(1) When sales of accommodations are combined with food, beverage, recreation, or other charges which are a substantial portion of the charge, the seller shall collect the lodging facility sales and use tax by establishing a sales price using one of the following options: 

(a) 25 percent of all charges each day for each person; or

(b) a charge justified by reasonable documentation.

(2) As required by 15-65-113, MCA, and 15-68-502, MCA, a seller must maintain and have available for inspection, records to substantiate (1)(a) or (b) for the preceding 5 years. The department may request the seller to itemize each charge to verify the correct amount of tax was collected and paid to the department.

(3) A seller must notify a purchaser of the lodging facility use tax and the lodging facility sales tax at the time of purchase. A seller shall separately state the taxes on the receipt, invoice, or other document provided to a purchaser to ensure there is a record of the amount of tax charged.

(4) Lodging facility sales and use taxes do not apply to separately stated charges or fees unless a purchaser must pay the separately stated charge or fee to facilitate the sale or rental of the accommodations, including a fee or a service, commission, or other charge by any online hosting platform. Examples of separately stated charges not subject to the lodging facility sales and use tax include but are not limited to:

(a) telephone;

(b) Wi-Fi access;

(c) faxes/copies;

(d) television;

(e) food;

(f) beverage;

(g) pet charge; or

(h) personal laundry charges.

(5) The department may disallow a seller's method of allocating the lodging facility sales and use tax under (1) if:

(a) the department has reasonable cause to believe that the method of allocation was chosen solely to qualify the facility for a tax exemption as provided in ARM 42.14.303; or

(b) a charge allocated under (1)(b) is not supported by reasonable documentation or itemization.

(6) Lodging facility sales and use taxes include amounts charged for bathhouse facilities or use of tangible personal property used in conjunction with the room, such as a charge for an extra bed.

(7) If campgrounds charge for water, electrical or sewer hookups, and bathhouse facilities, those charges are included in the amount that is subject to tax.

(8) If the seller charges for electricity or cleaning charges as a separate or additional charge, this charge must be included in the amount that is subject to the tax.

(9) Each seller shall maintain records necessary to document gross receipts for the lodging facility sales and use tax. A seller may be required to substantiate gross receipts reported for a particular quarter. For audit purposes, the seller may be required to provide the department access to, or copies of, data which substantiates the reported gross receipts from the original lodging facility sales and use tax receipts.

(10) Such records shall include specific electronic or physical documentation of exempt charges, including but not limited to sales generated through online hosting platforms and short-term rental marketplace. Documentation for centrally billed federal exemptions shall include the first six digits on each credit card used to pay for the accommodations. Documentation for long-term exempt accommodations may include the folio or similar documentation.

(11) The seller shall maintain the records for a period of five years and shall be subject to audit by the department for that period.


History: 15-1-201, 15-65-102, 15-68-801, MCA; IMP, 2-18-501, 15-65-111, 15-65-113, 15-68-102, 15-68-502, MCA; TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD, 1992 MAR p. 2776, Eff. 12/25/92; AMD, 1998 MAR p. 182, Eff. 1/16/98; AMD, 1999 MAR p. 2904, Eff. 12/17/99; AMD, 2003 MAR p. 311, Eff. 2/28/03; AMD and TRANS, from ARM 42.14.105, 2010 MAR p. 2751, Eff. 11/27/10; AMD, 2022 MAR p. 248, Eff. 2/12/22.