Montana does not have a statewide sales tax

Montana is one of five states with no sales tax at all. When you buy something at a store in Montana, you do not pay sales tax to the state. This applies to most goods and services, including clothing, groceries, electronics, and household items.

Some cities and counties in Montana do charge local sales taxes, but these are limited and do not exist everywhere. The amount and what gets taxed varies by location. If you live in or are visiting Montana, you need to know whether your specific city or county has a local tax before assuming a purchase is tax-free.

Key Takeaways

  • Montana has no statewide sales tax, so most purchases across the state are not subject to state-level sales tax.
  • Some Montana cities and counties do charge local sales taxes ranging from 3 percent to 7 percent, depending on the location.
  • Local sales taxes in Montana typically apply to all goods and services, including groceries and prepared food.
  • You can find out whether your city or county charges sales tax by contacting the local tax assessor's office or checking the city or county website.

Which Montana cities and counties charge local sales tax

Not all Montana cities and counties have local sales tax. The ones that do are scattered across the state and do not follow a single pattern. Some larger cities like Missoula and Billings have local sales taxes, while other areas do not.

Local sales tax rates in Montana range from 3 percent to 7 percent, depending on where you are. A city may have its own rate, and the county may have a separate rate, and they stack on top of each other. For example, if a city charges 3 percent and the county charges 2 percent, the total local tax is 5 percent.

The best way to find out whether your location has a local sales tax is to contact the city or county tax assessor's office directly. You can also check the city or county government website, which usually lists the current tax rate and what items are taxed.

What items are taxed under Montana local sales tax

When a Montana city or county does charge local sales tax, the tax usually applies to all goods and most services. This includes clothing, groceries, restaurant meals, and prepared food. Some jurisdictions may exempt certain items like prescription medications or medical devices, but this varies by location.

Services like haircuts, repairs, and professional fees are often taxed under local sales tax rules, though again this depends on the specific city or county. If you are unsure whether a particular purchase will be taxed, ask the seller or contact the local tax assessor.

How local sales tax works when you shop online

Online purchases from out-of-state sellers are generally not subject to Montana local sales tax, even if you live in a city or county that has one. This is because the seller is not located in Montana and does not have a physical presence there.

However, if you buy from an online seller that has a warehouse or office in Montana, that seller may be required to collect local sales tax on your order. The rules around this are complex and change based on where the seller operates and what state laws say. When you check out online, the tax will be added if the seller is required to collect it.

Resale certificates and business purchases

If you own a business in Montana and buy items to resell, you can use a resale certificate to avoid paying local sales tax on those purchases. A resale certificate tells the seller that you plan to resell the item, not use it yourself, so the tax does not apply at the time of purchase.

You will need to register with the Montana Department of Revenue to get a resale certificate. The process and requirements vary, so contact your local tax assessor or the state revenue office for the specific steps in your area.

Frequently Asked Questions

Do I pay sales tax on groceries in Montana?

Not at the state level, since Montana has no statewide sales tax. However, if you buy groceries in a city or county with local sales tax, you will pay that local tax. Some local jurisdictions exempt groceries, but others do not, so check your specific location.

What is the sales tax rate in Missoula or Billings?

Missoula and Billings both have local sales taxes, but the rates change and may differ between the city and county. Contact the Missoula or Billings tax assessor's office, or check the city website, for the current rate that applies to your purchase.

Do I owe sales tax if I buy something online from a Montana company?

It depends on whether the Montana company has a physical location in your city or county. If they do, they may be required to collect local sales tax. If they do not, you typically will not pay local tax at checkout, though state and local tax laws are complex and vary by situation.

Can I return something and get the sales tax back?

Yes, if you return an item to the store where you bought it, the refund should include the local sales tax you paid. The store's return policy will explain how refunds work. Keep your receipt so you can show proof of the tax you paid.