Owners who rent tourist or vacation homes have state tax responsibility

The Montana Department of Revenue reminds people who rent a room, apartment, or home on a short-term basis to follow state taxation and permitting laws for lodging and accommodations.

Renting vacation or tourist homes on a short-term basis has increased with the popularity of websites that connect owners and users, such as Airbnb, VRBO and Craig’s List.

Owners renting out vacation or tourist homes in Montana for fewer than 30 days at a time must obtain a sales and use tax permit from the Montana Department of Revenue. The home owner needs to collect the combined 7 percent lodging facility use and accommodations sales taxes from the guest or user of the facility. The owner must file a return with the department to report all lodging activity and remit the tax to the state. If tax is not collected from the guest or user, the owner renting the lodging is liable for the tax, including interest and penalties.

“Many people who rent out their homes or part of their homes and properties to tourists and other visitors may not realize that they have a state tax responsibility,” said Mark Schoenfeld, Unit Manager, Business and Income Taxes Division of the Montana Department of Revenue. “We want to help them understand the process and comply with the tax requirement to avoid any penalties, interest and back taxes.”

To register for the sales and use permit, fill out the general registration (GenReg) form. To access the form and the department’s lodging tax guide, visit http://revenue.mt.gov/, click on forms, lodging facility and general registration.

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