Bighorn River Resort Tax FAQs
We aim to provide clear and concise information about the tax and its potential impact on our area. Contact us if you have any questions.
What is a Resort Tax and Resort Area District?
A Resort Tax is a tool created by the State of Montana to help communities mitigate the effects of tourism on their communities. It is a sales tax collected against the sale of tourism activities. This is not a tax collected against businesses, but a sales tax collected from visitors to our area that use our services. The tax collected within a designated Resort Area District (RAD), by the people that conduct business there, and those funds come directly back to that District, to be distributed by a local, elected Board on community projects.
Which products and services can be taxed and which things can't be taxed?
The MCA (Montana Code Annotated) states that all luxury items are taxable. Examples of items that could be taxed in our area include: retail sales, meals at restaurants, lodging, transportation services, guide/outfitter services, and rentals. There are goods and services sold in the District that are deemed to be necessities of life and wouldn't be taxed such as gasoline, medications, and unprepared food items.
Who is responsible for collecting the Resort Tax?
Any business or entity that sells taxable services and products within the Resort Area District. These monies would then be submitted to the Resort Area District Board. The collectors of the tax are permitted to keep 5% of the money they collect to pay for their administration.
How can the Resort Tax be used?
The money collected via the Resort Tax would be used on projects that benefit the communities and community members within the Resort Area District. Some examples are: road maintenance, police force, infrastructure projects, garbage collection, fire protection, schools...
What percentage of tax would be collected?
There are two separate taxes that could be collected. The first is a 3% tax that could be used for any of the reasons mentioned above. The second is a 1% tax that can only be used for specific infrastructure projects.
What project would the 1% tax be used for?
The sewer system in the Fort Smith Water and Sewer District (FSWSD) was recently replaced because it was failing. This new system benefits all members of the Water and Sewer District including the tourists, protects our environment, and ensures that tourism will remain our main economy for years into the future. Much of the funding needed for the project was acquired through grants thanks to the hard work of the District Board, and the remaining balance will be collected against properties in the District via an assessment bond. Beginning in November 2025, property owners will be assessed approximately $600 yearly to repay the bond. Tourists and locals use the District's sewer and water system but the burden to maintain and repair the system falls on the locals. The 1% tax would go towards the repayment of the bond to help offset the impact of tourism on our public infrastructure.
I don't live in the Fort Smith Water and Sewer District, what do I get?
One solution to this question would be for the Board to set up a program where folks outside of the FSWSD could get reimbursed for maintenance on their septic systems using funds from the 3% tax. Whatever we do in the FSWSD could easily be reciprocated for the entire RAD. If you have other solutions to this concern, please share using the contact us page.
How is the Resort Tax distributed equitably to the community?
A locally elected Board of 5 members would be responsible for determining how the funds are distributed. The board can contract with service providers. They could also use an application system available to entities who have uses for the funds. A concern of community members is that if the 1% goes only to the FSWSD, then people outside of the FSWSD would not get treated equally. This application system should use a scoring criteria to rank the applications and one of those criteria should be that funding requests that benefit the most people in the RAD should get a higher rank. If you have ideas on how the Board could determine how the funds are distributed, please share using the contact us page.
How do we become a RAD and be able to collect a Resort Tax?
The conversation first started with a need for funding for the Fort Smith Sewer Project and continued with community members voicing their needs for other services not provided by the Fort Smith Water and Sewer District and minimally provided by the County (such as fire protection). Momentum has been gaining for the past several years. We are now working to educate our community on the Resort Tax and continuing to determine if there is public support. We are currently holding public meetings to answer questions, provide information, and take feedback, ideas, and suggestions. The next step is to get 15% of registered voters to sign a petition to take to the County Commissioners to get a ballot to registered voters to vote on whether or not we will become a RAD and collect the Resort Tax. If you are a registered voter of the proposed RAD and would like to sign the petition, then please let us know via the contact us page. If we get enough signatures on the petition, then the vote will take place this November, 2025. If 51% of returned ballots vote yes, then the elected Board can proceed to collect and distribute the tax.
There will be 4 items to be voted on:
1. If you would like for the proposed RAD to be approved;
2. if you would like for the 3% tax to be collected;
3. if you would like for the 1% tax to be collected; and
4. choice of Board Members.​
How will the collection of the Resort Tax be enforced especially in the case of businesses that operate within the Resort Area District but have addresses outside of the District?
All businesses and rentals that operate within the Resort Area District would be required to register with the Board at the beginning of the calendar year. The Board will most likely contract with a bookkeeper who would be responsible for receiving and keeping track of tax monies, late payments, missed payments, and delinquencies. Random audits could be utilized and in the case of entities that are required to collect the tax but aren't, legal action and or fines could be taken against them.
Why do we need a Resort Tax to pay for services that we already pay for via property tax?
The Bighorn County Commissioners do use our property tax money to pay for services such as road maintenance, police service, and fire protection. However, the money collected falls short when it comes to providing quality service, especially since we are so far from Hardin. We are currently working on meeting with the Commissioners to determine exactly what we are getting (or not getting) from our property tax dollars. We could use Resort Tax monies to leverage our property tax dollars to get better service from Big Horn County.
Police Force:
According to the Big Horn County Sherrif, our County Commissioners have continually made budget cuts that decrease the number of deputies that can be hired to protect us. We are now down to only three deputies for the entire Bighorn County, one of the largest counties in Montana. The Commissioners also recently sold the deputy's house in Fort Smith that was used for housing, making it challenging to have a continued enforcement presence here. Currently, deputies are required to visit Fort Smith once per day. This is not enough during our summer season when there is continued vandalism and theft in fishing access site parking lots, and excessive speeding on hwy 313. The Resort Tax could be used to fund a deputy position as well as to rent or purchase housing for them.
Fire Protection
In November of 2024, the County Commissioners and the Bighorn County Fire Chief held a meeting in Fort Smith to urge us to consider creating a Volunteer Rural Fire District. (These Districts are encouraged and supported by the Montana Department of Natural Resources and Conservation.) The Commissioners let us know that much of the funding for our County Fire Department is dwindling. They tried to pass a levy a few years ago to provide more funding but it did not pass. Therefore, Big Horn County is extremely low on funds for Fire Protection. In addition, the County Fire Department is located in Hardin and it could take up to an hour for them to respond to a fire within the RAD. They are urging us (along with all of the other communities in the county) to create our own Fire Districts to form the first line of defense against fire. Typically, these Rural Fire Districts are funded by a tax to the property owners within the District. Instead of taxing property owners, the Resort Tax could be used to fund a Rural Fire District. Please contact the Big Horn County Commissioners and the Big Horn County Fire Chief with your questions.
I don't want any or need any of these services, why do I have to collect, and in some cases, pay the Resort Tax?
​Fort Smith and the surrounding areas are a diverse community made up of ranchers, farmers, tribal and non-tribal members, business owners, non-business owners, families, fishermen, lakers, retirees, weekenders, rich and poor, and many more. We are here for a wide variety of reasons and no one's reasons are better nor worse than anyone else's. The Resort Tax is a proposed solution to many of the problems that our community faces and was proposed at the request of many members of our community. Every year our taxes increase due to the effects of tourism on our infrastructure and safety services. Yes, you may have to collect and pay the tax in some cases but please consider that there are many people in the RAD that face a financial burden because of the effects of tourism, and ALL community members of the RAD will gain.
You're never going to collect enough money to fund all of the projects and services listed, how much tax funding do you expect to collect?
The amount of funding collected is dependent on the amount of tourism and will fluctuate depending on the year. Not all of the projects on the list will get fully funded, it is just a suggested list of things that the funds COULD be used for and is not all inclusive. Whatever amount of funding collected would be dispersed for the good of our community.