Montana does not have a general sales tax. It’s one of five states — along with Alaska, Delaware, New Hampshire, and Oregon — where the price on the shelf is the price you pay at the register for most purchases.1Montana Department of Revenue. Sales Tax Guidance for Montana Business and Residents That doesn’t mean every transaction in Montana is tax-free. The state applies targeted taxes to lodging, rental vehicles, tobacco, alcohol, fuel, and cannabis, and ten tourist communities add a local resort tax to meals, drinks, and overnight stays.
What You Actually Pay Tax On
Groceries, clothing, electronics, household goods, restaurant meals outside resort towns, and services generally carry no tax at the point of sale. Where tax shows up is on a narrow set of categories the legislature has singled out. Some of those taxes get added to your bill as a visible line item; others are built into the retail price before you ever see it. The sections below walk through each one.
Lodging and Rental Cars
If you’re staying overnight anywhere in Montana, two separate state taxes apply to the room. The Lodging Facility Use Tax charges 4% on the price of a hotel, motel, or similar accommodation.2Montana State Legislature. Montana Code 15-65-111 – Tax Rate A separate Accommodations Sales Tax adds another 4% on accommodations and campgrounds, and also on vehicles rented for 30 days or less.3Montana State Legislature. Montana Code 15-68-102 – Imposition and Rate of Sales Tax and Use Tax
Combined, that’s 8% in state tax on most hotel stays and campground nights. Short-term rental car charges carry the 4% accommodations tax statewide. In a resort community, the local resort tax piles on top, which can push the total tax on a hotel room to 11%.
Resort Tax Communities
Ten Montana towns collect a local resort tax, each at a 3% rate, on purchases at lodging facilities, restaurants, bars, and destination recreational facilities like ski resorts.4Montana State Legislature. Montana Code 7-6-1503 – Limit on Resort Tax Rate — Goods and Services Subject to Tax The communities currently collecting it are Big Sky, Cooke City, Craig, Gardiner, Red Lodge, St. Regis, Virginia City, West Yellowstone, Whitefish, and Wolf Creek.5Montana Department of Revenue. Local Resort Tax
If you’re eating out, buying a drink, or booking a room in any of those places, expect 3% added to the bill. State law allows a resort community to tack on an additional 1% dedicated to infrastructure for a maximum of 4%, but none of the current ten have done so.4Montana State Legislature. Montana Code 7-6-1503 – Limit on Resort Tax Rate — Goods and Services Subject to Tax The resort tax doesn’t apply to goods bought for resale, so it hits consumers rather than business purchases.
Cannabis
Cannabis carries the highest consumer tax rate in Montana. Adult-use recreational marijuana is taxed at 20% of the retail price, while medical marijuana is taxed at 4%.6Montana Department of Revenue. Cannabis Tax Counties can add a local-option marijuana excise tax of up to 3% on top of the state rate.7Montana State Legislature. Montana Code 16-12-310 – Limit on Local-Option Marijuana Excise Tax Rate — Goods Subject to Tax In a county that has adopted the full local option, a recreational purchase can carry a combined rate of 23%. Medical cardholders pay a maximum of 7%.
Tobacco, Alcohol, and Fuel
These taxes are collected at the wholesale level and baked into the shelf price, so you won’t see them on your receipt.
Cigarettes are taxed at 8.5 cents each, or $1.70 per standard 20-cigarette pack.8Montana Department of Revenue. Cigarette Taxes Other tobacco products — cigars, pipe tobacco, and smokeless tobacco — are taxed at 50% of the wholesale price.9Centers for Disease Control and Prevention. STATE System Excise Tax Fact Sheet
Beer is taxed on a tiered scale based on the brewer’s production volume: $1.30 per barrel on the first 5,000 barrels, $2.30 per barrel from 5,001 to 10,000, and $4.30 per barrel above 10,000.10Montana Department of Revenue. Alcohol Distributor and Wholesaler Tax Wine is taxed at $0.27 per liter regardless of the seller.
Gasoline carries a Montana fuel tax of $0.33 per gallon and diesel $0.2975 per gallon, rates that have been in effect since July 2022.11Montana Department of Transportation. Motor Fuel Tax Rates Federal fuel taxes stack on top, putting the pump total near $0.514 per gallon for gasoline and $0.5415 per gallon for diesel.
Buying and Registering a Vehicle
There is no sales tax on a car purchase in Montana. You will, however, pay annual registration fees based on the vehicle’s age when you register with the county treasurer. For light vehicles weighing one ton or less:12Montana State Legislature. Montana Code 61-3-321 – Registration Fees of Vehicles and Vessels
- 0–4 years old: $217 per year
- 5–10 years old: $87 per year
- 11 years or older: $28 per year
Vehicles with a manufacturer’s suggested retail price above $150,000 face an additional $825 surcharge if the vehicle is 10 years old or less. Once a light vehicle reaches 11 years, you can switch to permanent registration with a one-time $87.50 fee.
Counties may also impose a local option vehicle tax of up to 0.7% of the vehicle’s assessed value, collected at registration.13Montana State Legislature. Montana Code 61-3-537 – Local Option Vehicle Tax Your total cost at the counter depends on both the age of the vehicle and the county where you register it.
The Montana LLC Vehicle Strategy
Montana’s lack of sales tax has made it a known destination for a strategy in which an out-of-state buyer forms a Montana LLC, buys a vehicle through the LLC, and registers it in Montana to avoid sales tax in their home state. It’s most commonly used for expensive RVs, luxury cars, and exotics, where the savings can run into tens of thousands of dollars.
Forming the LLC itself is legal. Using it primarily to avoid your home state’s tax is increasingly treated as evasion. States including California, Tennessee, Utah, and Massachusetts have gone after residents who register vehicles through Montana LLCs but keep and drive those vehicles in their home state. Enforcement tools include license plate readers, data-sharing agreements, and prosecutions. Penalties can include back taxes, substantial fines (Utah imposes a 100% penalty on top of unpaid taxes), and in some cases criminal charges. If you live outside Montana, most states require you to register a vehicle where it is primarily kept or operated, and the LLC does not change that obligation.
Online Orders Shipped to Montana
Online retailers do not collect Montana sales tax on shipments to a Montana address, because there isn’t one to collect. You won’t see a sales tax line on an order from a major e-commerce platform when the shipping address is in Montana, no matter where the seller is based. This is one of the clearest everyday effects of Montana’s tax structure: the price you see is the price you pay.