited to only two bedrooms in the dwelling; in a two-bedroom dwelling, only one bedroom can be rented.
Type 2 – The rental property is the primary residence, duplex, or ADU but owner is not present during the rental period
Type 3 – The entire home which is not the primary residence of the owner.
Short term rentals are allowed in zones B2, B2M, B3, and UMU. In zones R1 and RS, only Type 1 short term rentals are allowed. In R2 and HMU zones, owners can rent their primary residence if they are not present for up to 6 months each year.
A picture-postcard resort town, Whitefish has greatly benefited from emerging short term rental market trends, emerging as a top destination for Airbnbs. A year-round destination it offers a diversity of adventurous, outdoor activities from mountain biking and hiking to snowboarding and kayaking. It is a Top 10 Ski Town in the World, provides access to Glacier National Park, and is fully Instagram-worthy.
Whitefish only allows short term vacation rentals in some districts. Hosts must register for a permit and business license, set up a Fire Marshal inspection, meet off-street parking standards, provide trash collection services and visibly post an emergency contact. Exterior signage advertising the vacation rental is not allowed.
Hosts are also required to report and remit a 3% Resort Tax to the city.
Brimming with history and adventure, Red Lodge is a quaint mountain town nestled amidst the high peaks of Beartooth Mountains. The gateway to Yellowstone National Park via the scenic Beartooth Highway, it is surrounded by Custer Gallatin National Forest. A year-round destination offering western hospitality, Red Lodge also offers local shopping, delicious dining, and a diversity of nature to please anyone.
The city of Red Lodge allows short term rentals in all zoning districts. Hosts must apply for a Public Accommodation License from the Carbon County Sanitarian, register with the city to obtain a business license that must be renewed each year, and schedule a fire inspection with the Red Lodge Fire Department.
New hosts must also post a bond of $500 to ensure compliance with 4% Resort Tax due every quarter.
An outdoor paradise, Big Sky boasts magnificent mountains, alpine valleys, and meadows. Surrounded by wilderness it lays claim to a pristine environment. Brimming with adventure, it offers whitewater activities, blue-ribbon fishing, stunning hikes, ziplining, skiing, dog sledding, horseback riding, snowmobiling, and so much more. A family-friendly town, its laid-back atmosphere provides for deep rest and relaxation.
The city of Big Sky imposes a Resort Tax of 4% of the total listing price including cleaning fees for reservations 30 nights or shorter which Airbnb collects and remits on behalf of hosts.
The rules that govern Airbnbs and other short term rentals in Montana depend on the individual laws, regulations, and taxes imposed by the state, county, and city where your Airbnb is located. If you are finding it difficult to parse through the different codes applicable, it can be helpful to seek the advice of a lawyer or consultant to ensure you are aware of the up-to-date rules applicable to your Airbnb.