Montana does not have a general sales tax. It’s one of five states, alongside Alaska, Delaware, New Hampshire, and Oregon, where the sticker price is what you pay at the register for most goods and services.1Montana Department of Revenue. Sales Tax Guidance for Montana Business and Residents That doesn’t make Montana tax-free at checkout, though. The state and certain local governments layer targeted taxes onto lodging, rental cars, cannabis, tobacco, fuel, alcohol, and, in ten tourist towns, restaurant and hotel bills.
The state constitution also caps any future general sales or use tax at 4%, a limit voters wrote in through Constitutional Amendment No. 27 in 1994.2Montana State Legislature. Constitutional Sales Tax Provisions The legislature could theoretically pass one at or below that rate, but none has ever cleared.
Resort Taxes in Tourist Towns
The most common place a visitor gets caught off guard is in a resort community. Montana law lets qualifying tourist towns charge up to 3% on retail sales at lodging, restaurants, bars, and destination recreational facilities like ski areas, with an optional additional 1% dedicated to infrastructure.3Montana State Legislature. Montana Code 7-6-1503 – Limit on Resort Tax Rate — Goods and Services Subject to Tax Local voters have to approve it first.
Ten Montana communities currently collect a resort tax, all at the 3% base rate: Big Sky, Cooke City, Craig, Gardiner, Red Lodge, St. Regis, Virginia City, West Yellowstone, Whitefish, and Wolf Creek.4Montana Department of Revenue. Local Resort Tax If you’re eating out, ordering a drink, or checking into a hotel in any of these places, expect the 3% added to your bill. The tax skips goods sold for resale, so it lands on consumers rather than on business-to-business transactions.3Montana State Legislature. Montana Code 7-6-1503 – Limit on Resort Tax Rate — Goods and Services Subject to Tax
Lodging and Rental Car Taxes Statewide
Even outside those ten towns, overnight stays and short-term car rentals carry state-level taxes. Two separate statutes each add 4% to accommodations. The Lodging Facility Use Tax puts 4% on the price of any hotel, motel, or similar stay.5Montana State Legislature. Montana Code 15-65-111 – Tax Rate The Accommodations Sales Tax adds another 4% on lodging, campgrounds, and the base charge for vehicles rented for 30 days or less.6Montana State Legislature. Montana Code 15-68-102 – Imposition and Rate of Sales Tax and Use Tax
Combined, that’s 8% on most hotel and campground stays statewide. In a resort community, the local 3% stacks on top, and a hotel bill can carry 11% in tax. Rental cars pick up the 4% accommodations sales tax anywhere in Montana.
Excise Taxes on Tobacco, Alcohol, and Fuel
Montana taxes several regulated products at the wholesale level, so the cost is baked into the shelf price rather than added at checkout. You won’t usually see these as line items.
Tobacco
Cigarettes carry a state tax of 8.5 cents each, or $1.70 for a 20-cigarette pack.7Montana Department of Revenue. Cigarette Taxes Cigars, pipe tobacco, and smokeless tobacco are taxed at 50% of the wholesale price.8Centers for Disease Control and Prevention. STATE System Excise Tax Fact Sheet
Alcohol
Beer is taxed on a sliding scale tied to the brewer’s annual production: $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 that. Wine is taxed at $0.27 per liter.9Montana Department of Revenue. Alcohol Distributor and Wholesaler Tax Wholesalers pay these taxes and pass them through in retail prices.
Motor Fuel
Since July 2022, Montana’s state fuel tax has been $0.33 per gallon for gasoline and $0.2975 per gallon for diesel.10Montana Department of Transportation. Motor Fuel Tax Rates Federal fuel tax adds to that, bringing pump-price taxes to roughly $0.514 per gallon for gasoline and $0.5415 for diesel.
Cannabis Taxes
Cannabis carries the highest consumer tax rates in Montana. Adult-use recreational marijuana is taxed at 20% of the retail price. Medical marijuana is taxed at 4%.11Montana Department of Revenue. Cannabis Tax Counties can add a local-option marijuana excise tax of up to 3%.12Montana State Legislature. Montana Code 16-12-310 – Limit on Local-Option Marijuana Excise Tax Rate — Goods Subject to Tax Where a county has adopted it in full, a recreational purchase can hit 23%. Medical cardholders top out at 7%.
Buying a Vehicle: Fees Instead of Sales Tax
Montana doesn’t charge sales tax when you buy a car. Instead, you pay an annual registration fee at the county treasurer based on the vehicle’s age. For light vehicles weighing one ton or less, the fees are $217 per year for vehicles up to four years old, $87 per year from five to ten years old, and $28 per year for vehicles eleven years or older. Vehicles with a manufacturer’s suggested retail price above $150,000 pay an extra $825 surcharge if the vehicle is ten years old or less.13Montana State Legislature. Montana Code 61-3-321 – Registration Fees of Vehicles and Vessels Once a light vehicle turns eleven, you can pay a one-time $87.50 fee for permanent registration.
Counties can also add a local option vehicle tax of up to 0.7% of the vehicle’s assessed value at registration.14Montana State Legislature. Montana Code 61-3-537 – Local Option Vehicle Tax Total cost depends on your county and the age of the car.
A Warning About Montana LLCs
The absence of a Montana sales tax has fueled a strategy where out-of-state buyers form a Montana LLC, buy an RV or luxury car through it, and register the vehicle in Montana to avoid their home state’s sales tax. Setting up the LLC is legal. Using it to sidestep the tax your home state actually imposes is increasingly treated as tax evasion. California, Tennessee, Utah, and Massachusetts have all pursued residents who did this. Utah, for example, imposes a 100% penalty on top of the unpaid tax. States are relying on license plate readers, data sharing, and prosecutions to catch it. If a vehicle is primarily kept and driven in another state, that state generally requires it to be registered there, and the penalties can well exceed the sales tax that was avoided.
Online Orders Shipped to Montana
Online retailers don’t collect Montana sales tax on orders shipped to a Montana address, because there’s no tax to collect. You won’t see one on your receipt regardless of where the seller is based.
The reverse situation is different. Under the U.S. Supreme Court’s 2018 decision in South Dakota v. Wayfair, most states with a sales tax require out-of-state sellers to collect once sales into that state cross a threshold, commonly $100,000 a year. A Montana business selling online across state lines needs to track its sales by destination and register wherever it exceeds each state’s threshold. Montana itself has nothing comparable, because it has no sales tax to enforce.