Montana’s leaders are grappling with rising property taxes and complex tax structures, prompting debates on the introduction of a statewide sales tax. This issue remains controversial, especially in the Treasure State, where attempts to implement a sales tax have historically been unsuccessful since 1971. Bob Story from the Montana Taxpayers Association highlighted that only once has a limited resort sales tax been introduced in areas like Big Sky and Whitefish.
Historically, Montana’s resistance to a sales tax is strong, with the last serious proposal in 1994 being overwhelmingly defeated by voters. Montana is one of the few states without a sales tax, yet a constitutional amendment caps any potential sales tax at 4%. This preventive measure was enacted in 1994 to maintain legislative control.
A Bureau of Business and Economic Research roadshow is discussing this hot topic across the state. Jeffrey Michael, director of the BBER, remarked, “Certainly, being a no-sales-tax state is part of our cultural identity.”
Tax the Tourists
Support for a sales tax could stem from its potential to tax tourism, a major economic driver in Montana. Local leaders argue that tourists impact infrastructure without contributing taxes on purchases or food. The Legislative Fiscal Division estimates that 88% of a sales tax would affect state residents. Despite existing lodging taxes capturing some revenue from tourists, a 4% sales tax could generate $1.3 billion annually, compared to $2.4 billion from property taxes.
Michael noted that out-of-state residents generally own more valuable properties, so they contribute more through property taxes than they would with a 4% sales tax. Tourists spend less on shopping and more on gasoline, presenting an opportunity to increase the current 33 cents per gallon gas tax for additional revenue, as suggested by Michael.
Tourism Trends
Melissa Weddell from the UM Institute for Tourism and Recreation Research explained that tourism in Montana fell by 4% in 2025, with 13.3 million visitors. Despite this decline, non-resident spending in 2024 exceeded $5 billion. With 75% of visitors being repeat tourists, Montana’s tourism metrics remain positive.
The state ranks third nationally in tourism’s GDP contribution at 4.6%. While Yellowstone and Glacier national parks draw many tourists, activities like mountain biking and target shooting are gaining popularity. Weddell noted that North Dakota’s investment in tourism marketing surpasses Montana’s efforts, attracting more visitors despite fewer natural attractions.
Economic uncertainty poses challenges for Montana’s tourism industry, with rising costs affecting businesses. In recent surveys, 67% of travel-related businesses expressed concern over increasing fuel and goods prices.
