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Montana Towns: Let us Tax

  • Nov 3, 2015 | Gail Cole

 Flathead Lake, near Kalispell.

There is no statewide sales tax in Montana, although a handful of towns and unincorporated areas with few residents and high rates of tourism are permitted to levy a local resort tax on retail sales, food, and lodging. Yet for years, there has been talk of a need for alternative sources of revenue — and one such source is local option sales tax.

The existing local sales tax is popular in Whitefish, a small town with a big appeal to tourists. It has funded bike paths and tennis courts, new sidewalks and smooth streets, and it also contributes to property tax relief. Many in nearby Kalispell — too big for a resort tax — see what local sales tax can buy and are interested.

In 2007, Kalispell City Manager Jim Patrick told the Missoulian, “We are strongly in support of a local option sales tax.” A similar sentiment has been expressed in both Missoula and Helena. Yet to date, all attempts at creating a local sales tax in Montana have been thwarted. For every voice raised in support of local sales tax, there is another one in opposition.

But proponents aren’t giving up. The argument for local sales tax was resurrected early this year in Kalispell and it has grown louder this fall. Growing numbers of visitors (in-state and out-of-state) are stressing the infrastructures, amenities and services of Kalispell, where property tax accounts for more than half of the budget. As a result, there is a growing call for “self-determination” among city councilors, who would like state law to be amended so that Kalispell and towns in similar situations may “ask voters to decide on sales tax.”

It’s a tough row to hoe. Although most people believe that change is needed, there is little consensus beyond that. And as Representative Keith Regier (R-Kalispell) says, “You got to keep in mind, Montanans have given their say on sales tax. They don’t want one.” The government of Kalispell isn’t ready to give up on local sales tax, but it may eventually have to come up with some other way to handle the projected $3.5 million budget shortfall.

Find accurate local sales tax rates for all states here.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.