Thinking about listing your Helena property as a short-term rental? The extra income is appealing, but the local lodging tax can be confusing. Hosts often hear about the “8% rule,” and want to know who collects it, what’s taxable, and how to file when you take bookings yourself. This guide walks you through the essentials so you can price correctly, stay compliant, and protect your investment. Let’s dive in.
What the 8% rule means in Helena
Montana does not have a general statewide sales tax, but local governments apply a lodging facility sales and use tax to short stays. In Helena and Lewis and Clark County, the combined rate is commonly referenced as 8% for transient lodging. Always confirm the current combined rate before you set prices or file.
This tax generally applies to short-term stays in homes, condos, cabins, or rooms that meet the local definition of a lodging facility. Stays that meet the local definition of long-term occupancy are typically excluded.
What is usually taxable:
- Nightly base rate
- Mandatory cleaning fees and mandatory service fees
- Nonrefundable reservation or processing fees tied to the stay
What is often excluded:
- Separately stated refundable security deposits
- Sales of goods not tied to the lodging charge
- Long-term stays that meet the local definition of non-transient occupancy
Local ordinances define the specifics, including whether cleaning fees are taxable. Verify the rules for Helena and Lewis and Clark County before you finalize your setup.
Who collects: you or the marketplace
There are two common collection models for short-term rentals:
Marketplace collection. Some booking platforms act as marketplace facilitators and collect and remit local lodging taxes on your behalf. If a platform collects the Helena/Lewis and Clark lodging tax, you should see the tax on guest invoices or your payout statements.
Host collection. If no marketplace collects the tax for a booking, you are responsible for collecting and remitting it. This is typical for direct bookings you take by phone, email, or your own website.
What you should do when a marketplace collects:
- Confirm that the platform collects and remits the Helena/Lewis and Clark lodging tax for your specific listing.
- Save platform statements or certificates showing tax collected and where it was remitted.
- Keep records in case you need to show proof of compliance during an audit.
What you should do when a marketplace does not collect:
- Register for a lodging tax account with the appropriate tax authority before you take taxable bookings.
- Collect the tax from guests and set it aside in your books.
- File and remit on the required schedule, commonly quarterly for many small operators.
Key point: Marketplace collection does not always remove every host obligation. Confirm registration and filing rules that apply to you, and maintain organized records.
How to handle quarterly filing for direct bookings
When you collect and remit the tax yourself, use a simple, repeatable process.
Step 1: Register
- Register for a lodging facility tax account with the Montana Department of Revenue or the local office if required. You will provide business and owner information and receive account access for filing.
Step 2: Track taxable receipts
- Keep a ledger of every booking subject to the lodging tax. Track nights, base rate, mandatory fees, and any nonrefundable charges. Note any exempt stays that meet long-term or other exemptions.
Step 3: Calculate the tax due
- Start with your taxable gross receipts. Subtract exempt amounts if applicable. Multiply the result by 8% to estimate the tax due, then confirm that the full 8% applies to your charge types.
Example:
- 3 nights at $150 per night
- Mandatory cleaning fee: $50 (assume taxable)
- Gross taxable receipts: $500
- Tax due at 8%: $40
Step 4: File and pay
- Many small operators file quarterly. Typical quarters are Jan–Mar, Apr–Jun, Jul–Sep, and Oct–Dec.
- Many jurisdictions require filing and payment within a set window after the quarter ends, often within 30 days. Confirm exact Helena and state due dates.
Step 5: Keep records
- Retain invoices, reservation logs, bank statements, and filed returns. Many agencies require 3 to 7 years of records. Digital backups are a smart idea.
Exceptions and special cases to confirm
Some stays or charges may be treated differently by local rules:
- Long-term stays. Many jurisdictions exempt stays of 30 or more consecutive days. Confirm Helena’s definition of “transient” vs. “long-term.”
- Medical, military, or government stays. Some locales offer specific exemptions. Verify local requirements and documentation.
- Owner-occupied rentals. Primary residence rentals can have unique treatment depending on definitions.
- Bundled charges. Separate taxable lodging from non-lodging items. If you bundle services, confirm which portions are taxable.
When in doubt, verify the exact Helena and Lewis and Clark County provisions before you invoice or file.
Penalties, interest, and audits
Missing a due date or payment can trigger penalties and interest. Agencies can audit lodging tax returns, especially if totals or filings are inconsistent. Strong recordkeeping is your best defense. If a marketplace claimed to remit but did not, you may still be responsible, so retain platform tax statements and reconcile them to your bookings.
Recordkeeping that stands up to review
Keep a simple, consistent paper trail:
- Guest invoices that show lodging charges, mandatory fees, tax, dates, and guest name
- A booking ledger with check-in/check-out dates, nightly rate, fees, tax collected, and tax remitted
- Bank statements or payout summaries that match your ledger
- Copies of filed returns and confirmation numbers
Organized records help you respond quickly to questions and reduce audit risk.
Buying or selling a Helena short-term rental
If you plan to buy or sell a property used as a short-term rental, lodging tax compliance can affect valuation and closing. Outstanding liabilities, missing filings, or weak records can slow a transaction or change deal terms. Ask for proof of filings and remittances, and request tax clearance or closing-period confirmations when appropriate.
Thoughtful due diligence now can protect your timeline and your bottom line.
What to check before you go live
Before you publish your listing or take direct bookings:
- Confirm the current combined lodging facility tax rate for Helena and Lewis and Clark County.
- Verify whether your platform collects and remits for your listing, and how it is shown on statements.
- Confirm filing frequency and due dates for host-collected bookings.
- Clarify whether cleaning and other mandatory fees are taxable in your jurisdiction.
If you have questions about how lodging taxes fit into your pricing or sale strategy, talk with a local professional and review the latest guidance from the Montana Department of Revenue, the City of Helena, and Lewis and Clark County.
Ready to align your short-term rental strategy with the Helena market? Schedule a free, no-pressure consult to talk pricing, compliance basics, and how taxes fit into a purchase or sale plan. Schedule a free consultation with Unknown Company.
FAQs
How the 8% Helena lodging tax works on short stays
- The combined local lodging facility tax is commonly referenced as 8% on transient stays, applied to taxable charges such as nightly rate and mandatory fees.
Whether cleaning fees for Helena short-term rentals are taxable
- Many jurisdictions treat mandatory cleaning fees as taxable lodging charges, but you should confirm Helena’s specific rules before invoicing.
Who collects the 8% if I list on a booking platform
- Some marketplaces collect and remit for you, but coverage varies by platform and location, so you should confirm collection for your listing and keep the statements.
How to register to remit Helena lodging tax for direct bookings
- Register for a lodging facility tax account through the appropriate tax authority, then file and remit on the required schedule, commonly quarterly for small operators.
What records I need in case of a lodging tax audit
- Keep guest invoices, a booking ledger, payout and bank statements, and copies of filed returns for the required retention period, often 3 to 7 years.
What happens if I miss a quarterly lodging tax deadline
- Late filings or late payments can trigger penalties and interest, so file as soon as possible and contact the tax office with any questions.
How lodging taxes affect buying or selling a Helena STR
- Compliance history and any unpaid taxes can affect valuation and closing, so request proof of filings and consider tax clearance during due diligence.
