“MT state sales tax rate is 0%. The average MT sales tax after surtaxes is 0%.”
While there is no statewide sales tax in Montana, several municipalities and localities (particularly large tourist sites) levy local sales taxes on most goods. Tourism-related firms, such as hotels and campers (7%) and rental car companies (7%) are subject to additional taxes (4 percent ). While Montana does not have a sales tax, certain products, such as alcohol, cigarettes and tobacco, and gasoline, are subject to excise taxes. Excise taxes result in higher prices for consumers.
Are you a business owner in Montana? If so, then this article is a must-read for you. In this article, you will get to know everything about Montana Sales Tax 2022, the exemptions, local sales taxes, and a lot more. So if it is something that catches your interest then keep on reading this blog till the conclusion. Let’s begin.
Read More: Alabama Sales Tax 2022 for Businesses: A Complete Guide
Montana State Sales Tax Rules
Montana has no state sales tax, but local governments can collect up to N/A in local choice sales taxes. There are 73 local tax jurisdictions in the state, collecting an average of 0.002 percent in local taxes. Now, let’s look at some of the most common cases:
- Businesses that buy goods to resell
Use the Montana Business Registry Resale Certificate if you are a Montana business and need to send a resale certificate to a seller.
When you make a purchase, give the completed form to your out-of-state merchant. The vendor may accept this certificate in place of a “resale certificate” to exempt the transaction from the state’s sales, use, or transaction tax, but they are not obligated to.
Some states, such as Washington, may ask you to fill out a state-specific form or give additional data.
- Residents of Montana go shopping in another state
There is no sales tax exemption certificate in Montana.
If you’re a Montana resident working or shopping in a state that has a sales tax and wants to learn about the procedures for exempting non-residents from the tax, contact the Department of Revenue of that state.
You can’t claim sales tax from another state on your Montana income tax return.
Therefore, these are the most common tax cases for businesses under Montana sales tax 2022. Additionally, some items are subject to tax exemption as well. Let’s see what are these items.
Montana Sales Tax 2022 Exemptions
The state of Montana does not exempt any purchases from the sales tax. In most states, essentials like groceries, clothing, and pharmaceuticals are either free from sales tax or paid at a lesser rate.
Some things, such as high-end apparel, unhealthy foods and beverages like soda, and non-essential drugs, may not be eligible for the lower sales tax rates. In addition to the sales tax, other commodities such as fuel, alcohol, and cigarettes are subject to other Montana excise taxes.
Alcohol and prepared food (including restaurant meals and some prefabricated grocery items) are subject to a higher sales tax rate in several states. The MT sales tax that applies to the sale of automobiles, watercraft, and real estate varies by jurisdiction. The following are Montana’s sales tax rates for regularly exempted items:
Sales Tax Rate for regularly exempted items
Prepared Food (0%)
Drugs (Prescription + Non- Prescription) (0%)
Therefore, this is all about the Montana sales tax 2022. Now, the question arises, do the sales tax policy the same for online businesses? Let’s see:
The Wayfair Decision and Online Sales Tax
The US Supreme Court held on June 21, 2018, that if a taxpayer is selling to state residents and there is a substantial link between the taxpayer and the state, the state can collect sales tax from them. For example, a corporation must collect sales tax for online retail purchases in South Dakota if
- a company’s gross revenues surpass $100,000, or
- it has completed more than 200 transactions in South Dakota.
Effects on Montanans Who Shop Online
Because Montana does not have a general sales tax, the Wayfair judgment has no impact on Montanans who buy products or services online.
Montanans normally do not owe sales tax to another state, although there may be exceptions for other taxes.
Booking airline tickets online, for example, will incur federal taxes, and booking a hotel or rental car online may incur additional state and local taxes.
Effects on Montana-based businesses who sell products online
Montana firms selling online products to customers in states that require online sellers to collect and remit sales taxes, such as South Dakota, must collect and remit such taxes.
Therefore, the Montana sales tax rate in 2022 is 0%. Being a business owner, you will not have to pay the state sales tax in Montana. Additionally, there are 73 local tax jurisdictions in the state, collecting an average of 0.002% in local taxes. Get in touch with us at Freecashflow.io to get assistance related to business sales tax in the USA.