DA 14-0260

IN THE SUPREME COURT OF THE STATE OF MONTANA

2015 MT 241

MONTANA DEPARTMENT OF REVENUE,

 Plaintiff and Appellant,

 v.

PRICELINE.COM, INC.; TRAVELWEB, LLC;

TRIP NETWORK, INC.; ORBITZ, LLC; 

EXPEDIA, INC.; HOTELS.COM, L.P.;

HOTWIRE, INC.; TRAVELOCITY.COM, L.P.;

SUITE59.COM, LLC; and DOES 1 THROUGH

1000, INCLUSIVE,

 Defendants and Appellees.

APPEAL FROM: District Court of the First Judicial District,

In and For the County of Lewis and Clark, Cause No. CDV-2010-1056

Honorable Kathy Seeley, Presiding Judge

COUNSEL OF RECORD:

For Appellant:

John W. Crongeyer (argued), Crongeyer Law Firm, P.C.; Atlanta,

Georgia

Teresa G. Whitney, Special Assistant Attorney General, Montana

Department of Revenue; Helena, Montana

David R. Paoli, Paoli Law Firm; Missoula, Montana

William Q. Bird, Kristen L. Beightol, Bird Law Group, P.C.; Atlanta,

Georgia

Robert Finnell, The Finnell Firm; Rome, Georgia

August 12 2015

Case Number: DA 14-0260
2

For Appellees:

Michael Green (argued), D. Wiley Barker, Crowley Fleck PLLP;

Helena, Montana

Elizabeth B. Harrington, Michael W. Weaver, McDermott Will

& Emery, LLP; Chicago, Illinois

Deborah Sloan, Emmanuel Ubinas, Jones Day; Dallas, Texas

Brian Stagner, Scott Wiehle, Kelly Hart & Hallman; Fort Worth,

Texas

Darrel J. Hieber, Skadden, Arps, Slate, Meagher & Flom LLP;

Los Angeles, California

For Amicus Multistate Tax Commission:

Lawrence A. Anderson, Attorney at Law, P.C.; Great Falls, Montana

Bruce Fort, Multistate Tax Commission; Washington, D.C.

For Amicus Montana Chamber of Commerce and Montana Taxpayers

Association:

Stanley T. Kaleczyc, Jessie L. Luther, Browning, Kaleczyc, Berry

& Hoven, P.C.; Helena, Montana

 Argued: April 10, 2015

Submitted: May 26, 2015

 Decided: August 12, 2015

Filed:

__________________________________________

Clerk
3

Justice James Jeremiah Shea delivered the Opinion of the Court.

¶1 The Montana Department of Revenue (Department) appeals a First Judicial 

District Court, Lewis and Clark County, ruling that Online Travel Companies (OTCs) are 

not taxable under Montana’s Lodging Facility Use Tax, §§ 15-65-101 through 136, 

MCA, or Sales Tax, §§ 15-68-101 through 820, MCA. We affirm in part and reverse in 

part.

¶2 We restate the issues on appeal as follows:

1. Whether the District Court erred in determining that the OTCs are not 

required to collect and remit taxes on OTC fees under the Lodging Facility 

Use Tax.

2. Whether the District Court erred in determining that the OTCs are not 

required to collect and remit taxes on OTC fees under the Sales Tax on 

accommodations and campgrounds.

3. Whether the District Court erred in determining that the OTCs are not 

required to collect and remit taxes on OTC fees under the Sales Tax on rental 

vehicles.

4. Whether this Court’s decision should be applied retroactively.

PROCEDURAL AND FACTUAL BACKGROUND

¶3 Appellees Priceline.com, Inc.; Travelweb, LLC; Trip Network, Inc.; Orbitz, LLC; 

Expedia, Inc.; Hotels.com, LP; Hotwire, Inc.; Travelocity.com, LP; Site59.com, LLC; 

and other unnamed entities (“Does 1 through 1000”) are OTCs that provide online travel 

information and secure reservations for travelers for lodging and car rental services in 

Montana. The OTCs use a “Merchant Model,” whereby they negotiate with suppliers for 

a wholesale rate on rooms or rental vehicles, then charge customers a higher amount. 

The difference between the cost to the customer and the wholesale rate paid by the OTC 
4

includes taxes on the wholesale rate and an amount retained by the OTC as compensation 

for its services (“OTC fees”).1 The OTCs collect tax on the wholesale rate and pass the 

collected tax on to the hotel or rental agency, which in turn remits it to the Department. 

Currently, the OTCs do not directly remit taxes to the Department, and they do not 

collect tax on OTC fees.

¶4 In June and July 2010, the Department sent letters to several OTCs, stating, “It 

has come to our attention that you may not be registered with the Montana Department of 

Revenue and/or collecting the 4% Lodging Facility Use Tax, the 3% Lodging Facility 

Sales Tax[,] and/or the 4% Rental Vehicle Sales Tax.” The OTCs responded that they 

had no obligation to register with the Department or to collect the requested taxes. On 

November 8, 2010, the Department filed suit against the OTCs, arguing that the OTC 

fees are taxable under both the Lodging Facility Use Tax and the Sales Tax. The OTCs 

responded by denying responsibility to collect tax on OTC fees received from customers, 

and contending that they are not taxpayers with regard to the Lodging Facility Use Tax or 

Sales Tax. The parties filed cross-motions for summary judgment on these issues.

¶5 On March 6, 2014, the District Court granted summary judgment in favor of the 

OTCs, holding that the plain language of the Lodging Facility Use Tax and Sales Tax 

statutes contains no basis on which to tax OTC fees. The Department appealed the 

District Court’s order. The Multistate Tax Commission filed an amicus brief in support 

of the Department, and the Montana Chamber of Commerce and the Montana Taxpayers 

Association together filed an amicus brief in support of the OTCs. On April 10, 2015, 

 

1 For example, an OTC may pay a hotel a wholesale rate of $100 for a room, and then charge a 

customer $120. OTC fees are included in the twenty-dollar price difference.
5

the Court heard oral argument from the parties. On May 15, 2015, the parties filed 

supplemental briefs on whether the Court must construe and apply the two statutes 

together. The OTCs requested that, if this Court determines that either statute applies to 

the OTC fees, we apply our decision prospectively only.

STANDARDS OF REVIEW

¶6 We review summary judgment orders de novo. Bailey v. State Farm Mut. Auto. 

Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. Summary judgment is 

appropriate when the moving party demonstrates an absence of a genuine issue of 

material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3); 

Smith v. Burlington N. & Santa Fe Ry. Co., 2008 MT 225, ¶ 10, 344 Mont. 278, 

187 P.3d 639. The interpretation of a statute is a question of law that we review 

for correctness. City of Missoula v. Iosefo, 2014 MT 209, ¶ 8, 376 Mont. 161, 

330 P.3d 1180. “[S]tatutory language must be construed according to its plain meaning 

and, if the language is clear and unambiguous, no further interpretation is required.” 

Infinity Ins. Co. v. Dodson, 2000 MT 287, ¶ 46, 302 Mont. 209, 14 P.3d 487.

DISCUSSION

¶7 1. Whether the District Court erred in determining that the OTCs are not required 

to collect and remit taxes on OTC fees under the Lodging Facility Use Tax.

¶8 In 1987, the Montana Legislature adopted the Lodging Facility Use Tax, 

§§ 15-65-101 through 136, MCA, imposing “on the user of a facility a tax at a rate equal 

to 4% of the accommodation charge collected by the facility.” Section 15-65-111(1), 

MCA. Section 15-65-101(1), MCA, defines “accommodation charge” as “the fee 

charged by the owner or operator of a facility for use of the facility for lodging . . . .” 
6

The Lodging Facility Use Tax provides, “The owner or operator of a facility shall collect 

the tax . . . .” Section 15-65-112(1), MCA. A “facility” is “a building containing 

individual sleeping rooms or suites providing overnight lodging facilities to the general 

public for compensation.” Section 15-65-101(4)(a). The statute does not provide a 

definition for “owner or operator.”

¶9 In 2003, the Department promulgated an administrative rule defining “owner or 

operator” as “any person or organization who rents a lodging facility to the public and is 

ultimately responsible for the financial affairs of the facility. Such person may be an 

individual, corporation, partnership, estate, trust, association, joint venture or other 

unincorporated group or entity.” Admin. R. M. 42.14.101(9) (2003).2 The Department 

contends that we should apply this definition and adhere to the Wyoming Supreme 

Court’s reasoning in Travelocity.com, LP v. Wyo. Dep’t of Revenue, 329 P.3d 131 (Wyo. 

2014). In Wyo. Dep’t of Revenue, the Wyoming Supreme Court determined that the 

OTCs were “vendors” under a Wyoming statute requiring vendors to collect and remit 

taxes to the Wyoming Department of Revenue. Wyo. Dep’t of Revenue, 329 P.3d at 139, 

143 (citing Wyo. Stat. Ann. § 39-15-103(c)). Wyoming’s tax code defined “vendor” as 

“any person engaged in the business of selling at retail or wholesale tangible personal 

property, admissions or services . . . .” Wyo. Dep’t of Revenue, 329 P.3d at 139 (quoting 

Wyo. Stat. Ann. § 39-15-101(a)(xv)). The Wyoming Supreme Court determined that the 

OTCs were vendors because they “control the financial aspects of the [retail] transaction 

 

2 The Department promulgated similar versions of this rule in 2010, Admin R. M. 42.14.101(10) 

(2010), and 2011, Admin R. M. 42.14.101(10) (2011). The 2010 version of Admin R. M. 

42.14.101 took effect on November 27, 2010. Accordingly, we refer to the 2003 version because 

that is the version that was in effect when the Department filed suit on November 8, 2010.
7

completely.” Wyo. Dep’t of Revenue, 329 P.3d at 143. However, the Department itself 

defined “owner or operator” as an individual or entity who is “ultimately responsible for 

the financial affairs of the facility.” Admin. R. M. 42.14.101(9) (2003) (emphasis added). 

The OTCs do not participate in the day-to-day bookkeeping of a facility, make 

management decisions, or decide how a facility will spend its revenue. In short, they are 

not responsible for the financial affairs of a facility. Accordingly, the OTCs are not 

owners or operators under the Department’s administrative definition.

¶10 In the absence of a statutory definition for “owner or operator,” courts in other 

jurisdictions have applied the dictionary definition. E.g., Pitt Cnty. v. Hotels.Com, LP, 

553 F.3d 308, 313 (4th Cir. 2009) (“Operator” means “a person who actively operates a 

business . . . whether as owner, lessor, or employee,” and “operate” means “to manage 

and put or keep in operation whether with personal effort or not.”) (quoting Webster’s 

Third New International Dictionary 1580-81 (2002)); City of Branson v. Hotels.com, LP, 

396 S.W.3d 378, 383 (Mo. Ct. App. 2013) (defining “operate” as “[t]o run or control the 

functioning of . . . [,]” and “operator” as “[t]he owner or director of a business or 

industrial concern.”) (quoting The American Heritage Dictionary of the English 

Language 920-21 (1975)) (changes in original). The OTCs do not fit within the 

dictionary definition of “owners or operators.” They do not possess, run, control, 

manage, or direct the functioning of a hotel or rental agency.

¶11 The plain language of the Lodging Facility Use Tax provides no basis for taxing 

OTC fees. The OTCs are not required to collect or remit the Lodging Facility Use Tax 

on OTC fees. Because we resolve this issue on the plain language of the statute, statutory 
8

interpretation rules dictate that no further interpretation of the Lodging Facility Use Tax 

is required. Dodson, ¶ 46.

¶12 2. Whether the District Court erred in determining that the OTCs are not required 

to collect and remit taxes on OTC fees under the Sales Tax on accommodations 

and campgrounds.

¶13 In 2003, Montana adopted the Sales Tax, imposing a sales tax of “3% on 

accommodations and campgrounds,” and “4% on the base rental charge for rental 

vehicles.” Section 15-68-102(1), MCA. Under § 15-68-102(2), MCA, “The sales tax is 

imposed on the purchaser and must be collected by the seller and paid to the 

[D]epartment by the seller. . . . The sales tax must be applied to the sales price.” A

“seller” is a person who “makes sales, leases, or rentals of personal property or services.” 

Section 15-68-101(16), MCA. A “purchaser” is “a person to whom a sale of personal 

property is made or to whom a service is furnished.” Section 15-68-101(10), MCA. The 

“sales price” is the “total amount or consideration . . . for which personal property or 

services are sold, leased, or rented or valued in money . . . .” Section 15-68-101(14)(a), 

MCA.

¶14 The OTCs argue that the Sales Tax and the Lodging Facility Use Tax have the 

same scope, so the two statutes must “sink” together. To support their position, the OTCs 

cite the Department’s administrative rule, which provides: “‘Sales price’ as defined in 

[§] 15-68-101, MCA[,] is synonymous with the term ‘accommodation charge’ as defined 

in [§] 15-65-101, MCA.” Admin. R. M. 42.14.101(15) (2010). That administrative rule 

first was promulgated in 2010, and it did not take effect until after the Department filed 

suit. Further, this Court is not bound to an agency’s definition of a statutory term. See 
9

Denke v. Shoemaker, 2008 MT 418, ¶ 39, 347 Mont. 322, 198 P.3d 284 (stating that 

Montana courts review an agency’s interpretation of law for correctness). The Sales Tax 

contains no language indicating that the sales price of an accommodation or rental 

vehicle is the fee charged by the owner or operator. Instead, the statute dictates that 

“sellers” must collect tax from “purchasers.” Section 15-68-102(2), MCA. Unlike the 

Lodging Facility Use Tax, the Sales Tax specifically provides for taxing services valued 

in money. The statute defines service as “an activity that is engaged in for another person 

for consideration and that is distinguished from the sale or lease of property.” Section 

15-68-101(17)(a), MCA.

¶15 Neither party disputes that the OTCs charge hotel customers a fee for the services 

they provide, separate from the wholesale rate that the OTCs pay the hotel for a room. 

The OTCs’ receipt of payment from customers for booking hotel rooms unambiguously 

is “an activity that is engaged in for another person for consideration,” 

§ 15-68-101(17)(a), MCA, which the OTCs themselves distinguish from the sale or lease 

of property. While the statutory definitions of “sale” and “service” distinguish the sale of 

property from a service, the statute clearly taxes both transactions. Although, at oral 

argument, the OTCs contended that the Legislature’s use of the term “service” was in 

error, the Department pointed out that “service” appears over forty times in the Sales Tax 

statute. Accordingly, the Department’s administrative interpretation that “sales price” is 

synonymous with “accommodation charge” is incorrect.

¶16 This determination leads us to further conclude that the Lodging Facility Use Tax 

and the Sales Tax are inconsistent and incompatible. The statutes, created sixteen years 
10

apart, tax two separate transactions. The Lodging Facility Use Tax taxes the user of a 

facility on the amount that an “owner or operator” of the “facility” charges for a room. 

Because the OTCs are not owners or operators of facilities, their fees are not subject to 

the Lodging and Facility Use Tax. By contrast, the Sales Tax taxes the purchaser on the 

sales price of an accommodation or rental vehicle, which specifically includes the value 

of services. Accordingly, the statutes need not be construed in pari materia.

¶17 The plain meaning of the Sales Tax requires taxing OTC fees.3 It also requires the 

OTCs, who are “sellers” because they “make[] sales . . . of services,” to collect and remit 

to the Department taxes on those fees.

¶18 3. Whether the District Court erred in determining that the OTCs are not required 

to collect and remit taxes on OTC fees under the Sales Tax on rental vehicles.

¶19 The OTCs argue that they are not liable for the Sales Tax on rental vehicles 

because the tax is applied to the “base rental charge for vehicles.” The OTCs rely on the 

 

3 We further note that there is support for our decision in other jurisdictions. See City of Gallup 

v. Hotels.com, LP, No. 06-0549-JC, 2007 U.S. Dist. LEXIS 86720, at *5, 13-14 (D.N.M. Jan. 30, 

2007) (taxing the entire amount that a hotel guest pays an OTC as the “total amount of rent paid 

for lodging,” collected by the “vendor”) (citing City of Gallup Lodger’s Tax Ordinance 

§§ 3-2C-3, 3-2C-7); City of Fairview Heights v. Orbitz, Inc., No. 05-CV-840-DRH, 2006 U.S.

Dist. LEXIS 47085, at *19-20 (S.D. Ill. July 12, 2006) (holding that the “rent charged” is the

amount that a hotel room occupant paid to the OTC, not the negotiated wholesale rate) (citing 

Fairview Heights, Ill., Code § 32-2-2); Expedia, Inc. v. Dist. of Columbia, Nos. 14-CV-308 & 

14-CV-309, 2015 D.C. App. Lexis 288, at *2-3 (D.C. July 23, 2015) (agreeing with the trial 

court that a tax on “the sale or charge for any room . . . furnished to transients by any hotel” 

included OTC fees because it was “a sales tax rather than an operator’s tax”) (citing D.C. Code 

§ 47-2001(n)(1)(c)); City of Atlanta v. Hotels.com, 710 S.E.2d 766, 769 (Ga. 2011) (holding that, 

“[s]ince the consumer cannot obtain the right to occupy the room without paying the retail room 

rate charged by the OTC,” that retail rate is the “taxable amount or ‘rent,’” where “rent” means 

“the consideration received for occupancy valued in money”) (citing City of Atlanta Code of 

Ordinances § 146-76) (emphasis removed); Expedia, Inc. v. City of Columbus, 681 S.E.2d 122, 

128 (Ga. 2009) (holding that a “7% excise tax based on the ‘charge to the public’ for a hotel 

room” applied to “the price Expedia demands from the consumer for the right to occupy the hotel 

room and not the price Expedia agrees to pay the hotel for the room”) (citing Columbus Code 

§ 19-111).
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canon of statutory interpretation expressio unius est exclusio alterius, which holds that 

the expression or inclusion one thing implies the exclusion of another, Black’s Law 

Dictionary 701 (Brian A. Garner ed., 10th ed. 2014), to argue that the list of charges 

included under the definition of “base rental charge” (time of use of the rental vehicle and 

mileage, personal accident insurance, additional or underage drivers, and accessory 

equipment) is exclusive.

¶20 This Court “construe[s] a statute by reading and interpreting the statute as a whole,

without isolating specific terms from the context in which they are used by the 

Legislature,” MC, Inc. v. Cascade City-Cnty. Bd. of Health, 2015 MT 52, ¶ 14, 

378 Mont. 267, 343 P.3d 1208 (quoting State v. Triplett, 2008 MT 360, ¶ 25, 

346 Mont. 383, 195 P.3d 819; Mont. Sports Shooting Ass’n v. State, 2008 MT 190, ¶ 11, 

344 Mont. 1, 185 P.3d 1003) (internal quotation marks omitted), and “if possible, 

‘giv[ing] effect to all’ of its provisions.” MC, Inc., ¶ 17 (quoting § 1-2-101, MCA). 

Section 15-68-102(2), MCA, requires that the sales tax shall be applied to the “sales 

price.” Interpreting “base rental charge” differently than “sales price” would create an 

internal contradiction in the statute. Compare § 15-68-102(1)(b), MCA (imposing a 

“sales tax” of “4% tax on the base rental charge for rental vehicles”), with

§ 15-68-102(2), MCA (“The sales tax must be applied to the sales price.”). Accordingly, 

Montana law governing statutory interpretation dictates that “base rental charge” and 

“sales price” be read as synonymous.

¶21 Further, the definition of “base rental charge” contains a list of charges that the 

term does not include (discounts, airport fees, fuel, intercity drop charges, and 
12

government-imposed taxes). Section 15-68-101(3)(b), MCA. This list is also subject to 

the statutory canon of interpretation expressio unius est exclusio alterius. Reading “base 

rental charge” as synonymous with “sales price” resolves the issue of whether the list of 

charges included or the list of charges excluded is exclusive. As discussed above, the 

Sales Tax dictates that the “sales price” includes OTC fees. Accordingly, the list of 

charges included in the base rental charge cannot be exclusive. The Legislature’s use of 

the term “base rental charge” does not change the Sales Tax’s requirement that the OTCs, 

as sellers, collect and remit to the Department taxes on OTC fees.

¶22 4. Whether this Court’s decision should be applied retroactively.

¶23 In their supplemental brief, the OTCs request non-retroactive application of our 

decision, arguing that the imposition of any back sales tax would be inequitable because 

the Department did not take action to collect the tax prior to 2010, and the OTCs will be 

unable to seek reimbursement from past customers. Under the Sales Tax, “All sales 

tax . . . required to be collected . . . constitute[s] a debt owed to this state by the person 

required to collect the sales tax . . . [,]” § 15-68-110(4), MCA, and “[l]iability for the 

payment of the sales tax . . . is not extinguished until the tax[] ha[s] been paid to the 

[D]epartment,” § 15-68-501(1), MCA. As discussed above, the plain language of the 

Sales Tax includes OTC fees. An analysis of whether to apply our decision retroactively 

or prospectively under Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S. Ct. 349 (1971), is 

inapplicable to the present dispute because the Department is entitled to unpaid back 

sales taxes on OTC fees, just as it would be entitled to collect any other debt.
13

¶24 The OTCs argue that it would be inequitable to apply the Sales Tax retroactively 

because they relied on the Department’s guidance, rules, and forms in considering the 

Lodging Tax and Sales Tax coextensive. This argument has merit as applied to the 

enforcement of the Sales Tax prior to the Department filing suit. However, from the time 

that the Department filed suit against the OTCs, alleging that they were liable for 

collecting the Sales Tax, the OTCs were unambiguously on notice that the Department

considered them liable for collection of the Sales Tax. The OTCs were also aware that,

pursuant to § 15-68-110(4), MCA, the Sales Tax is a debt owed to the Department. The 

fact that the OTCs elected not to collect the Sales Tax in the ensuing years after being 

placed on notice by the Department’s lawsuit does not relieve them of this debt. See 

Expedia, Inc. v. District of Columbia, Nos. 14-CV-308 & 14-CV-309, 2015 D.C. App. 

LEXIS 288, at *40, 45 (D.C. July 23, 2015) (retroactively applying a sales tax to OTC 

fees, despite the OTCs’ argument that the District of Columbia’s claims were prevented 

by laches, because the OTCs were on notice that the tax might apply to them). The 

OTCs’ situation is not appreciably different from any other debtor who contests the 

validity of a debt, allows the debt to continue to accumulate during the pendency of the 

litigation to establish the validity of the debt, and then argues it should be absolved of the 

accumulated debt after the debt is determined to be valid. If we were to accept such an 

argument, not only would it result in inequity to the debtee, it would incentivize the 

debtor to prolong the litigation because the longer the matter remained unresolved, the 

greater the debt that would be absolved.
14

¶25 Pursuant to § 15-68-110(4), MCA, the OTCs are liable for payment of the Sales 

Tax from the date the Department filed this lawsuit: November 8, 2010.4

CONCLUSION

¶26 We affirm the District Court’s decision that the Lodging Facility Use Tax, 

§§ 15-65-101 through 136, MCA, does not apply to OTC fees. We reverse the District 

Court’s decision that the Sales Tax, §§ 15-68-101 through 820, MCA, does not apply to 

OTC fees. The OTCs are liable for the Sales Tax on OTC fees dating back to November 

8, 2010.

/S/ JAMES JEREMIAH SHEA

We Concur: 

/S/ MIKE McGRATH

/S/ MICHAEL E WHEAT

/S/ PATRICIA COTTER

/S/ BETH BAKER

Justice Laurie McKinnon, concurring and dissenting.

¶27 I concur with the Court’s conclusion that the OTCs are not responsible for 

collecting and remitting taxes under the Lodging Facility Use Tax, §§ 15-65-101 through 

131, MCA, because they are not “owners” or “operators” of the “facility” as required by 

the statute. However, the statutory language of the Sales Tax, §§ 15-68-101 through 820, 

MCA, is ambiguous as to whether an OTC performs a “service for consideration,” and 

reference to legislative history is therefore required. Because the legislative history 

 

4 Because we determine that the OTCs’ liability for collecting the Sales Tax commences with the 

Department’s filing of this lawsuit, the issue whether the Department’s tax assessment against 

the OTCs is subject to a statute of limitations is moot.
15

clearly establishes that OTCs were not intended to be part of the tax base, I would not 

apply the Sales Tax to OTCs. Finally, where two constructions of a tax statute are 

possible, the question of whether a particular tax applies should be resolved in favor of 

the taxpayer.

¶28 It is well established that “when the terms of a statute are plain, unambiguous, 

direct and certain, the statute speaks for itself and there is nothing for this Court to 

construe.” Cherry Lane Farms v. Carter, 153 Mont. 240, 249, 456 P.2d 296 (1969); In re 

Kesl’s Estate, 117 Mont. 377, 161 P.2d 641 (1945). This Court “must read and construe 

each statute as a whole so as to avoid an absurd result ‘and to give effect to the purpose 

of the statute.’” Skinner Enters., Inc. v. Lewis & Clark Cnty. Bd. of Health, 286 Mont. 

256, 271-72, 950 P.2d 733, 742 (1998) (quoting Christenot v. State, 272 Mont. 396, 401, 

901 P.2d 545, 548 (1995)). Statutes “do not exist in a vacuum. They must be read in 

relationship to one another to effectuate the intent of the statutes as a whole.” Marsh v. 

Overland, 274 Mont. 21, 28, 905 P.2d 1088, 1092 (1995). When more than one statute 

applies to a given situation, such construction, if possible, is to be adopted as will give 

effect to all. Schuman v. Bestrom, 214 Mont. 410, 415, 693 P.2d 536, 538 (1985).

¶29 The primary operative language of the Sales Tax statute states that a “sales tax is 

imposed on the purchaser and must be collected by the seller” and “applied to the sales 

price.” Section 15-68-102(2), MCA. The tax is imposed on “sales of the following 

property or services: (a) 3% on accommodations and campgrounds; (b) 4% on the base 

rental charge for rental vehicles.” Section 15-68-102(1), MCA. In order to ascertain 
16

exactly what the legislature intended to be taxed, we must resort to the definitions of the 

terms in these two sections.

¶30 “‘Sale’ or ‘selling’ means the transfer of property for consideration or the 

performance of a service for consideration.” Section 15-68-101(13), MCA (emphasis 

added). The OTCs are not alleged to be the ones actually maintaining the 

accommodation and transferring possession or control of the hotel rooms, but they do 

perform a service related to the transfer of property. The OTCs act as intermediaries to 

assist hotels and rental car companies in the transferring of property by way of booking 

leases, rentals, and sales. We must therefore also look to the definition of “service” in 

order to ascertain whether the OTCs are performing a service that comes within the 

definition of a “sale.” 

¶31 “‘Service’ means an activity that is engaged in for another person for 

consideration and that is distinguished from the sale or lease of property.” Section 

15-68-101(17)(a), MCA (emphasis added). Within this definition of “service,” the word 

“sale,” again, directs us back to “service for consideration” contained in § 15-68-101(13), 

MCA. “Lease,” “leasing,” or “rental” “means any transfer of possession or control of 

tangible personal property for a fixed or indeterminate term of consideration.” Section 

15-68-101(6)(a), MCA. Although the OTCs, because of their third-party intermediary 

position relating to the sale or lease of property, may be excepted from the service 

definition by way of being “distinguished,” such a construction is not entirely clear upon 

the face of the statute. Whether the legislature intended OTCs to be part of the tax base is 

further obscured by other language in the Sales Tax statute, such as the definition of 
17

“sales price,” which may not include a deduction for “charges by the seller for any 

services necessary to complete the sale, other than delivery and installation charges,” 

§ 15-68-101(14)(a), MCA, and the definition of “seller,” which “means a person that 

makes sales, leases, or rentals of personal property or services,” § 15-68-101(16), MCA. 

¶32 Moreover, both chapters 65 and 68 apply to the same subject 

matter--accommodations and campgrounds—and must be read in relationship to one 

another. Skinner Enters., 286 Mont. at 272, 950 P.2d at 742. For example, the 

definitions of “accommodations” in the Sales Tax and “facility” in the Lodging Facility 

Use Tax are nearly identical. Compare §§ 15-68-101(1), and -102(1)(a)-(b), with 

§§ 15-65-101(1), (4)(a), and -111(1), MCA. Additionally, the tax base for the Sales Tax, 

as set forth in § 15-68-102(1), MCA, applies to “accommodations,” which overlaps with 

the “accommodation charge” and “facility” definitions of the Lodging Facility Use Tax. 

As both the Lodging Facility Use Tax and Sales Tax statutes have the same subject 

matter, they must be construed consistently together and with a construction, if possible, 

which gives effect to each statute. In light of our conclusion in Issue One that OTCs are 

not required to collect and remit the Lodging Tax, and given that the Sales Tax is far 

from clear as to whether OTCs provide a “service,” I would conclude that the Sales Tax 

statute is ambiguous and the Court must resort to legislative history in order to ascertain 

legislative intent.

¶33 Montana’s Lodging Facility Use Tax was established in 1987 to impose upon 

hotel users a tax to be collected by “[t]he owner or operator of [the] facility . . . .” 

Section 15-65-112(1), MCA; 1987 Mont. Laws 1557. In 2003, the Sales Tax was 
18

enacted as part of the Montana Economic Development Tax Act (Act) introduced by 

Senate Bill 407. 2003 Mont. Laws 2196. The Act was aimed at reducing individual 

income tax rates and providing for a “limited” sales tax on “certain property and 

services.” 2003 Mont. Laws 2196. During the 2003 session, the Legislature narrowed 

the scope of the sales tax provision initially proposed and, ultimately, the Sales Tax 

covered only accommodations, campgrounds, and rental cars. S.B. 407, 58th Leg., Reg.

Sess. (Mont. 2003). We observed in State v. Montgomery, 2010 MT 193, ¶ 15, 357 

Mont. 348, 239 P.3d 929, that amendments made during a bill’s consideration can be 

analyzed to determine the intent of the legislature. “‘One of the most readily available 

extrinsic aids to the interpretation of statutes is the action of the legislature on 

amendments which are proposed to be made during the course of consideration in the 

legislature.’” Montgomery, ¶ 15 (quoting 2A Norman J. Singer & J.D. Shambie Singer, 

Statutes and Statutory Construction § 48:18 (7th ed. 2007)). The Fiscal Note to Senate 

Bill 407 described the Sales Tax as a “bill [that] would impose a 3% tax on 

accommodations and campgrounds in addition to the existing accommodations tax[.]” 

Fiscal Note, S.B. 407, 58th Leg., Reg. Sess. (Mont. 2003). The legislative history of 

Senate Bill 407 thus establishes that the Montana Legislature did not intend to create a 

general sales tax, but rather to create a new sales tax on rental cars and increase the tax on

accommodations.

¶34 In 2007, by request of the Department of Revenue, House Bill 147 was introduced 

with a proposal to add intermediaries, like the OTCs, to both the Lodging Facility Use 

Tax and the Sales Tax and make them subject to filing, collection, and reporting 
19

responsibilities. H.B. 147, 60th Leg., Reg. Sess. (Mont. 2007). Specifically, the 

Department sought to amend both statutes because of its long-standing interpretation that 

the two taxes should be enforced as one. See Admin. R. Mont. 42.14.101(6). House Bill 

147 would have substantially revised the existing Lodging Facility Use Tax and Sales 

Tax to include the services of intermediaries like the OTCs. H.B. 147, 60th Leg., Reg. 

Sess. (Mont. 2007). However, the Legislature rejected House Bill 147 and the 

Department’s attempt to expand taxes to the OTCs. In my view, the legislative histories 

of Senate Bill 407 and House Bill 147 demonstrate the intent of the Montana Legislature 

to create and preserve a limited sales tax in Montana which does not include 

intermediaries such as the OTCs. 

¶35 Even if the legislative history were not determinative, it has long been the settled 

rule that, in considering a tax statute that is susceptible to two constructions, any 

reasonable doubt as to the persons or property intended to be subject to a particular tax 

should be resolved in favor of the taxpayer and against the taxing authority. Cherry Lane 

Farms, 153 Mont. at 249, 456 P.2d at 301. It is impermissible for courts to expand a tax 

by implication. In re Estate of Armstrong, 133 Mont. 328, 331-32, 323 P.2d 595, 597 

(1958); see also § 1-2-101, MCA (office of a judge is “not to insert what has been 

omitted or to omit what has been inserted.”). 

¶36 For the foregoing reasons, both the Lodging Facility Use Tax and Sales Tax are 

inapplicable to third-party intermediaries like the OTCs. I would therefore affirm the 

judgment of the District Court in its entirety.
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/S/ LAURIE McKINNON

Justice Jim Rice joins the concurrence and dissent.

/S/ JIM RICE