GREAT FALLS — On Monday, July 10, 2023, the Montana Department of Revenue hosted two meetings in Great Falls to discuss the implications of property assessment letters mailed to landowners.
“We’re bound by law what we have to do,” explained Jason Boggess, Region 2 Manager for the Montana Department of Revenue.
A handout that covered a large portion of what was discussed in a presentation says:
Property Tax Basics
The department’s Property Assessment Division assesses property values throughout the state, but it is the department, legislature, local government, and schools together that determine the property tax amount. The assessed market value, the tax rate, possible exemptions, the mill rate, and possible local government special assessments are the components that make up the total property tax paid by an individual property owner. The department annually provides taxing jurisdictions with the total taxable value of property located in each taxing jurisdiction within a county by the first Monday in August. Local governments then establish their budgets and set their mill levies for property tax calculations and collections based on the certified taxable values provided to each taxing jurisdiction.
Property Tax Dollars are broken down by this:
Local Schools – 32.37%
County – 28.18%
State – 17.79%
Cities and Towns – 11.26%
County-Wide Schools – 5.96%
Fire and Misc. – 4.44%
For Fiscal Year 2023 – Property tax dollars fund local government, public schools, law enforcement, fire protection, road and bridge construction and maintenance, transportation, weed control, and public assistance.
Property Tax Calculations break down like this:
· Current Assessed Value x Tax Rate = Current Taxable Value
· Current Taxable Value x Millage Rate / 1,000 = General Taxes
Residential and Commercial Tax Rates:
The 2023 tax rate for residential property is 1.35 percent and for commercial property is 1.89 percent.
The state is responsible for two areas when it comes to regulations including taxation (property tax rates) which comes from the Legislature and Property Assessed Valuation from the Department of Revenue. At the county level, it is responsible for Property Tax Billing, Property Tax Collection, and Property Tax Reconciliation.
“With our assessment notices going out, we're sending out what the value of the property is based on comparable sales, our cost method. Then once you get your assessed or your market value, then you must take at times the tax rate,” explained Katie Kakalecik, PVS Area Manager for the Department of Revenue. “That's where a lot of the confusion is coming. Our mill levies aren't set yet. They don't get set until about October. So, we're using last year's mill levies that could show an increase in taxes or an inflated increase in taxes. That is very hard on taxpayers right now.”
In June, the Great Falls Public Library Mill Levy Passed in its favor, and ahead in the fall, Great Falls will be voting on a Public Safety Levy Bond and Levy posing a concerning potential for property tax increases.
Nearly 150 people attended the first of the two Monday meetings and many were outraged and focused on issues related to the Great Falls City Commission.
Mayor Bob Kelly was called to the stand to address concerns; one man was upset with what he felt was deceit from the City Commission on the “timely” placement of the Library Mill Levy. Note: the date on which the library election was held was requested by the Library Board of Directors.
He cried, “How come the taxpayers were not aware of this before we voted on the Library Levy?”
“The idea of having that library levy on when it was done was still to be done before the end of this fiscal year so that taxes can be assessed for the levy for the next fiscal year,” responded Kelly. “They can collect it. That was the sole reason for the fact that it's higher now. We had no idea that was going to happen. None whatsoever. And like I say, you can believe that or not, but the people who know me understand it. I have no reason to tell you, not the truth.”
The Department of Revenue values property by all residential, commercial, and industrial land and improvements as of January 1 of each year under, 15-8-201, MCA.
All property in Montana (except forest land) was valued as of January 1, 2022, for the 2023-2024 valuations cycle under 15-7-111, MCA.
The Department uses three approaches to value property:
· Sales Comparison Approach – to value vacant land and residential properties. The department estimates the value of a property by looking at the sales price of a similar property. For residences, sales are adjusted for differences, such as square feet of living area, condition, age, construction quality grade, and basement, using statistical analysis.
· Cost Approach – to value parcels with nontypical circumstances and when the date of the sales available is insufficient or not comparable to the subject property. The approach is based on calculating a property’s replacement cost new of buildings and other improvements, deducting depreciation, and adding the land value.
· Income Approach – to value commercial properties using income and expense data provided by commercial property owners. The department estimates market value by capitalizing a property’s net income into a present worth (market value) of the future income stream of the property.
The department determines the productivity value for agricultural and forest land based on the productive capacity of the land and the appropriate commodity price.
The Department of Revenue also has two tax rebate programs available for property owners.
One is a Property Tax Rebate which the owner must apply beginning August 15 and can receive up to $675.
The second is an Income Tax Rebate and there is no need to apply, it will start going out at the end of July.
The department also will allow you to appeal your property tax assessment, it recommends the best way to set that up is by calling the office at 406-454-7460. The office is located inside the US Bank building at 300 Central Avenue #520 in Great Falls.
For other links regarding information at the meeting find them below:
The customer service line is 406-444-6900.
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