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Rental Vehicle Sales Tax

There is a 4% rental vehicle sales tax imposed on the purchaser, which is collected by the seller and remitted to the Department of Revenue.

  • Automobiles (including vans, sport utility vehicles, or trucks having a capacity of 1 ton or less)
  • Motorcycles
  • Motor-driven cycles (meaning motorcycles or scooters with a motor that
    produces 5 horsepower or less)
  • Quadricycles (a four-wheeled motor vehicle, designed for on-road or off-road
    use, that has a motor that produces 50 horsepower or less)
  • Motorboats (including a canoe, kayak, personal watercraft, rubber raft or
    pontoon, propelled by any motor or engine of any description)
  • Sailboats (any vessel that uses a sail and wind as its primary source of
    propulsion)
  • Off-highway vehicles (including motorcycles, quadricycles, dune buggies,
    amphibious vehicles, deriving power from any source other than muscle or wind)
  • Any truck, trailer or semi-trailer with a gross vehicle weight of less than 22,000
    pounds used to transport personal property

Farm vehicles, machinery, equipment, travel trailers, motor homes, airplanes, snowmobiles, golf carts, and sail boards are not subject to the tax.

The tax does not apply to a vehicle rented to the federal government, or any agency or instrumentality of the federal government if the sale is billed directly to and paid directly by the federal government. However, sales to a state, county, or local government are subject to the rental vehicle tax.

The rental vehicle sales tax applies when the vehicle is:

  • rented for a period not exceeding 30 days
  • rented without a driver, pilot, or operator
  • designed to transport 15 or fewer passengers
  • rented pursuant to a contract for insurance
  • rented pursuant to a warranty contract

Base rental charges include:

  • charges for time of use of the rental
  • charges for mileage
  • charges for personal accident insurance
  • charges for additional drivers or underage drivers
  • charges for accessory equipment (child safety seats, luggage racks, etc.)

Base rental charges do not include:

  • vehicle discounts
  • fees imposed to operate at an airport terminal
  • motor fuel
  • intercity vehicle drop charges
  • any taxes imposed by federal, state and local governments

A vendor that files and pays the rental vehicle sales tax timely is allowed a 5% vendor allowance, not to exceed $1,000 per quarter. In addition, each vendor that is required to collect and remit the 4% rental vehicle sales tax must apply to the Department of Revenue for a seller's permit before they can engage in business.

All revenues are deposited to the General Fund. (15-68-101 through 15-68-820, MCA)