HomeMy WebLinkAboutMontana Department of Revenue (4)-- - -- - -- - -- - - - --
A- k- Montana Department of Revenue
Dan Bucks
Director
Memorandum
To: Members of the Montana Legislature
Local Government Officials
Public School Officials and
Other Interested Parties
From: Dan Bucks, Director of Revenue
Date: June 2, 2009
Brian Schweitzer
Govemor
Subject: Property Reappraisal and Certification of Taxable Values to Local
Governments
Property taxes represent an integral part of our government finances in Montana. As a
property reappraisal year, 2009 has generated a great deal of discussion about property
taxes and their impact on citizens, businesses and government. We'd like to share
some information we hope is helpful to you in understanding this year's property
reappraisal and certification of taxable values.
The Montana Constitution and state law require periodic reappraisal of property in the
interest of equal taxation. The State of Montana, through the Department of Revenue
(DOR), is responsible for valuing all taxable real and personal property. Once every six
years, the DOR is required by state law to conduct a reappraisal of residential,
commercial, industrial, agricultural and forestland property in the state. We follow state
guidelines to ensure property is appraised in a fair and equitable manner.
Property Assessments for Individuals and Businesses
This summer, individuals and businesses who own real and personal property will be
receiving property assessment notices that reflect the new 2009 reappraised value of
their property. We have redesigned this year's notice to provide more complete
information in a user-friendly format.
As in past reappraisal cycles, we are issuing property assessment notices a bit later
than normal this year due to the additional time and care we took to ensure the
accuracy of our appraisals. To address concerns over potential changes in housing
market conditions due to the declining economy, we collected data six months longer
than normal to capture any late-breaking market trends. We also expanded our market
and income modeling approaches to provide a greater level of precision in our
appraised values.
revenue.mt.gov A Toll free 14866-859-2254 (in Helena, 444-6900) A TDD (406) 4442830
DOR Memorandum
June 2, 2009
Page 2
We welcome hearing from citizens and businesses who have questions or concerns
about their property assessments. We encourage property owners who do not agree
with our determination of the market value or classification of their property to work with
us directly to resolve any concerns by requesting an informal review. Importantly,
property owners will have the same length of time to request an informal review or
appeal of their assessment when it arrives in the mail.
More complete information about the schedule for mailing assessment notices and the
appeal process can be found on the enclosed Fact Sheet or on our website at
revenue.mt gov.
Certified Taxable Values for Local Governments
In late August, all 1,448 local government taxing jurisdictions will be receiving their
individual certification of taxable values. This delivery date is later than in past years
due to our efforts to produce the most accurate values possible--including the
implementation of a change in the method we are required to use to calculate newly
taxable values. In the new calculation, the taxable value of new property is added to the
tax rolls at full phase-in value (please see HB 658, approved by the 2009 Montana
Legislature, for details).
Please refer to our Fact Sheet to better understand the complexity of this reappraisal
cycle and our efforts to ensure a high level of accuracy in our reappraised values.
We understand and apologize for the fact that this later delivery date may
inconvenience some taxing jurisdictions as you set your budgets and calculate mill
levies. Please be aware, however, that under Montana law a taxing jurisdiction still has
45 days from the receipt of the certification of taxable values to set its mill levy.
At this time, we have several new developments in progress that are intended to benefit
all local governments in setting their budgets and providing customer assistance. We
are working hard to provide local governments with access to relevant information from
our property tax computer system, ORION, in September, 2009. We also are working
to improve our communication with you in the future, through a local government
working group and/or a series of regular informational conference calls.
We look forward to working with you and are happy to assist you if you have any
questions.
Enclosure: 2009 Property Reappraisal and Certification of Taxable Values Fact Sheet
2009 Property Reappraisal and Certification of Taxable Values
FACT SHEET
Prepared by the Montana Department of Revenue
Here are some of the facts about the 2009 property reappraisal and certification of taxable values -- the
largest and most complex ever for the Montana Department of Revenue.
Key Statistics
Comparison of 2003 and 2009 Work Volumes
2003 Panel Counts: 875,491
2009 Parcel Counts: 953,203
Percentage Increase: 8.9%
2003 Total Assessment Notices: 622,922
2009 Total Assessment Notices: 688,549
Percentage Increase: 10.5%
Accomplishments
Class 3 Agricultural Land
• First complete reclassification and reappraisal in 46 ears: The last time that we conducted a
comprehensive review of Montana's 50 million acres of agricultural land was in the early 1960s.
• Imp-roved information sources and tech olo : We are now using multiple sources of information,
including United States Natural Resources Conservation Service (NRCS) soil survey information,
Farm Service Agency (FSA) agricultural land use information, existing classification information, as
well as on-site field reviews.
• Preview of agricultural/forest land reapcraisal information: Each producer received a photomap that
displayed their ownership boundary, the land use for each acre of agricultural/forest land and the
productivity determination for each of those land use acres. Each producer was encouraged to
review that information with local office staff if they had questions or concerns.
Class 4 Residential Property
• More than 50% increase in number of market models: We developed new market models-
sophisticated computer models used to determine more precise, accurate estimates of market value
in selected neighborhoods-for 26 additional areas for a total of 68 separate areas covered.
• Additional six months of housing market trending: We extended our data collection efforts for an
additional six months to capture any late-breaking housing market trends.
Class 4 Commercial Property
• Increased use of income model: Our goal was to increase usage of the income approach to valuation
for commercial properties-an approach that involves the capitalization of net operating income into
value using a rate-from approximately 20% to 60%. This allowed us to better capture market trends
and more accurately estimate market values.
Class 10 Forest Land
• Improved information sources and technol : We hired the University of Montana, College of
Forestry & Conservation to develop a state-of-the-art productivity model that updated the existing
forest land productivity estimates with improved data, including soil information, for the 4 million acres
of forest land in Montana.
Timeline
Reappraisal of Class 3, Class 4 and Class 10 Property
July 1. 2008
Reappraisal base year date (extended six-months from customary January 1, 2008)
62n
:128, 2009 (ongoing)
Implement changes passed and approved during the 2009 Legislative Session (such as HB 658).
June 10 - 24, 2009
Assessment notices will be mailed to business owners and agricultural producers for personal property
they own that is not attached to real property.
June 25 - July 13, 2009
Assessment notices will be mailed to owners of mobile homes that are not on a permanent foundation
(personal property mobile homes).
July 13 -- August 7. 2009
Assessment notices will be mailed to owners of residential, commercial, and industrial land and.
improvements, agricultural land, forest land -- also personal property attached to each of these property
types.
Taxpayer Appeals or Requests for Informal Review
30 days after receipt of assessment notice
Deadline to file a request for informal valuation review (Form AB-26).
30 days after receiving a written decision from the DOR on the re guest for informal valuation review AB-
26 orwithin 30 days a Nor recei t of assessment notice whichever is later.
Deadline to file an appeal with the County Tax Appeal Board (CTAB).
Certification of Taxable Values to Local Governments
June 1. 2009
Rule was filed with Montana Secretary of State regarding newly taxable value property calculations.
June 11, 2009
Rule regarding newly taxable value property calculations will be posted to DOR website.
July 1. 2009
Public hearing will be held on rule regarding newly taxable value property calculations.
Assessment notices will be mailed to owners of centrally assessed property.
July 9. 2009
Public comment period will close for rule regarding newly taxable value property calculations.
July 31, 2009
Rule regarding newly taxable value property calculations will become effective.
August 25 - 31,. 2009
Certification of taxable values will be provided to each taxing jurisdiction (1,448 taxing jurisdictions).
45 days after receipt of ce "fication of taxable value after the approval and adoption of the final bud-get
and a levels that will balance the budgets as provided in 7-6-4034 MCA 7-6-4036 MCA
Taxing jurisdictions will determine mill levy.
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