Bill Aims to Capture Bed Tax from Online Bookings

By James Bradley
Legislative News Service
UM School of Journalism

HELENA — Montana has had a 4% sales tax on hotel rooms and rental cars since the late 80’s. But, the way people rent rooms and cars has changed a lot since then. 

A bill moving through the 2021 Montana Legislature aims to bring that tax into the online era. Senate Bill 52, sponsored by Sen. Jason Ellsworth, R-Hamilton,  would expand the tax to also include bookings from third parties, like Expedia or Priceline. 

The bill’s fiscal note shows the change would add just over $3 million to a state special revenue fund over four years. According to the Montana Department of Commerce, the majority of that money goes to the Office of Tourism and Business Development.

Supporters like Billings hotel owner Steve Wahrlich said the bill would put online sellers on the same level as their brick-and-mortar competitors. 

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“It’s time that we get this right,” Wahrlich said at a hearing for the bill in the House Taxation Committee Tuesday. 

Wahrlich was joined by three other proponents representing physical hotel and rental car companies. 

The only registered opponent was Steve Shur, president of the Travel Technology Association, a Virginia-based lobby. Shur raised concerns about hitting the already struggling tourism industry with what he called a new tax.

“We need to be working together to grow the travel and tourism industry, not tax it.”

Ellsworth said his bill is not a new tax, but rather a modernization of the tax code. 

The bill passed the Senate on a 45-5 vote in February.

James Bradley is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association and the Greater Montana Foundation.