SALES TAX TUESDAY 2019: Montana

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In the 1985 epic ‘Western novel’ Lonesome Dove written by Larry McMurtry (later adapted into a television mini-series), fictional retired Texas Rangers Captain Woodrow F. Call and Captain Augustus ‘Gus’ McCrae set out from Lonesome Dove, Texas on the Texas-Mexico border for Montana; where they intended to build a cattle and horse ranch where they could sell stock to the U.S. Army. Secretly, Gus hopes to find his long-lost love Clara, who is living with her husband in Ogallala (Nebraska), along the way.

Despite finding Clara’s husband near death upon arrival in Ogallala, she rebuff’s Gus for all the years of their separation. Upon deciding to go on with the cattle drive, he tells Clara “…me and Woodrow always like to get to where we start out for in the first place, so it’s on to Montana, even if it don’t make a lick of sense” (or something cowboy similar).

I guess the same might be said of this RV trip and Sales Tax Tuesday episode, since Montana is another state without any state sales tax. But like Gus and Woodrow, “we are Montana bound, even if it don’t make a lick of sense." The reality is that there is nothing ‘senseless’ about Montana, or ‘Big Sky Country,’ other than views like this (as seen from Glacier National Park below) which may leave you ‘senseless’ or at least ‘speechless.’

But, just maybe it's enough to imagine your own Montana ranch in the place where Woodrow Call topped a hill and said, “…we’re gon’a build our ranch right here in this little valley…”

Despite the fact that much of Montana is just about as remote as it was described in Lonesome Dove and later depicted in the mini-series (like the scene picture above), and the state’s population centers are few and far between, the state itself has no general sales tax. But, some of the ‘resort areas’ have been granted authority to levy a ‘local resort tax’ which is a form of local sales tax (as described below).

These resort taxes create a funding source for those communities and resort areas where they have been enacted to permit them to finance a variety of services. They are collected by those communities to meet the specific requirements of those areas within the specific population and economic boundaries established by the enacting authority.

The fundamental idea behind resort taxes is to allow places with high numbers of visitors, but relatively few residents, to manage the wear-and-tear on local infrastructure without overburdening local citizens.

The resort tax is a form of a ‘local sales tax’ that applies only to:

  • Hotels, motels, and other lodging or camping facilities
  • Restaurants, fast food stores, and other food service establishments
  • Taverns, bars, night clubs, lounges, or other public establishments that serve alcohol
  • Destination ski resorts or other destination recreational facilities
  • Luxuries sold in the resort area.

At the time this article was published, the Montana Department of Revenue lists the following as being valid ‘Resort Tax’ areas (& rates):

Montana is a mixture of rugged and fancy. The ‘rich and famous’ fly into Montana during various times of the year to enjoy what the state has to offer. In the winter, it is the winter sports/recreation and the quaint holiday cheer like Christmas time in Bozeman.

I have a good friend named Hal who took me on a tour of Glacier National once, we went to see the Grizzly bears fishing the streams down below. If I ever get to see you, ask me to tell you my 'bear story.' It's a lesson worth learning if you ever intend to travel in areas where bears frequent the terrain.

But maybe your thing is winter sports; and a lot of people head to Whitefish Montana's Big Mountain for all that it offers in the way of winter recreation. Of course, Whitefish is one of those ‘Recreation areas’ where you will pay 3% the Resort Tax.

You will pay the 'tax' on on your resort lodging, food in the resort dining room, drinks in the resort lounge, lift tickets, along with your ski, snowboard and snowmobile rentals, and almost everything else you enjoy while you are vacationing there. But, there is no 'state sales tax,' so that 3% is pretty cheap when you consider that most other winter recreation areas have a lot higher total sales tax.

And speaking of Whitefish, no trip there would be complete without a visit to Whitefish Lake Resort. The resort was built in 1934 and was intended to be a golf course with an airstrip, the clubhouse and restaurant were added within a couple of years. Today, this is still one of the most popular areas for dining and relaxation within the community.  Of course, the picture above is showing it mid-winter, so you can't imagine it during the green times of the year when the golf course beckons and there are guided lake trips for fishing available.

You might enjoy a steak or a seafood specialty while relaxing in the iconic surroundings of the atmosphere that has changed very little since the facility opened way back when.

And even though this is an 'almost no sales tax' (only the recreation tax at Whitefish) little stay, I must still remind you that we are still on one of our Sales Tax Tuesday joint ventures (imaginary RV trips) sponsored by Insightful Accountant and Avalara, the Sales Tax People, in which through the figments of my imagination, I am visiting states with 'sales tax' (and even those without).

That also means I have to put a 'plug in' for the fact that Avalara has automated sales tax solutions that can help you with even the most complicate of sales tax situations, whether you are dealing with complex jurisdictional boundaries to economic nexus. And AvaTax can calculate your sales and use tax in real time as it integrates with your existing business applications to make certain your sales and use tax is right every time.