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LFD explains lodging-tax structure: two 4% levies, $125 million in FY24 collections, $44.7 million to general fund
Summary
LFD staff reviewed lodging (accommodations) taxes and recent distribution changes, explained that the two 4% lodging taxes total 8% at point of sale, and that FY24 collections were about $125 million with roughly $44.7 million to the general fund; staff also confirmed short-term rentals under 30 days generally fall under the lodging tax.
LFD staff walked the House Taxation Committee through Montana's lodging tax structure and recent distribution changes for the lodging sales tax and the lodging facilities use tax.
The training described two distinct taxes, each 4 percent, commonly reported together as an 8 percent total lodging charge at hotels and other short-term stays. The presenter said total accommodations tax collections in fiscal year 2024 were about $125 million and that roughly $44.7 million of that was credited to the general fund.
Nut graf: the two lodging taxes are administered separately and have distinct statutory distributions; distribution formulas were adjusted recently and some allocations that had gone to construction and grants have been reallocated under the newer distribution schedule.
Body: The presenter explained that historically the lodging sales tax distributed 75 percent to the general fund and 25 percent to other uses, but the distribution changed starting January 1 of the current year. The updated breakout shown in the LFD brochure used in the presentation allocates portions to Heritage Center operations, historic preservation grants, the Capital Building Development Fund and other state special revenue sources. On the slide, specific allocations after the change were described as 6 percent to Heritage Center operations, 6 percent to historic preservation grants, 7 percent to the Capital Building Development Fund and 6 percent to other state special revenue uses (presenter combined the two taxes to show total distributions).
The presenter also confirmed scope: lodging taxes generally apply to stays under 30 days, which typically includes hotels, short-term rentals and campgrounds. Committee members asked whether multi-month arrangements through platforms such as VRBO would be taxed; the presenter said the rule of thumb is under 30 days and that specific contract structures may vary.
Ending: LFD staff said the interactive accommodations dashboard and an explanatory brochure with statutory citations are available on the LFD website for legislators and the public.
