(1) When lodging facility use taxes are combined with food, beverage, recreation, or other charges which are a substantial portion of the charge, the owner or operator may allocate the lodging facility use tax using one of the following:

(a) a flat rate of the allowable state reimbursement for the standard cost of in-state lodging each day for each person;

(b) 25% of all charges each day for each person; or

(c) a charge justified by reasonable documentation.

(2) As required by 15-65-113, MCA, an owner or operator must maintain and have available for inspection, records to substantiate the items referred to in (1) (a) through (c) .  The department may request the owner or operator of a facility to substantiate and itemize each charge to verify the correct amount of tax.

(3) Lodging facility use taxes do not include separately stated service charges which are not an integral part of the use or occupancy of the room or campground space, such as:

(a) separately stated telephone;

(b) television;

(c) food;

(d) beverage; or

(e) personal laundry charges.

(4) The department may disallow an owner or operator's method of allocating the lodging facility use tax under (1) if:

(a) the department has reasonable cause to believe that the method of allocation was chosen solely to qualify the facility for a tax exemption as provided in ARM 42.14.103; or

(b) a charge allocated under (1) (c) is not supported by reasonable documentation or itemization.

(5) Lodging facility use taxes include amounts charged for bathhouse facilities or temporary use of tangible personal property used in conjunction with the room, such as a charge for an extra bed.

(6) If campgrounds charge for water, electrical or sewer hookups, and bathhouse facilities, those charges are included in the amount that is subject to tax.

(7) If the facility charges for electricity as a separate or additional charge, this charge must be included in the amount that is subject to the tax.