Should bed-and-breakfasts pay state ‘bed’ tax?

Sen. Dee Brown, R-Hungry Horse

By Freddy Monares/UM Legislative News Service

A bill to include modern-day bed-and-breakfasts in the state’s collection of bed taxes has passed the Montana Senate and will now make its way to the House Taxation Committee Thursday.

Sen. Dee Brown, R-Hungry Horse, is the sponsor of Senate Bill 150, which expands the definition of “accommodations” to include things like vacation homes or rooms rented by owners.

The state’s bed tax, or lodging facility sales and use tax, is 7 percent of the nightly rate collected by hotels, motels and campgrounds – 4 percent coming from lodging facility use tax, and the remainder from a facility sales tax.

The facility use tax is deposited to a state special revenue account used to promote the state for tourism and as a location for production of motion pictures and commercials. The facility sales tax gets deposited to the state’s general fund.

Brown said she didn’t sign the fiscal note on the bill because it said there would be no impact on the general fund.

“I think there is going to be a slight uptick in bed tax because of people who haven’t been aware of it before,” Brown said.

Gene Walborn, Deputy Director of the state’s Department of Revenue, gave testimony as an informational witness during first hearing on the bill. Walborn said state code already exists to collect from these facilities.

“It means a building containing individual sleeping rooms or suites, providing overnight lodging facilities for periods less than 30 days to the general public for compensation. We think that captures these types of models,” Walborn said.

He said the addition of the language doesn’t hurt if the intent is to help people understand the law.

The Legislature has passed 10 taxation bills into law this session, including one bill that provides guidelines for appraising agricultural implements and machinery.

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