Montana vs. Idaho Lodging Taxes for West Yellowstone and Island Park Airbnb Owners

Island Park and West Yellowstone are close neighbors. But they sit in two different states, and the lodging tax rules are not the same.

If you own a rental cabin in either town, it helps to know which taxes apply, which ones Airbnb and Vrbo handle for you, and which ones are still on you. Here is a plain-language breakdown.

This article is general information, not tax advice. Rates and rules change, so check with the state, the town or your tax professional.

The quick answer

• Island Park, Idaho: Guests pay 6% Idaho sales tax plus 2% Idaho travel and convention tax, for 8% total. Airbnb and Vrbo collect and remit both for bookings made on their sites.

• West Yellowstone, Montana: Guests pay a 4% Montana lodging facility use tax plus a 4% Montana lodging sales tax, for 8% total. Airbnb and Vrbo collect and remit both. On top of that, the Town of West Yellowstone has a 4% resort tax. Neither Airbnb's nor Vrbo's tax pages list it, so plan on collecting and paying it yourself.

• Direct bookings: Any booking made outside Airbnb or Vrbo is your responsibility in both states.

Idaho lodging taxes for Island Park rentals

Idaho taxes short-term lodging at the state level. The Idaho State Tax Commission says lodging is subject to Idaho sales tax and the travel and convention tax when the rental is for 30 days or less.

Idaho's sales tax rate is 6%. The travel and convention tax rate is 2%.

Some parts of Idaho also have an auditorium district tax or a city local option tax. Island Park does not appear on the Tax Commission's list of Idaho cities with a local sales tax. We also did not find a separate Fremont County lodging tax.

Local rules can change, so check with the city or county if you are unsure.

What Airbnb and Vrbo handle in Idaho

Idaho requires short-term rental marketplaces to collect the taxes due on lodging booked through them. The Tax Commission says marketplaces must forward Idaho sales tax and travel and convention tax on those rentals.

Airbnb's Idaho tax page confirms it collects the 6% sales tax and the 2% travel and convention tax on stays of 30 nights or fewer. Vrbo's tax page also lists Idaho state sales tax and travel and convention tax.

If you rent only through these marketplaces, the Tax Commission says you generally do not need your own seller's permit or travel and convention permit.

What you still handle in Idaho

If you take any direct bookings, from a repeat guest, a friend of a friend or your own website, you need to register as a retailer. Then you collect, report and pay the tax on those stays yourself.

If you rent through both a marketplace and directly, each side is responsible for its own bookings. The Tax Commission also notes the marketplace exemption does not cover fees the marketplace doesn't collect tax on.

Montana lodging taxes for West Yellowstone rentals

Montana charges a combined 8% lodging facility sales and use tax. That is a 4% lodging facility use tax plus a 4% lodging sales tax.

The Montana Department of Revenue says each lodging that must collect these taxes needs a seller's permit before doing business. Registration and filing happen through Montana's TransAction Portal (TAP).

What Airbnb and Vrbo handle in Montana

Under Montana Senate Bill 52, online hosting platforms must collect and report these taxes as the seller. Airbnb's Montana tax page lists both 4% taxes on stays of 29 days or fewer. Vrbo's tax page lists both Montana taxes as well.

The Department of Revenue is clear that owners still owe tax on any sales that happen outside a short-term rental marketplace. So direct bookings are on you, just like in Idaho.

The West Yellowstone resort tax

This is the one that catches owners off guard. The Town of West Yellowstone has a resort tax, and the town says the current rate is 4%. That is the original 3% plus an extra 1% approved in 2019.

The town code applies the resort tax to "hotels, motels, condominiums, vacation rentals, cabins and any other nightly or weekly lodging." It puts the duty to collect on each operator.

Airbnb's Montana page lists a resort tax for Big Sky, but not for West Yellowstone. Vrbo's page also lists Big Sky only. So you should expect to charge and pay the West Yellowstone resort tax yourself, even on Airbnb and Vrbo bookings.

How the resort tax gets paid

The town says payments are due by the 20th of every month for the prior month's collections. The town code lets operators keep 2.5% of the tax collected when they pay on time.

The code also exempts lodging for guests who stay longer than 30 consecutive days, if the guest certifies it before the stay. You can find the transmittal form on the town's resort tax page, or call the town office at 406-646-7795.

One note: the Montana Department of Revenue's resort tax page still lists West Yellowstone at 3%. The state does not administer the resort tax, though. The town's own page says 4%, so we follow the town.

Side by side

• : State lodging taxes. island park, id 6% sales + 2% travel and convention, west yellowstone, mt 4% use + 4% sales

• : Collected by Airbnb/Vrbo. island park, id Yes, on their bookings, west yellowstone, mt Yes, on their bookings

• : Local lodging tax. island park, id None found, west yellowstone, mt 4% resort tax

• : Local tax collected by Airbnb/Vrbo. island park, id Not applicable, west yellowstone, mt Not listed on their tax pages

• : Direct bookings. island park, id Owner collects and files, west yellowstone, mt Owner collects and files

Common mistakes to avoid

• Assuming the platform handles everything. In West Yellowstone, the resort tax is usually on you.

• Forgetting direct bookings. A guest who pays you by check still owes state lodging tax.

• Missing the monthly deadline. The West Yellowstone resort tax is due monthly, and the on-time 2.5% allowance only applies if you pay on time.

• Not keeping records. Save booking reports and tax filings in case the state or town has questions.

How Fresh Pine handles lodging taxes

Taxes are one of the less fun parts of owning a rental. As part of our Airbnb management, we handle state and local lodging taxes for owners and remit them on your behalf.

Every month you get a plain-English owner statement showing what your home earned and what was paid. No digging through platform reports.

Fresh Pine is locally owned, and our owners live in the area, in Ashton and Rigby. We manage 25+ homes, including homes in West Yellowstone, so we deal with both sets of rules every month. Learn more about our Airbnb management in Island Park and West Yellowstone.

Want real numbers for your cabin? Request a free revenue projection and we'll show you what homes we manage near yours earn, and what you'd keep. Get my free revenue projection

Sources

• Idaho State Tax Commission, Lodging: Short-term Rental Marketplaces: https://tax.idaho.gov/?p=3163

• Idaho State Tax Commission, Travel and Convention Tax: https://tax.idaho.gov/taxes/travel-and-convention/

• Idaho State Tax Commission, Lodging: Basics: https://tax.idaho.gov/search-category/sales-tax/lodging/

• Idaho State Tax Commission, Sales and Use Taxes: Basics Guide: https://tax.idaho.gov/taxes/sales-use/online-guide/

• Idaho State Tax Commission, City Sales Tax: https://tax.idaho.gov/taxes/sales-use/sales-tax/local-sales-tax/city-sales-tax/

• Montana Department of Revenue, Lodging Facility Sales and Use Tax: https://mtrevenue.gov/taxes/miscellaneous-taxes-and-fees/lodging-facility/

• Montana Department of Revenue, Local Resort Tax: https://revenuefiles.mt.gov/taxes/miscellaneous/local-resort-tax

• Town of West Yellowstone, Resort Tax Information: https://www.westyellowstone.gov/resort-tax-information/

• Town of West Yellowstone Municipal Code, Chapter 3.12 Resort Tax: https://ecode360.com/50312392

• Airbnb Help Center, Occupancy tax collection and remittance in Idaho: https://www.airbnb.com/help/article/2302

• Airbnb Help Center, Occupancy tax collection and remittance in Montana: https://www.airbnb.com/help/article/2314

• Vrbo Help Center, Lodging taxes in the United States (F to M): https://help.vrbo.com/articles/vrbo-stay-taxes-lodging-taxes-united-states-f-m