Montana does not have a statewide sales tax
Montana is one of five states with no sales tax at all. You will not pay a sales tax on purchases at the register in any Montana city or county. This applies to groceries, clothing, electronics, and most other goods you buy in stores or online from Montana retailers.
Some Montana cities and counties do charge a local resort tax or bed tax on hotel stays and short-term rentals, but these are narrow taxes on lodging only, not a general sales tax on all purchases. The state itself collects no sales tax on goods or services.
Key Takeaways
- Montana has no statewide sales tax, so you pay no sales tax on items you buy in stores or from Montana online retailers.
- Some Montana cities and counties charge a local tax on hotel rooms and short-term vacation rentals, but not on regular retail purchases.
- If you buy something online from a retailer outside Montana, you may owe sales tax to that state depending on where the seller is located.
- Montana does have a state income tax and property tax, so the absence of sales tax does not mean the state collects no taxes.
Local resort and bed taxes in Montana cities
While Montana has no sales tax, many towns and cities do charge a tax on hotel rooms and short-term vacation rentals. These taxes fund tourism promotion and local infrastructure. The tax rate varies by location — some cities charge 3 percent, others charge 5 percent or more. You will see this tax added to your bill when you book a hotel or Airbnb in places like Missoula, Bozeman, or West Yellowstone.
These local taxes apply only to lodging, not to meals, shopping, or other purchases you make while visiting. If you are staying in a private home or with friends, you will not pay this tax. The tax is collected by the hotel or rental platform and sent to the city or county.
Resort tax rates are set by individual municipalities, so the amount you pay depends entirely on where you stay. A hotel in one town may charge 4 percent while another nearby charges 6 percent. Always check the total cost before booking, as this tax can add noticeably to your lodging bill.
What taxes Montana does collect
Montana funds state government through income tax and property tax instead of sales tax. If you work in Montana or own property there, you will pay these taxes. Montana's state income tax ranges from 1 percent to 6.9 percent depending on your income bracket. Property tax rates vary by county but are set by local governments.
Some states use sales tax as their main revenue source; Montana chose income and property tax instead. This is why you see no sales tax at the checkout but will see income tax withheld from paychecks and property tax bills in the mail.
The trade-off means Montana residents and workers bear the tax burden through different mechanisms than shoppers in states with sales tax. If you move to Montana from a state with high sales tax, you may notice lower prices at stores but higher income tax withholding on your paycheck.
Buying online from out-of-state retailers
If you order something online from a retailer based outside Montana, you may owe sales tax to that state. Whether you pay tax depends on where the seller is located and whether that state has sales tax. A retailer in California or Washington will charge you their state's sales tax, not Montana's (since Montana has none). A retailer in another no-sales-tax state like Oregon or New Hampshire will not charge you sales tax.
The retailer's location matters more than yours. You are buying from them, not from Montana, so their state's rules apply. If you are unsure whether a particular online purchase will be taxed, check the retailer's website or contact them before you buy.
Some online marketplaces like Amazon collect sales tax based on where they have warehouses or operations, regardless of the retailer's home state. This means you may pay sales tax on a Montana purchase even though Montana has no sales tax, because the marketplace itself is subject to tax in other states.
How Montana compares to neighboring states
Montana is one of five states with no sales tax. The others are Alaska, Delaware, New Hampshire, and Oregon. All neighboring states — Idaho, Wyoming, Washington, and North Dakota — do charge sales tax, ranging from 4 percent to over 9 percent depending on the state and city.
This difference can matter if you live near a state border. Some people cross into Montana to make large purchases to avoid sales tax in their home state. However, technically you may owe "use tax" to your home state on items you bring back, though this is rarely enforced for personal purchases.
If you live in a Montana border town, you may find it cheaper to shop locally than to travel to a neighboring state, even though those states have sales tax. The savings depend on the specific tax rate in the neighboring state and the distance you would travel.
Frequently Asked Questions
Do I pay sales tax on groceries in Montana?
No. Montana has no sales tax on any goods, including groceries, clothing, or household items. You pay the price on the shelf with no tax added at checkout.
Will I pay sales tax if I order something online from a Montana company?
No, not a Montana sales tax. Montana has no sales tax to charge. However, if the Montana company ships to you in another state, that state may charge you sales tax depending on its own rules and the seller's location.
What is the resort tax, and who pays it?
The resort tax is a local tax on hotel rooms and short-term vacation rentals in certain Montana cities. It ranges from 3 to 5 percent or higher depending on the city. You pay it when you book a hotel or rental property, not on other purchases.
If Montana has no sales tax, how does the state pay for schools and roads?
Montana funds government through state income tax and property tax. Income tax is withheld from paychecks, and property tax is billed to property owners. These two sources replace what other states collect through sales tax.
Can I avoid sales tax by buying in Montana and taking it home to another state?
You will not pay Montana sales tax on the purchase itself. However, your home state may require you to pay use tax on items you bring back, though enforcement on personal purchases is uncommon. Check your home state's rules if you are making a large purchase.