Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified Montana tax professional before filing.
Montana · USA · Short-term rental taxes
Short-Term Rental Taxes in Montana
Short term rental taxes in Montana: an 8% state lodging tax on stays under 30 days, resort taxes in towns like Whitefish and Big Sky, and 4.7%–5.65% income tax on your rental profit.
The 30-Second Answer
- Short term rental tax in Montana is mainly an 8% lodging tax: the 4% lodging facility use tax plus the 4% lodging facility sales tax, charged on vacation rentals let for under 30 continuous days. Montana has no general sales tax.
- Resort towns add their own tax. Whitefish charges a 3% resort tax on lodging, filed with the city by the 20th of the following month, and Airbnb collects a 4% Big Sky resort tax on Big Sky stays.
- Register before you rent. Hosts need a Montana DOR seller's permit for the lodging taxes, and whole-home rentals must be licensed as a tourist home. Under Senate Bill 52, short-term rental marketplaces must collect and pay the lodging taxes on bookings they facilitate.
- Income tax runs 4.7%–5.65% for 2026 (5.65% above $47,500 single or $95,000 joint), due April 15, 2027. Short-term rentals do not qualify for Montana's reduced homestead/long-term-rental property-tax rates.
Deductions
What Montana STR Hosts Can Deduct
Montana's income tax starts from your federal numbers, so rental expenses you deduct on your federal return also reduce the 4.7%–5.65% state tax.
The 8% lodging tax and any resort tax you collect belong to the state or town, not to you. Keep them out of rental income, or record them as income and deduct the same amount when remitted. Allocate costs between rental and personal days under IRC §280A if you use the property yourself.
Filing Calendar
Key Dates & Filing Calendar
Montana lodging tax is filed quarterly with the Department of Revenue. Resort taxes follow each town's own calendar, and income tax follows the federal April deadline.
Converting a short-term rental to a long-term rental (tenants for 28+ days at a time, 7+ months a year) can qualify for Montana's reduced property-tax rate. Applications for tax year 2027 run from May 4, 2026 to March 1, 2027.
Montana Department of Revenue — Lodging Facility Sales and Use Tax; City of Whitefish — Resort Tax; Montana DOR — Homesteads and Long-term Rentals
Federal & Montana Income Tax Treatment
Passive Rental vs. Active Business: Which Applies to Your Montana STR?
The federal Schedule E or Schedule C choice decides what flows into your Montana return, which taxes it at 4.7% and then 5.65% above the 2026 threshold.
Passive Rental — Schedule E
The standard route for cabins and condos
- Report rents and expenses on Schedule E; the net result flows into your Montana return.
- No self-employment tax on net rental income.
- Passive-loss limits apply; the $25,000 allowance phases out between $100,000 and $150,000 of modified AGI.
- Depreciate the building over 27.5 years; furnishings bought after January 19, 2025 can take permanent 100% bonus depreciation.
No ceiling; Montana's 2026 top rate is 5.65%
Active Business — Schedule C
For guest-ranch style operations
- Applies when the average stay is 7 days or less and you provide substantial services (daily housekeeping, meals, guiding).
- Net profit owes 15.3% self-employment tax; the Social Security part stops at the $184,500 2026 wage base.
- Losses may offset other income if you materially participate.
- May qualify for the federal §199A QBI deduction; Montana still taxes the income at up to 5.65%.
No ceiling; SE tax applies on top of federal and Montana income tax
Depreciation
Depreciation for Montana STR Properties
Depreciation is claimed federally and carries into your Montana return, lowering both income taxes each year you rent.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential rental building | 27.5 years (straight-line) | Land is not depreciable. Acreage around a cabin can be a large share of the price. |
| Furniture, appliances & hot tubs | 5 years (MACRS) | Items acquired after January 19, 2025 qualify for permanent 100% bonus depreciation. |
| Driveways, fencing & outdoor decks | 15 years (MACRS) for land improvements | Outdoor improvements separate from the building itself. |
| Well, septic & structural upgrades | 27.5 years or 15 years, by type | Improvements to the building follow its 27.5-year life. Some site systems may be land improvements; confirm with your preparer. |
Cost segregation can move components into 5- and 15-year classes for faster deductions. Get professional advice before commissioning a study.
On sale, depreciation claimed is recaptured federally at up to 25%. Montana keeps separate, lower rates for long-term capital gains (3.0% and 4.1%), but recaptured depreciation is ordinary income.
Lodging & Resort Taxes
Montana Lodging Taxes on Vacation Rentals
Montana has no statewide sales tax. The lodging tax on a vacation rental is the 8% state lodging facility tax, plus a resort tax in the towns that levy one.
The Montana Department of Revenue administers the two 4% lodging taxes. Resort taxes are local and filed with the town or resort district that levies them.
8% statewide, plus local resort tax where levied (e.g. 11% in Whitefish)
Montana Department of Revenue — Lodging Facility Sales and Use Tax; City of Whitefish — Resort Tax; Airbnb Help Center article 2314
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Airbnb booking | Airbnb collects the 4% lodging facility use tax and 4% lodging sales tax statewide, plus the 4% Big Sky resort tax | Keep Airbnb's tax reports. Whitefish resort tax is not on Airbnb's Montana list, so file it with the city yourself |
| Vrbo / Booking.com booking | Montana law (SB 52) requires short-term rental marketplaces to register and collect the lodging taxes on sales they facilitate | Check each booking breakdown to confirm the 8% was collected. Resort taxes may still be yours to file |
| Direct booking | You collect 8% from the guest and file the quarterly return with the Montana DOR under your seller's permit | Get the seller's permit before your first direct stay and keep lodging tax separate from rent |
The state lodging taxes cover vacation rentals of a home, apartment, room or timeshare. Units rented to the same guest for 30 continuous days or more are exempt. Other resort communities set their own resort tax, so check with your town before your first booking.
Platforms
Airbnb Tax in Montana: What the Platforms Collect
Montana requires short-term rental marketplaces to collect the 8% state lodging tax. Local resort taxes are where gaps appear, and IRS reporting follows federal thresholds.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Form 1099-K above $20,000 and 200 transactions; 1099-MISC for other payments of $2,000+ | Yes — 4% lodging facility use tax, 4% lodging sales tax, and 4% Big Sky resort tax (Big Sky only) | Earnings and tax reports in the host dashboard |
| Vrbo | Form 1099-K at the same federal thresholds | Required by Montana SB 52 to collect the state lodging taxes as a short-term rental marketplace — confirm on each booking | Annual payout summary in the owner dashboard |
| Booking.com | Varies by payment model | Same SB 52 duty where it facilitates the sale. Confirm the tax on your statements, especially if the guest pays you directly | Invoices and payout statements in the extranet |
| Direct bookings | No third-party reporting; you report all income | No — you collect and remit the 8% to the DOR and any resort tax to your town | Your own ledger |
Using More Than One Platform?
Each platform remits only on its own bookings. Your quarterly DOR return, any resort tax return and your income tax return all need your full picture, so track Airbnb, Vrbo, Booking.com and direct stays in one ledger.
US Reporting — 1099-K, Not DAC7
DAC7 is an EU directive and does not apply to Montana rentals. US platforms report host payouts on Form 1099-K once gross payments exceed $20,000 and 200 transactions in the year. All rental income is taxable whether or not a form arrives.
Airbnb Help Center — Occupancy tax collection and remittance by Airbnb in Montana (airbnb.com/help/article/2314); Montana DOR — SB 52; IRS — Form 1099-K
Illustrative P&L: A Montana Mountain Cabin
Example: a cabin earning $52,000 in rents (excluding lodging and resort taxes paid by guests). For illustration only — not tax advice.
Record-Keeping
Stay Audit-Ready: What to Keep and How Long
Montana hosts can be asked for records by the IRS, the Department of Revenue (income and lodging tax) and any resort-tax town.
| Keep | How long | Why |
|---|---|---|
| Booking records (dates, nights, guest, rate, channel) | At least 3 years after filing | Shows which stays were under 30 continuous days (taxable) and supports rental vs. personal days |
| Platform tax statements showing lodging tax collected | At least 3 years after filing | Proves the 8% was remitted by the marketplace, not owed again by you |
| Quarterly DOR lodging returns and resort-tax transmittals | At least 3 years after filing | Evidence of what you reported on direct bookings |
| Expense receipts and invoices | 3 years from filing (6 if income is understated by more than 25%) | Supports deductions that flow from your federal return to Montana |
| Purchase documents, improvements and depreciation schedule | Until 3 years after you sell | Needed for basis, gain and depreciation recapture |
Keep your tourist home licence and seller's permit numbers with your tax files. They are the first things a county sanitarian or the DOR will ask for.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
This page is for education only and is not tax or legal advice. Confirm current rates and requirements with the Montana Department of Revenue, your town and a qualified tax professional before filing.
- Montana Department of Revenue — Lodging Facility Sales and Use Tax — 4% use + 4% sales = 8%; vacation rentals covered; 30-day exemption; seller's permit; quarterly due dates; SB 52 marketplaces. https://revenue.mt.gov/taxes/miscellaneous/lodging-facility
- Montana Department of Revenue — HB 337 income tax changes — 2026 brackets 4.7% / 5.65%; 2027 4.7% / 5.4%; capital gains 3.0% / 4.1%. https://revenue.mt.gov/news/recent-news/HB-337
- Montana Department of Revenue — Homesteads and Long-term Rentals — Short-term rentals do not qualify for reduced rates; 2027 application window; 2026 rate tiers. https://revenue.mt.gov/property/property-tax-changes/homesteads-and-long-term-rentals
- City of Whitefish — Resort Tax — 3% resort tax on lodging; transmittal due the 20th of the following month. https://www.cityofwhitefish.gov/336/Resort-Tax
- Missoula Public Health — Public Accommodations — Short-term rentals rented in their entirety must be licensed as tourist homes. https://www.missoulapublichealth.org/inspections-permits/public-accommodations
- Airbnb Help Center — Occupancy tax collection and remittance by Airbnb in Montana — 4% use tax, 4% lodging sales tax, 4% Big Sky resort tax. https://www.airbnb.com/help/article/2314
- IRS — Understanding your Form 1099-K — Federal third-party reporting for payment platforms. https://www.irs.gov/businesses/understanding-your-form-1099-k
Questions
Frequently Asked Questions — Montana STR Taxes
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