Get Compliant: MONTANA STR RULES
Are you thinking about listing your property as a short-term rental (STR) in Montana? Whether you want to share the beauty of Big Sky Country or offer a cozy stay near Yellowstone National Park, it’s crucial to understand the legal ramifications and tax requirements. This guide will help you set yourself up for success as a compliant and responsible host.
If your property is available for short stays (defined as 30 days or fewer), it’s classified as a short-term rental and is subject to specific licensing and tax requirements. To get started and operate legally, you’ll need the following 4 items:
Public Accommodation License: This license is required for STRs that provide temporary lodging to guests. You can apply for this through the Montana Department of Public Health and Human Services (DPHHS) website. The process from application to license typically takes several weeks.
Application Form: The 'PUBLIC SLEEPING ACCOMMODATION PLAN REVIEW’ form is available on the DPHHS website and requires details about your property, such as its location, guest capacity, and amenities.
Elements of the application include a floor site plan, water supply, wastewater system, solid waste storage and removal, cleaning and maintenance details, laundry facility and process, and food service (if applicable),
Health and Safety Inspection: Once your application has been submitted, an on-site preoperational health inspection must be scheduled via email.
The Sanitarian will check that the property has been built/renovated according to the approved plans.
They will also assess how well the owner, host, or manager plans to manage potential public health hazards during daily operations.
Fee: Upon completing a satisfactory pre-operational inspection, the Sanitarian will collect the applicable license fee for your property.
This fee is $40 for most single-family vacation homes (1-10 rooms), though fees vary based on property size and the number of rental units.
If the inspection occurs after October 1st, two years of license fees will be collected at one time.
Only checks are accepted, and they must be made payable to MDPHHS.
Annual Renewal: Your Public Accommodation License must be renewed annually before it expires on December 31st of each year.
Starting on the 1st of the year, a late fee of $25 will be assessed and added to the annual renewal fee.
Non-Compliance: Failure to obtain a valid license or comply with other short-term rental regulations can result in fines and penalties.
The DPHHS has the authority to issue fines of up to $500 per violation and may revoke or suspend licenses for non-compliance.
Taxes: Short-term rentals in Montana are subject to 2 lodging taxes. These taxes are based on the full listing price, including cleaning and guest fees.
State Lodging Taxes:
Lodging Facility Use Tax (4%): This state tax supports Montana’s tourism infrastructure.
Lodging Sales Tax (4%): This state tax contributes to the Montana’s general fund.
Who Pays: If you’re using Airbnb, both taxes are automatically collected and remitted for you to the Montana Department of Revenue (yay!). If you use VRBO, Google Vacation Rentals, or other booking platforms, you must register for a TransAction Portal (TAP) account to handle these payments. Reports and payments are due quarterly (April 30, July 31, October 31, and January 31).
Additional Taxes:
Resort Tax: Some popular tourist destinations in Montana impose an additional Resort Tax. Locations like Big Sky add a 4% resort tax on rentals for 30 nights or fewer. This tax helps fund local services in high-tourism areas.
Local Taxes: Certain municipalities might also have additional taxes or fees that vary by location.
Guest Register: Hosts must maintain a guest register including name and contact information. This information must be accessible on request from DPHHS for a minimum of one year.
This information is required for communicable disease investigations and other public health reasons.
Local Permits or Zoning Approval: Check with your city and/or county for required local permits or zoning laws that may apply, as each jurisdiction may have specific requirements.
As short-term rentals continue to gain popularity in Montana, city and county regulations will evolve to balance the interests of hosts, guests, and local communities. Stay informed and enjoy welcoming guests to beautiful Big Sky Country!
WE CAN HELP!
If you are ready to purchase a vacation rental or convert an existing property to a STR in either Gallatin County or Park County, please reach out to our team at COHO Collective.
Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute tax or legal advice. Every short-term rental situation is unique, and tax laws can vary based on your location and specific circumstances. We strongly recommend consulting a qualified tax professional or legal advisor who can provide guidance tailored to your individual needs. This blog should not be used as a substitute for professional advice, and we are not responsible for any actions taken based on this information.
