Montana Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Montana

Starting a short-term rental business in Montana requires careful navigation of state and local regulations. While the Big Sky Country offers ample opportunities for vacation rentals, hosts must adhere to specific rules to operate legally and successfully.

At the state level, Montana requires all short-term rental operators to obtain a Public Accommodation License from the Department of Public Health and Human Services. This license ensures that your property meets basic health and safety standards, including potable water, adequate wastewater disposal, and hygienic amenities. An annual inspection is part of this process, helping maintain consistent quality across the state's rental offerings.

Montana also imposes two lodging taxes on short-term rentals: a 4% Lodging Facility Use Tax and a 4% Lodging Sales Tax. These apply to the full listing price, including cleaning fees and guest fees, for stays of 29 days or less. While platforms like Airbnb often collect and remit these taxes on behalf of hosts, it's crucial to verify this and ensure compliance.

Short-Term Rental Licensing Requirement in Montana

To operate a short-term rental in Montana, hosts must obtain a Public Accommodation License from the Montana Department of Public Health and Human Services (DPHHS). This annual license ensures that the property meets basic health and safety standards, such as potable water, adequate wastewater disposal, and hygienic amenities.

The main requirements for obtaining a Public Accommodation License include:

• Completing the application form available on the DPHHS website
• Providing proof of potable water supply
• Demonstrating adequate wastewater disposal
• Ensuring the presence of hygienic amenities like laundry facilities
• Maintaining thorough cleaning and maintenance of the property
• Passing an inspection conducted as part of the approval process

Hosts must submit their application, along with the required documentation and fees, to their local county sanitarian or the DPHHS Food and Consumer Safety Section. The application fee for a Public Accommodation License is $40, and the license must be renewed annually.

The approval process typically takes several weeks, as it includes an inspection to verify compliance with health and safety standards. Once approved, hosts will receive their Public Accommodation License, which must be prominently displayed at the rental property.

In addition to the Public Accommodation License, short-term rental hosts in Montana must maintain a guest register that includes each guest's name and contact information. This register must be stored for a minimum of one year and be available for inspection by local health officials.

Failure to obtain a valid Public Accommodation License or comply with other short-term rental regulations can result in fines and penalties. The DPHHS has the authority to issue fines of up to $500 per violation and may revoke or suspend licenses for non-compliance.

It's important to note that some counties and cities in Montana may have additional licensing or permitting requirements for short-term rentals. For example, the city of Bozeman requires hosts to register their short-term rental, obtain a fire inspection and health inspection, and renew their registration annually. Hosts should contact their local city or county offices to inquire about any additional local regulations.

In summary, obtaining a Public Accommodation License from the Montana DPHHS is a crucial step for short-term rental hosts to ensure compliance with state health and safety standards. Failing to secure this license or adhere to other regulations can result in significant fines and penalties.

Required Documents for Montana Short-Term Rentals

To operate a short-term rental in Montana, hosts must obtain several documents to ensure compliance with state and local regulations. Here are the key required documents:

Public Accommodation License: This annual license, issued by the Montana Department of Public Health and Human Services (DPHHS), ensures that the property meets basic health and safety standards. The application requires proof of potable water supply, adequate wastewater disposal, and the presence of hygienic amenities. Hosts must submit the application, along with the $40 fee, to their local county sanitarian or the DPHHS Food and Consumer Safety Section.

Guest Register: Short-term rental hosts in Montana must maintain a guest register that includes each guest's name and contact information. This register must be stored for a minimum of one year and be available for inspection by local health officials.

Local Permits and Licenses: Some counties and cities in Montana have additional licensing or permitting requirements for short-term rentals. For example, the city of Bozeman requires hosts to register their short-term rental, obtain a fire inspection and health inspection, and renew their registration annually. Hosts should contact their local city or county offices to inquire about any additional local regulations and necessary documents.

Zoning Compliance Documentation: Depending on the property's location, hosts may need to provide documentation demonstrating compliance with local zoning regulations. In Flathead County, for instance, short-term rentals in most zoned areas require an administrative conditional use permit. Hosts must submit a detailed application, pay the required fees, and undergo a review process to obtain this permit.

Fire Safety Inspection: Some local jurisdictions, such as Bozeman and Gallatin County, require short-term rentals to pass a fire safety inspection. Hosts must schedule an inspection with their local fire department and obtain documentation confirming compliance with fire safety standards.

Property Information Form: In Gallatin County, hosts must complete a Property Information Form as part of the application process for properties not located within a municipal planning jurisdiction. This form provides essential details about the short-term rental property.

Water/Wastewater Summary Form: Gallatin County also requires short-term rental hosts to submit a Water/Wastewater Summary Form as part of the application process. This form ensures that the property has adequate water supply and wastewater disposal systems in place.

By obtaining these required documents, short-term rental hosts in Montana can demonstrate compliance with state and local regulations, ensuring the safety and well-being of their guests while contributing to the local economy.

Montana Short-Term Rental Taxes

Short-term rental operators in Montana are subject to several taxes, which are crucial to understand for proper compliance and financial planning. Here's a breakdown of the primary taxes applicable to short-term rentals in the state:

1. Lodging Facility Use Tax: This tax is set at 4% of the total listing price, including cleaning fees and guest fees, for reservations of 29 days or shorter. The Lodging Facility Use Tax is a statewide tax aimed at supporting Montana's tourism industry and infrastructure.
2. Lodging Sales Tax: Also set at 4% of the total listing price (including cleaning and guest fees) for stays of 29 days or less, this tax is separate from the Lodging Facility Use Tax. The Lodging Sales Tax contributes to the state's general fund.
3. Resort Tax: Some popular tourist destinations in Montana, such as Big Sky, impose an additional Resort Tax. In Big Sky, this tax is 4% of the total listing price for reservations of 30 nights or shorter. The Resort Tax helps fund local infrastructure and services in high-tourism areas.
4. Local Taxes: Certain municipalities may impose additional taxes or fees on short-term rentals. These vary by location and can include business license fees or special assessment districts.

It's important to note that platforms like Airbnb often collect and remit the Lodging Facility Use Tax and Lodging Sales Tax on behalf of hosts. However, hosts should always verify this and ensure they're compliant with all local tax requirements.

Possible Write-offs and Deductions

Short-term rental operators in Montana can potentially reduce their tax burden through various deductions. Here are some common write-offs:

1. Depreciation: The cost of the property and furnishings can be depreciated over time.
2. Mortgage Interest: Interest paid on a mortgage for the rental property is typically deductible.
3. Property Taxes: Annual property taxes can be deducted as a business expense.
4. Utilities: Costs for electricity, water, gas, and internet used for the rental can be written off.
5. Cleaning and Maintenance: Expenses for cleaning services, repairs, and general upkeep are deductible.
6. Insurance Premiums: Costs for property and liability insurance related to the rental business can be deducted.
7. Marketing and Advertising: Expenses for promoting your rental, including professional photography or listing fees, are typically deductible.
8. Professional Services: Fees paid to property managers, accountants, or lawyers for rental-related services can be written off.
9. Travel Expenses: Costs incurred while traveling to manage or maintain the property may be deductible.
10. Supplies: Purchases of items like linens, toiletries, and kitchen supplies for guest use can be deducted.

It's crucial to maintain detailed records of all expenses and consult with a tax professional familiar with Montana's short-term rental regulations to ensure you're maximizing your deductions while remaining compliant with state and federal tax laws.

Does Montana Strictly Enforce STR Rules?

Montana's approach to enforcing short-term rental (STR) rules varies significantly across the state, with some cities and counties taking a more proactive stance than others. However, based on discussions in real estate forums like Bigger Pockets and Reddit, it appears that Montana is generally less strict in enforcing STR regulations compared to many other states.

Several Redditors have noted that while cities like Billings have license requirements for STRs in their city code, there is often a lack of dedicated personnel to enforce these ordinances. One user pointed out that STRs are supposed to list their license number on listing websites and register with the city, but many hosts do not comply, and there is no effective system to track and enforce compliance.

Similarly, a Bigger Pockets member shared their experience operating an STR in Montana, mentioning that they have not faced any significant issues or pushback from local authorities, despite not being fully compliant with all regulations. This suggests that enforcement may be somewhat lax in certain areas of the state.

Compared to other states, Montana can be considered relatively Airbnb-friendly. While there are certainly some cities and counties that have implemented more stringent regulations, the overall regulatory landscape is less restrictive than in many other popular STR markets.

The state's approach to STRs is largely decentralized, with individual cities and counties having the authority to set their own rules and regulations. This has resulted in a patchwork of policies across the state, with some areas being more welcoming to STRs than others.

However, even in cities like Whitefish and Bozeman, which have taken steps to limit STRs, there are still opportunities for hosts to operate legally by obtaining the necessary permits and complying with zoning requirements. Additionally, many smaller towns and rural areas in Montana have yet to implement any significant STR regulations, providing a more welcoming environment for Airbnb hosts.

Despite these efforts, many hosts continue to operate STRs in Montana, even in areas with stricter regulations. This can be attributed to the lack of consistent enforcement and the difficulty in tracking and proving non-compliance.

How to Start a Short-Term Rental Business in Montana

Starting a short-term rental business in Montana can be a rewarding venture, but it requires careful planning and execution. Follow these steps to successfully launch your STR business in the Treasure State:

1. Research local regulations: Begin by thoroughly researching the STR regulations in the city or county where your property is located. Familiarize yourself with zoning requirements, permit processes, and any other local rules that may impact your business. This step is crucial to ensure compliance and avoid potential fines or penalties.
2. Obtain necessary licenses and permits: Once you understand the local requirements, obtain all necessary licenses and permits. This typically includes a Public Accommodation License from the Montana Department of Public Health and Human Services (DPHHS) and any additional local permits, such as a business license or conditional use permit. Be prepared to pay the associated fees and undergo inspections as part of the approval process.
3. Prepare your property: Ensure your property meets all health and safety standards required by the DPHHS and local authorities. This may involve upgrades to your water supply, wastewater disposal, and fire safety systems. Additionally, furnish and decorate your property to create an inviting space for guests. Consider hiring a professional photographer to capture high-quality images of your rental for online listings.
4. Choose a pricing strategy: Research the local STR market to determine competitive rates for your property. Consider factors such as location, amenities, and seasonality when setting your prices. Utilize dynamic pricing tools to automatically adjust rates based on demand and maximize your revenue.
5. Create a listing:Develop an attractive and informative listing for your STR on popular platforms like Airbnb and VRBO. Include detailed descriptions, high-quality photos, and information about local attractions and amenities. Be transparent about your property's rules, such as pet policies and occupancy limits, to set clear expectations for guests.
6. Establish a guest communication plan: Develop a system for promptly responding to guest inquiries, providing check-in instructions, and addressing any issues that may arise during their stay. Consider using automated messaging tools to streamline communication and provide a seamless experience for your guests.
7. Implement a cleaning and maintenance protocol: Ensure your STR is consistently clean and well-maintained to attract positive reviews and repeat bookings. Establish a thorough cleaning checklist and consider hiring a professional cleaning service to maintain high standards. Regularly inspect your property for any necessary repairs or updates.
8. Comply with tax requirements: Register with the Montana Department of Revenue and obtain a Lodging Facility Use Tax Permit and a Lodging Sales Tax Permit. Set up a system to collect and remit the required taxes, which include the 4% Lodging Facility Use Tax and the 4% Lodging Sales Tax. Keep accurate records of all income and expenses for tax purposes.
9. Promote your listing: Utilize various marketing channels to promote your STR and attract bookings. Encourage satisfied guests to leave positive reviews on your listing, as this can significantly impact future bookings. Engage with local tourism organizations and online travel forums to increase visibility for your property.
10. Monitor and adapt: Regularly monitor your STR's performance, including occupancy rates, guest feedback, and revenue. Be prepared to adapt your strategies based on market trends and guest preferences. Stay informed about any changes to local regulations that may affect your business, and adjust your operations accordingly.

By following these steps and remaining proactive in managing your STR, you can build a successful and compliant business in Montana's growing vacation rental market.

Who to Contact in Montana about Short-Term Rental Regulations and Zoning?

For questions about short-term rental regulations and zoning in Montana, contact the relevant city or county offices. Here are some key contacts:

Montana Department of Public Health and Human Services (DPHHS)

1. Phone: (406) 444-2837
2. Email: hhslicensing@mt.gov
3. Address: 111 N Sanders St, Helena, MT 59601
4. Contact DPHHS for information on the Public Accommodation License required for all short-term rentals in Montana.

City of Billings Planning Division

1. Phone: (406) 247-8676
2. Email: planning@billingsmt.gov
3. Address: 210 N 27th St, Billings, MT 59101
4. Contact for information on short-term rental permits and zoning in Billings.

City of Whitefish Planning & Building Department

1. Phone: (406) 863-2410
2. Email: planning@cityofwhitefish.org
3. Address: 418 E 2nd St, Whitefish, MT 59937
4. Contact for information on short-term rental licenses, permits, and zoning in Whitefish.

Flathead County Planning & Zoning Office

1. Phone: (406) 751-8200
2. Email: planning.zoning@flathead.mt.gov
3. Address: 40 11th St W Suite 220, Kalispell, MT 59901
4. Contact for information on short-term rental permits and zoning in Flathead County.

City of Missoula Development Services

1. Phone: (406) 552-6630
2. Email: developmentservices@ci.missoula.mt.us
3. Address: 435 Ryman St, Missoula, MT 59802
4. Contact for information on short-term rental registration and zoning in Missoula.

In addition to these official contacts, Montana short-term rental hosts may find the following online communities and resources helpful:

• BiggerPockets Montana Short-Term Rental Forum: Connect with other Montana hosts, ask questions, and share experiences on this popular real estate investing forum.
• Airbnb Hosting Forum for Montana: Join this Facebook group to network with Airbnb hosts across Montana and stay updated on local regulations and best practices.
• Montana Short-Term Rental Alliance: This non-profit organization advocates for fair and reasonable short-term rental regulations in Montana. Their website provides helpful resources and updates on local ordinances.
• Montana Vacation Rental Owners Association: MVROA is a membership-based organization that supports vacation rental owners and managers in Montana through education, advocacy, and networking opportunities.

By reaching out to the appropriate city or county offices and engaging with local host communities, short-term rental operators in Montana can stay informed about the latest regulations and zoning requirements affecting their businesses.

What Do Airbnb Hosts in Montana on Reddit and Bigger Pockets Think about Local Regulations?

Airbnb hosts in Montana have shared their experiences and opinions about local short-term rental regulations on various online forums, including Reddit and Bigger Pockets. Here are some real-life stories and insights from verified Montana threads:

Lack of Enforcement in Billings: In a Reddit thread discussing short-term rental regulations in Montana towns, a user shared their experience with the lack of enforcement in Billings. They mentioned that while the city has license requirements in its code, there is no dedicated person to enforce the ordinance. Many short-term rentals operate without listing their license number or registering with the city, and there is no effective system to track compliance.

Bozeman's Ban on Type 3 Rentals: A Redditor highlighted the recent changes in Bozeman's short-term rental regulations, noting that the city has banned "empty home" short-term rentals (Type 3) within city limits as of December 14, 2023. The ordinance was passed after a concentrated effort by the local tenant union, Bozeman Tenant's United, to address housing concerns. Renting rooms within a primary residence or accessory dwelling units is still permitted.

Flathead County's Zoning Restrictions: In a discussion about successful efforts to limit short-term rentals in Montana, a Reddit user pointed out that Flathead County has restricted short-term rentals to certain zoning classes. In some areas, they are not allowed at all, while in others, they require a conditional use permit with rules about density. This approach has been seen as a step in the right direction, balancing property rights with community concerns.

Challenges of Regulation and Affordability: A Bigger Pockets member shared their thoughts on the effectiveness of short-term rental regulations in making long-term rentals more available or affordable. They emphasized that real estate investors aim to make a profit and that restricting short-term rentals may not necessarily lead to a significant increase in long-term housing stock or lower rents.

Whitefish's Proactive Approach: In a Reddit thread about Montana towns limiting short-term rentals, a user mentioned that Whitefish has cracked down on the issue by pursuing enforcement through zoning and covenants. The city has restricted short-term rentals to specific parts of town, demonstrating that rules can be implemented without infringing upon owners' property rights.

These experiences and opinions from Airbnb hosts in Montana highlight the varying approaches to short-term rental regulations across the state. While some cities like Billings struggle with enforcement, others like Bozeman and Whitefish have taken more proactive steps to address community concerns. Hosts also recognize the challenges in balancing property rights, housing affordability, and the economic benefits of short-term rentals.

As Montana continues to grapple with the growth of short-term rentals, it is likely that more cities and counties will refine their regulations to strike a balance between the needs of hosts, guests, and local communities.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each area and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.