Montana is one of five states without a general statewide sales tax. That shapes how the state and its communities raise money.
The main state revenue sources
- Individual income tax, the largest source for the state general fund.
- Property taxes, which fund schools, counties and cities, plus a statewide levy for schools and the university system.
- Natural-resource taxes on coal, oil, gas and metal mines. Some of this money goes into permanent trust funds, such as the coal severance tax trust created by the Constitution.
- Selective sales taxes on lodging, rental cars, fuel, alcohol and tobacco.
Resort taxes
State law lets qualifying resort communities and resort areas adopt a local resort tax on certain goods and services, with voter approval. Communities including Whitefish, West Yellowstone, Red Lodge and the Big Sky area use it to pay for infrastructure, property-tax relief and other local priorities.
Why it matters to residents
Without a sales tax, property-tax changes are felt directly by homeowners. Property values are reappraised by the Department of Revenue on a regular cycle, and those reappraisals, along with legislative changes to tax rates, decide what owners pay.
For more background, see our explainers on the proposed Big Sky TEDD, Montana’s business tax incentives, and how Montana county government works. Find more stories in our Business section.
Sources
- Montana Department of Revenue, Biennial Report: https://mtrevenue.gov/publications/
- Montana Legislative Fiscal Division: https://leg.mt.gov/lfd/
- MCA 7-6-1501 et seq. (resort tax): https://leg.mt.gov/bills/mca/