Montana

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State of Montana Property Taxes


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State Tax Summary
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The state of Montana names the real property tax Property Taxes with a Market Value for the official value standard. The Market Value is “the value at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy nor sell and both having reasonable knowledge of reasonable facts.” Montana statues, amended.

Property taxes begin with an appraisal of property, last reappraised on December 31, 2002. Montana state law mandates the Department of Revenue to reappraise periodically; the next statewide reappraisal will be complete by December 31, 2008 for property taxes with new values in tax year 2009. In 2003 Montana Legislature approved to continue the phase in of values at a rate of 16.66% per year. This was approved because taxpayers can request partial exemptions for residential and commercial property, when taxpayers apply for an extended property tax assistance program and by reducing the tax rate. There are personal exemptions for homesteads, seniors, veterans, disabled, low-income and several commercial exemptions.

Montana encourages taxpayers to ask questions and not wait for their tax notice. If a taxpayer waits for their bill, the deadline to appeal has passed. Montana encourages taxpayers to use the AB-26 review process. Complete the AB-26 form and a field official will conduct an informal review. If not satisfied, the appeal procedure is five steps. Three approaches are used in Montana to determine value, sales or market, cost, and income. Personal exemptions are for homeowners, renters, seniors, those with disabilities and veterans.

Contents

Responsible agency

  • State of Montana
  • Department of Treasury
  • Property Assessment Division
  • Sam W. Mitchell Building
  • Helena, Montana 59620
  • Voice (406) 443-0811
  • FAX (406) 443-1394

Property tax calendar

Assessment date

Between January 1 and first Monday in August

Valuation Notice Date

Notices are sent annually in spring, April through June

Appeal Deadline

15 days from date of mailing of notice

Bill Payment Date

Two billings; two installments: November 30 and May 31. First installment is (Tax Due / 2) + Assessments; Second Installment is (Tax Due / 2 ).

Property tax rates and dates

Annual assessment of real property

Yes

Classification of property

Residential property is assessed at 3.86% of market value.

Collections

Taxes are collected one year in arrears

Fiscal year

July 1 through June 30. For real property, the fiscal year is same as collection year. For mobile homes taxed as personal property, the collection year is January 1 through December 31.

Level of government responsible for assessment

County, State

Reassessment cycle

Every 5 years

Tax Calculation Rate

Assessed Value x 0.0346 = Taxed Value Taxed Value x Tax Mill Levy = Taxes Due

Residential Exemptions

Exemption claims must be filed to receive exemption from specially treated property.

Tax relief for elderly and low income

The first $80,000 or less of market value of real property, a mobile home, and land not exceeding five acres may be taxed at reduced rates for seniors and low-income taxpayers. Homeowners and renters may qualify as seniors if they are 1.) Age 62 or older ; 2.) resided in Montana for 9 months of the tax year; 3.) must occupy one or more dwellings in Montana for at least 6 months of the year as an owner, renter, or lessee. Homeowners may qualify as low-income if all employment, retirement and disability income is less than $12,974 for a single person or $15,569 for a married couple. Renters may base their property tax deduction as 17% of the rent for one year and deduct from their state income tax if they do not qualify for one of the categories listed above. Homeowners may received a credit on their Montana state income taxes for property taxes equal to 60% of the tax amount that exceeds 3.5% of their household income. Households are not eligible for a property tax credit if their income is totally from Aid to Families with Dependent Children, State Family Assistance or State Disability Assistance.

Veterans

An application may be approved for an honorably discharged disabled veteran in a principal residence, rated 100% disabled, and have an annual gross income of less than $30,000 for a single person and less than $36,000 for a married couple. A property shall continue to be exempt as long as property is primary residence, or if veteran deceased, the spouse continues to occupy the property and has not remarried.

Commercial Exemptions

Agriculture property exemption

Property used for agriculture operations and farm implements; farm food products in storage; all livestock, poultry, bees, implements for planting, cultivating and harvesting sugar beets, sprinkler irrigation systems, and farm buildings with a market value of less than $500 is exempt.

Commercial zones

Local entities may exempt the increased taxable value resulting from reconstruction, remodeling or expansion of an existing commercial building that has not been in business use for at least six months prior to the date of application for tax exemption.

Electric and energy generation

Electric generating facilities constructed before January 1, 2006, have a ten-year exemption. Alternative generation facilities have a five-year exemption. Nonfossil, low emission wood and biomass combustion devices up to $20,000 for use in a single family residence and up to $100,000 for use in a multiple family residence or commercial structure have a ten year exemption.

Government and public property

Municipal corporations, rural fire districts, nonprofit irrigation districts, public libraries, museums, art galleries, zoos, and observatories and water conservation projects are exempt from property tax.

Tax Collector and Officials

Montana has the property tax administered by the county officials. Assessors in the county determine and maintain valuation information and mail the tax notices. County Treasurers collect current and delinquent taxes. County assessors and County treasurers are elected to four-year terms.

Forms

Deduction claim forms from Montana Department of Revenue are available from

Forms due dates

Applications for deductions against real property must be filed with an affidavit to the local tax collector in Montana by March 15 for the Disabled Veteran Exemption and by March 15 for the Property Tax Assistant Program. Proof of income is required for low-income tax relief. The state prefers federal or state income tax forms.

Manufactured and mobile homes, on private land, must be owned by January 1 to be eligible for the deductions to be applied to the tax bill for that year and is taxed as personal property

State assessor's manual

  • Montana Appraisal Manual and
  • Marshall & Swift Cost Manual
  • State of Montana Department of Revenue
  • Property Assessment Division
  • Sam W. Mitchell Building
  • Helena, Montana 59620
  • Voice (406) 443-0811
  • FAX (406) 443-1394
  • Price $25.00 each

How property tax determined

Residential property is assessed at 3.86% of market value and multiplied by the tax levy or mill rate. The local entity determines the mill rate. The assessor may use one of three methods.

Cost Approach

At current labor and material prices, estimate how much it would take to replace the property with one similar to it. Use this method when there are no sales of comparable properties.

Income Approach

For an apartment or office building, estimate how much income the property can produce.

Market Approach

Use other comparable properties that have sold recently, determine the most probable sales price of the subject property.

Appeal Procedure

First

Try to resolve the problem in an informal meeting with the tax assessor in the local county, by filing a written request (ab-26 form) for review.

Second

Next, if not satisfied with the informal meeting, file a formal appeal within 15 days with the County Tax Appeal Board.

Third

If not satisfied, appeal in writing in the next 30 days to the Montana Tax Appeal Board.

Fourth

After the Montana Tax Appeal Board holds a hearing and issues a ruling, if dissatisfied, the taxpayer has 60 days to appeal to the District Count.

Fifth

If not satisfied, request a hearing before the State Supreme Court.

Additional tax classifications

Agricultural property tax

Agricultural is Class II and assessed at 30% of assessed value. One-Acre Farmsteads are Class VI and assessed at 3.1% of assessed value.

Commercial property tax

Mines and Mining Claims are Class I. Machinery and Equipment is Class IV and assessed at 11% of assessed value. Utilities are Class V and 12% of assessed value. Railroads are Class VII and 10.6% of assessed value.

Personal property tax

Personal property is not available.

Additional tax bills and charges

Construction Work in Progress

An occupancy tax is imposed in Idaho in lieu of property tax, on all new construction during the construction year . The tax amount is the same as if the structures were on the assessment rolls on July 1, but prorated for portion of the year based on occupancy

Corrected bill

When an error is found on the original tax statement or when property owners go before the Board of Review, resulting in tax increases or decreases, a correct bill is issued when the corrections are made. Corrected bills are also issued when levy rates are wrong, the house is on the wrong tax lot and for homeowner exemption.

Delinquent taxes

Delinquent balances are applied to subsequent bills. A taxpayer may apply to have late charges, interest and property taxes canceled due to undue hardship or property damaged by a casualty loss event . No notices are sent for delinquent taxes in Michigan.

Penalty and Interest charges

2% penalty on each installment missed. Interest is 10% each year on any delinquent balance due for property tax.

Current Legislation and Pending Issues

References





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