Montana Short-Term Rental Tax Overview
Montana imposes state income tax at rates up to 5.9% on net rental income, combined with Lodging Facility Use Tax at 4% on gross rental receipts. 4% state lodging facility use tax (no general sales tax in Montana). The total tax burden for Airbnb hosts in Montana varies by location, ranging from approximately 7% in Bozeman to 4% in Helena. Understanding the layered structure of federal, state, and local taxes is essential for compliance and accurate pricing.
This guide covers the 2026 tax year. Tax rates and rules change frequently — always verify current rates with the Montana Department of Revenue and consult a qualified tax professional for advice specific to your situation. Federal tax obligations (Schedule E, Form 1099-K, the 14-day rule) apply in addition to all state and local taxes described below. See IRS Publication 527 for federal rental income rules.
Income Tax on Rental Income
Rate: 5.9%
Graduated rates 1%-5.9%
- Net STR income (after expenses) reported on the Montana state income tax return
- Federal Schedule E (or Schedule C if substantial services provided) is required regardless of state tax
- The 14-day rule: if you rent your primary residence 14 days or fewer per year, federal rental income is tax-free (IRS Publication 527)
- Self-employment tax may apply if you provide hotel-like services (daily cleaning, meals, concierge)
Lodging Facility Use Tax
Rate: 4%
4% state lodging facility use tax (no general sales tax in Montana)
What Airbnb Collects Automatically
- State lodging facility use tax (4%)
What Hosts Must Collect and Remit
- Resort community taxes where applicable
Local Tax Rates by City in Montana
Combined estimated occupancy/lodging tax rates including state + local components (income tax not included):
| City / Area | Local Tax Rate | Combined Rate | Registration Required? |
|---|---|---|---|
| Bozeman | 3% resort tax | 7% | Yes |
| Big Sky | 4% resort tax | 8% | Yes |
| Whitefish | 3% resort tax | 7% | Yes |
| Missoula | 0% local | 4% | No |
| Helena | 0% local | 4% | No |
Deductions for Montana Airbnb Hosts
Montana generally conforms to federal tax rules for rental income deductions under IRC Section 162 and Section 167. Standard deductible expenses include: depreciation of the rental property over 27.5 years using MACRS (IRS Publication 946), mortgage interest proportional to rental use, property taxes, insurance premiums, cleaning and maintenance costs, guest supplies, utilities, Airbnb service fees, professional photography, and travel to the property for maintenance. Check the Montana Department of Revenue website for any state-specific adjustments to federal depreciation rules, as some states do not conform to bonus depreciation. At the 5.9% top rate, maximizing legitimate deductions is important for reducing your Montana state tax liability.
Common Deductible Expenses
- Depreciation — Building cost over 27.5 years (IRS Publication 946); often the largest single deduction
- Mortgage interest — Deductible in proportion to rental use percentage
- Property taxes — Proportional to rental use days vs. personal use days
- Insurance — STR-specific or landlord insurance premiums
- Cleaning and maintenance — All turnover cleaning fees, repairs, and upkeep
- Supplies — Linens, toiletries, coffee, kitchen supplies for guests
- Platform fees — Airbnb host service fees (typically 3%) are fully deductible
- Utilities — Electricity, internet, water, gas proportional to rental use
- Professional fees — CPA, tax preparer, attorney fees related to the rental business
Filing Requirements and Deadlines
Registration
Required: Tax Registration / Business License
Cost: Varies by jurisdiction
Register at: Montana Department of Revenue
Filing Schedule
Monthly or quarterly for lodging/sales tax; annually for income tax
Key Resources
Common Montana Tax Mistakes for Airbnb Hosts
Mistake #1
Not separating state-level and local-level tax obligations — Montana imposes state lodging facility use tax but cities/counties often have additional taxes that require separate registration and filing.
Mistake #2
Forgetting to register for tax collection even when Airbnb collects some taxes — most states require hosts to have their own tax registration regardless of whether Airbnb collects on their behalf.
Mistake #3
Not claiming all eligible deductions on the Montana state return — rental expenses including depreciation, mortgage interest (proportional), cleaning, and supplies can significantly reduce your 5.9% state tax liability.
Montana Short-Term Rental Regulations Beyond Tax
Montana does not have comprehensive statewide short-term rental legislation. Regulations are primarily set at the city and county level, with tourist-heavy areas generally having more specific STR ordinances. Hosts should check with their local municipality for zoning compliance, business licensing requirements, safety inspection mandates, and any occupancy or night-cap limits. Some Montana cities have begun requiring STR-specific permits and registration in response to housing affordability concerns. Always verify current local requirements before listing.
Calculate Your Montana Airbnb Tax
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Frequently Asked Questions
Does Montana tax Airbnb income?
Montana imposes state income tax at rates up to 5.9% on net rental income. Additionally, Montana imposes Lodging Facility Use Tax at a combined rate of approximately 4%. Local taxes may add more depending on your city or county. All net rental income must also be reported on your federal tax return (Schedule E). See the Montana Department of Revenue and IRS Publication 527 for details.
Does Airbnb collect Montana taxes?
Airbnb collects State lodging facility use tax (4%) in Montana. However, resort community taxes where applicable may still be the host's responsibility. Always verify your specific jurisdiction on Airbnb's "Occupancy Tax Collection" page and with the Montana Department of Revenue.
Do I need a permit to Airbnb in Montana?
Requirements vary by locality. At minimum, you typically need to register with the Montana Department of Revenue for tax collection purposes. Many cities and counties require additional business licenses, STR permits, or zoning approvals. Tourist-heavy areas tend to have stricter requirements. Check with your local municipality before listing.
What can Montana Airbnb hosts deduct?
Montana follows federal rules for most rental deductions. Standard deductible expenses include: depreciation (27.5 years MACRS), mortgage interest (proportional to rental use), property taxes, insurance, cleaning, supplies, utilities, Airbnb fees, and professional services. See IRS Publication 527 for the complete list.
When are Montana tax returns due?
State income tax returns are typically due April 15. Lodging Facility Use Tax returns are usually due monthly or quarterly depending on your tax liability. File through the Montana Department of Revenue online portal at https://mtrevenue.gov/. Federal income tax returns (including Schedule E for rental income) are due April 15 annually.