Short-Term Rentals in Carbon County, Montana

Three approvals before you can legally list a property inside Red Lodge city limits

Operating a short-term rental within the City of Red Lodge requires clearing three separate approvals, run by two different levels of government. First, a Public Accommodation License from the Carbon County Sanitarian -- a county-level public-health approval, even though the property itself is inside city limits. Second, a city business license, renewed annually with the City of Red Lodge. Third, a fire inspection scheduled with the Red Lodge Fire Department, with the resulting inspection report required as part of the registration packet. None of the three substitutes for the others -- a completed fire inspection doesn't waive the need for the Sanitarian's accommodation license, and vice versa.

To complete the city's registration workflow, an applicant needs the property's geocode, an emergency contact able to respond to the property within 30 minutes of a call, proof of property ownership, a copy of the Fire Inspection Report, a copy of the Public Health and Accommodations License, and proof of payment of the resort-tax compliance bond described below. Once the paperwork is complete, the registration fee is $250, payable online by credit card or ACH, or by check.

The resort-tax bond and quarterly filing -- a real, ongoing compliance obligation

New hosts must also post a $500 compliance bond to guarantee timely payment of Red Lodge's resort tax. That resort tax currently runs 4% total -- a 3% base resort tax plus an additional 1% dedicated specifically to infrastructure, approved by Red Lodge voters in a June 2020 renewal election under authority the Montana Legislature granted resort communities via SB 241 in 2019. Combined with Montana's 8% state lodging-facility sales and use tax, a Red Lodge short-term rental stay is currently taxed at roughly 11% total. Resort tax collected on gross taxable rental income must be remitted to the city quarterly, due by the 20th of the month following each quarter (January, April, July, and October), shifting to the next business day if the 20th falls on a weekend or holiday. One notable exemption: a stay of 30 consecutive nights or longer is exempt from both the state lodging tax and the city's resort tax, which matters if you're considering a hybrid short-term/monthly rental strategy for the same unit.

This is a city rule -- confirm which jurisdiction actually governs your parcel

Every requirement above -- the accommodation license, business license, fire inspection, $250 registration fee, $500 bond, and 4% resort tax -- applies specifically inside Red Lodge city limits. It does not automatically extend to Carbon County land outside the city, where the county has no county-wide zoning at all (see the hub) and no documented parallel short-term-rental licensing or resort-tax regime of its own. If a short-term or vacation rental strategy is part of why you're evaluating a specific Carbon County parcel, the first practical step is confirming with Carbon County GIS & Addressing or the Planning Office whether the parcel falls inside Red Lodge's city limits or in the unincorporated county -- the compliance list, the tax rate, and the ongoing paperwork are genuinely different depending on the answer.