[Web address]
2021
-2022 Revenue Interim Committee
Members
CHAIR
Sen. Jill Cohenour (D)
(406) 227-1144
VICE CHAIR
Rep. Becky Beard (R)
(406) 479-3048
Rep. Alice Buckley (D)
(406) 404-0891
Sen. Greg Hertz (R)
(406) 253-9505
Sen. Brian Hoven (R)
(406) 761-8533
Rep. Connie Keogh (D)
(406) 298-0985
Sen. Mike Lang (R)
(406) 654-7357
Sen. Edie McClafferty (D)
(406) 490-5873
Sen. Shannon O'Brien (D)
(406) 274-3805
Rep. Mark Thane (D)
(406) 552-3957
Rep. Jeremy Trebas (R)
(406) 899-5445
Rep. Tom Welch (R)
(406) 660-2988
Committee Staff:
Megan Moore, Lead Staff
megan.moore@legmt.gov
Jaret Coles, Attorney
jaret.coles@legmt.gov
Brochure Design:
Laura Sherley, Research Assistant
Data Visualizations:
Dan Kayser, Data Analyst
RESIDENTIAL
PROPERTY TAX
Revenue Interim Committee
HJ 36 Residential Property Tax Study
September 2022
https://leg.mt.gov/committees/interim/ric/
Residential Property Tax
What are property taxes?
A property tax is a tax levied on the value of property. Property taxes are
levied on land, buildings, and certain business property.
Residential property is valued in odd-numbered years. Taxes are billed
annually and due in two payments on November 30 and May 31.
Homeowners with a mortgage often pay property taxes with their mortgage
payments.
Property Taxes Are a Larger Share of State
and Local Revenue in Montana Than in the
U.S.
Property taxes in Montana account for 10% of state taxes compared with 2%
for all states combined. At the local level, Montana property taxes make up
97% of local taxes, considerably more than the 71% share for all states.
Under state law, the property tax is the only tax many cities and counties
may levy. A limited number of localities are permitted to impose local option
resort taxes and some counties levy marijuana taxes.
Property Tax Assistance and Appeals
Call your local Department of Revenue office to apply for a property tax
assistance program or appeal your property value.
Montana has four property tax assistance programs.
• Property Tax Assistance Program: Reduces the tax rate on the
first $200,000 of market value for a primary residence owned by a
single person with income below $23,385 or a married person or
head of household with income below $31,181.
• E
lderly Homeowner and Renter Tax Credit: Income tax credit
for homeowners or renters 62 years of age or older with
household income of less than $45,000. Refundable credit of up to
$1,150 based on property taxes or rent paid in the prior year on a
primary residence.
• D
isabled Veteran Program: Reduces the tax rate on the primary
residence of a disabled veteran or surviving spouse with income
below $54,067 for a single disabled veteran, $62,385 for a married
or head of household disabled veteran, or $47,136 for an
unmarried surviving spouse.
• I
ntangible Land Value Property Exemption: Exempts the
appraised land value that exceeds 150% of the appraised value of
the primary residence and improvements for property owned by a
family for at least 30 years.
The Department of Revenue mails notices of residential property values in
the summer of odd-numbered years. Property owners may appeal the
property value by following the instructions on the notification letter.
1
MONTANA LEGISLATIVE SERVICES DIVISION
Revenue Interim Committee
6
Source: U.S. Census Bureau, Montana Department of Revenue
Residential Property Tax
Taxes Levied by Jurisdiction Type, FY 2022
Taxing Jurisdiction Tax Revenue
Percent
of Total
Local Schools
$657,987,701
33.02%
County
$549,771,437
27.59%
State
$356,591,368
17.90%
Cities and Towns
$209,355,673
10.51%
County-Wide Schools
$129,563,295
6.50%
Fire and Miscellaneous
$89,350,291
4.48%
$1,992,619,764
100.00%
State Laws Limit Property Taxes
Cities and counties are permitted to levy mills to collect the amount of
revenue raised in the prior year plus an inflation factor. The maximum mill
levy is calculated using the current year's taxable value. The application of
the approved mill levy to new property may result in revenue growth. The
total taxable value varies based on the mix of property types, property
values, and the amount of exempt property in the taxing jurisdiction.
School districts use property taxes to fund multiple budgets based on
school funding formulas adopted by the state and based on local
preferences. The main budget for the district's general fund must meet a
minimum level of required funding and is subject to a maximum budget
limit.
Voters May Approve Property Taxes Above State Limits
State law allows cities, counties, school districts, and special districts to ask
voters to collect property taxes higher than those authorized in state law
and to levy property taxes to pay for bonds. These levy elections or bond
issue questions appear on school, city, or county election ballots.
Legislative and Local Government Decisions
Affect Tax Bills
Property taxes are equal to market value times tax rate, known as taxable
value, times mill levies. One mill generates $1 for each $1,000 in taxable
value. State and local entities play a role in making property tax policy,
adopting budgets, and administering the tax.
State Legislature – The Legislature establishes property tax policy for
the state, including property classes, tax rates, valuation methods,
reappraisal cycles, property tax limits, appeal procedures, and property
tax assistance programs.
Taxing Jurisdictions – S
chool districts, cities, counties, and special
districts collect property taxes by setting budgets and mill levies. The
state levies 95 mills for K-12 education and 6 mills for the state university
system.
Department of Revenue – T
he Department of Revenue administers
property tax policies adopted by the Legislature. This includes classifying
property, appraising property, and providing taxable values to property
owners.
County Treasurers – C
ounty treasurers bill and collect property taxes
and distribute revenue to taxing jurisdictions.
5
MONTANA LEGISLATIVE SERVICES DIVISION
Revenue Interim Committee
2
Market
Value
Tax
Rate
Mill Rate/
1,000
Taxes
Source:
Department of Revenue
Taxable value
Example: $400,000 x 1.35% x 650/1,000 = $3,510
Residential Property Tax
Residential Property Pays the Largest Share
of Property Taxes
There are 16 classes of property in Montana with tax rates that vary by class
and range from 0.9% of market value to 100% of net proceeds of mines. In
2020, taxes levied on residential property accounted for 50% of the property
taxes collected in the state. Taxes on commercial property and nonelectrical
generating property of electric utilities each added another 15%.
Residential, commercial, and agricultural property are revalued every 2
years and forest property is revalued every 6 years. All other property is
valued annually.
More Than Half of Montana Property
Taxes Fund Schools
Of the $1.99 billion in property tax revenue collected in FY 2022, $1.12
billion funds K-12 education.
• Local school district property taxes totaled $658 million, or one-
third of collections.
• County-wide school levies make up another 6.5%, or $130
million.
• Of state property tax collections, $334 million is deposited in the
general fund. Though not directly earmarked for K-12 funding,
the revenue accounts for less than half of the $881 million in
general fund revenue budgeted for schools in FY 2022.
The remaining 44% of property taxes are distributed as follows: 27.6% to
counties, 10.5% to cities and towns, 4.5% to fire and miscellaneous
districts, and 1.1% to higher education.
3
MONTANA LEGISLATIVE SERVICES DIVISION
Revenue Interim Committee
4
Source: Department of Revenue
Source: Department of Revenue
Residential Property Tax
Residential Property Pays the Largest Share
of Property Taxes
There are 16 classes of property in Montana with tax rates that vary by class
and range from 0.9% of market value to 100% of net proceeds of mines. In
2020, taxes levied on residential property accounted for 50% of the property
taxes collected in the state. Taxes on commercial property and nonelectrical
generating property of electric utilities each added another 15%.
Residential, commercial, and agricultural property are revalued every 2
years and forest property is revalued every 6 years. All other property is
valued annually.
More Than Half of Montana Property
Taxes Fund Schools
Of the $1.99 billion in property tax revenue collected in FY 2022, $1.12
billion funds K-12 education.
• Local school district property taxes totaled $658 million, or one-
third of collections.
• County-wide school levies make up another 6.5%, or $130
million.
• Of state property tax collections, $334 million is deposited in the
general fund. Though not directly earmarked for K-12 funding,
the revenue accounts for less than half of the $881 million in
general fund revenue budgeted for schools in FY 2022.
The remaining 44% of property taxes are distributed as follows: 27.6% to
counties, 10.5% to cities and towns, 4.5% to fire and miscellaneous
districts, and 1.1% to higher education.
3
MONTANA LEGISLATIVE SERVICES DIVISION
Revenue Interim Committee
4
Source: Department of Revenue
Source: Department of Revenue
Residential Property Tax
Taxes Levied by Jurisdiction Type, FY 2022
Taxing Jurisdiction Tax Revenue
Percent
of Total
Local Schools
$657,987,701
33.02%
County
$549,771,437
27.59%
State
$356,591,368
17.90%
Cities and Towns
$209,355,673
10.51%
County-Wide Schools
$129,563,295
6.50%
Fire and Miscellaneous
$89,350,291
4.48%
$1,992,619,764
100.00%
State Laws Limit Property Taxes
Cities and counties are permitted to levy mills to collect the amount of
revenue raised in the prior year plus an inflation factor. The maximum mill
levy is calculated using the current year's taxable value. The application of
the approved mill levy to new property may result in revenue growth. The
total taxable value varies based on the mix of property types, property
values, and the amount of exempt property in the taxing jurisdiction.
School districts use property taxes to fund multiple budgets based on
school funding formulas adopted by the state and based on local
preferences. The main budget for the district's general fund must meet a
minimum level of required funding and is subject to a maximum budget
limit.
Voters May Approve Property Taxes Above State Limits
State law allows cities, counties, school districts, and special districts to ask
voters to collect property taxes higher than those authorized in state law
and to levy property taxes to pay for bonds. These levy elections or bond
issue questions appear on school, city, or county election ballots.
Legislative and Local Government Decisions
Affect Tax Bills
Property taxes are equal to market value times tax rate, known as taxable
value, times mill levies. One mill generates $1 for each $1,000 in taxable
value. State and local entities play a role in making property tax policy,
adopting budgets, and administering the tax.
State Legislature – The Legislature establishes property tax policy for
the state, including property classes, tax rates, valuation methods,
reappraisal cycles, property tax limits, appeal procedures, and property
tax assistance programs.
Taxing Jurisdictions – S
chool districts, cities, counties, and special
districts collect property taxes by setting budgets and mill levies. The
state levies 95 mills for K-12 education and 6 mills for the state university
system.
Department of Revenue – T
he Department of Revenue administers
property tax policies adopted by the Legislature. This includes classifying
property, appraising property, and providing taxable values to property
owners.
County Treasurers – C
ounty treasurers bill and collect property taxes
and distribute revenue to taxing jurisdictions.
5
MONTANA LEGISLATIVE SERVICES DIVISION
Revenue Interim Committee
2
Market
Value
Tax
Rate
Mill Rate/
1,000
Taxes
Source:
Department of Revenue
Taxable value
Example: $400,000 x 1.35% x 650/1,000 = $3,510
Residential Property Tax
What are property taxes?
A property tax is a tax levied on the value of property. Property taxes are
levied on land, buildings, and certain business property.
Residential property is valued in odd-numbered years. Taxes are billed
annually and due in two payments on November 30 and May 31.
Homeowners with a mortgage often pay property taxes with their mortgage
payments.
Property Taxes Are a Larger Share of State
and Local Revenue in Montana Than in the
U.S.
Property taxes in Montana account for 10% of state taxes compared with 2%
for all states combined. At the local level, Montana property taxes make up
97% of local taxes, considerably more than the 71% share for all states.
Under state law, the property tax is the only tax many cities and counties
may levy. A limited number of localities are permitted to impose local option
resort taxes and some counties levy marijuana taxes.
Property Tax Assistance and Appeals
Call your local Department of Revenue office to apply for a property tax
assistance program or appeal your property value.
Montana has four property tax assistance programs.
• Property Tax Assistance Program: Reduces the tax rate on the
first $200,000 of market value for a primary residence owned by a
single person with income below $23,385 or a married person or
head of household with income below $31,181.
• E
lderly Homeowner and Renter Tax Credit: Income tax credit
for homeowners or renters 62 years of age or older with
household income of less than $45,000. Refundable credit of up to
$1,150 based on property taxes or rent paid in the prior year on a
primary residence.
• D
isabled Veteran Program: Reduces the tax rate on the primary
residence of a disabled veteran or surviving spouse with income
below $54,067 for a single disabled veteran, $62,385 for a married
or head of household disabled veteran, or $47,136 for an
unmarried surviving spouse.
• I
ntangible Land Value Property Exemption: Exempts the
appraised land value that exceeds 150% of the appraised value of
the primary residence and improvements for property owned by a
family for at least 30 years.
The Department of Revenue mails notices of residential property values in
the summer of odd-numbered years. Property owners may appeal the
property value by following the instructions on the notification letter.
1
MONTANA LEGISLATIVE SERVICES DIVISION
Revenue Interim Committee
6
Source: U.S. Census Bureau, Montana Department of Revenue
[Web address]
2021
-2022 Revenue Interim Committee
Members
CHAIR
Sen. Jill Cohenour (D)
(406) 227-1144
VICE CHAIR
Rep. Becky Beard (R)
(406) 479-3048
Rep. Alice Buckley (D)
(406) 404-0891
Sen. Greg Hertz (R)
(406) 253-9505
Sen. Brian Hoven (R)
(406) 761-8533
Rep. Connie Keogh (D)
(406) 298-0985
Sen. Mike Lang (R)
(406) 654-7357
Sen. Edie McClafferty (D)
(406) 490-5873
Sen. Shannon O'Brien (D)
(406) 274-3805
Rep. Mark Thane (D)
(406) 552-3957
Rep. Jeremy Trebas (R)
(406) 899-5445
Rep. Tom Welch (R)
(406) 660-2988
Committee Staff:
Megan Moore, Lead Staff
megan.moore@legmt.gov
Jaret Coles, Attorney
jaret.coles@legmt.gov
Brochure Design:
Laura Sherley, Research Assistant
Data Visualizations:
Dan Kayser, Data Analyst
RESIDENTIAL
PROPERTY TAX
Revenue Interim Committee
HJ 36 Residential Property Tax Study
September 2022
https://leg.mt.gov/committees/interim/ric/
