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Booked! Montana Supreme Court finds resort services fee decision is here to stay


The Supreme Court of Montana affirmed a lower court’s determination that a taxpayer was liable for accommodations sales tax on its resort service fees, but did not owe accommodations sales tax for forfeited guest deposits or lodging facilities use tax on its resort service fees. The taxpayer, Boyne USA, Inc. owns and operates Big Sky Resort in Montana. Boyne charges a resort services fee for amenities such as a children’s club, ski patrol dog demonstrations, tennis court access, summer boat rentals, ski lift rides, shuttle transportation, and movies. The taxpayer also requires payment of a non-refundable deposit 30 days before arrival. The Department audited Boyne for tax years 2011 through 2016, finding that the taxpayer owed sales and use tax for the resort service fees, as well as sales and use tax for forfeited deposit charges. The audit produced an assessment of $685,505.68 in additional tax, interest, and penalties.

Sales Tax on Resort Services Fees

Under Montana’s sales tax on accommodations, charges for services necessary to complete a sale that are separately stated are not subject to sales tax. Mont. Code Ann. §§ 15-68-101(14)(a)(iii), -(b). The taxpayer argued that, because certain resort services fees were necessary to complete the lodging transaction, they were exempt from tax. In response, the lower court concluded that the fee was taxable because it encompassed the entirety of the services sold by the taxpayer; the fee was not merely “necessary to complete the sale.” The Montana Supreme Court agreed, explaining that the resort services fee was – together with the room – the transaction itself. Thus, separately listing the fee and the lodging charges did not exempt the resort service fees from tax.

No Sales Tax on Forfeited Guest Deposits

The Montana Supreme Court also considered whether the forfeited guest deposits were subject to the sales tax on accommodations. The Department submitted evidence showing that, when calculating the deposit amount, Boyne considered applicable state taxes to calculate the total estimated cost upon which it imposed a 20% deposit charge. Because there was no activity engaged in by another person for a consideration – i.e., a “sale” of a “service” – the court concluded that a sale did not occur until a guest arrived at the facility and received the resort’s services. Mont. Code Ann. § 15-68-101(13), -(17) (defining “sale” and “service”). No sale occurred when a guest merely paid the deposit charge, even if subsequently forfeited.

No Lodging Facilities Use Tax on Resort Service Fees

Finally, Montana’s lodging facilities use tax is imposed upon “charges pertaining to accommodations for sleeping and resting at [a] resort.” See Mont. Code Ann. §§ 15-65-101, et seq. Rejecting the Department’s argument that resort services fee was a mandatory fee and an integral part of the accommodations charge, the Montana Supreme Court agreed with Boyne and concluded that the statutory definition of an “accommodation charge” exempts fees for meals, transportation, entertainment or other similar charges attributable to non-lodging purposes. Thus, the so-called bed tax would not apply to the resort services fee because, as the court explained, “while lodging is a ‘use of the resort,’ not all ‘uses of the resort’ are lodging.”

Boyne USA Inc. v. Dep’t of Revenue; DA 20-0319; 2021 MT 155; Cause No. DV-29-2019-48.



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