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Department of Revenue talks taxes at Ophir School

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The Montana Department of Revenue held an informational meeting about recent property tax assessments on Thursday night at Ophir School to educate Big Sky residents and answer questions on property tax assessment appraisals. 

The meeting was led by Pam Moore, from the Department of Revenue’s Gallatin County office, and a representative from the Madison County DOR, who presented on the strategies and procedures the DOR uses to value properties. They also discussed what that means towards the actual amount Big Sky residents should expect to pay in property taxes this year. 

The presentation described the three ways that the department uses to value the property: the cost approach, sales approach and income approach. 

The sales approach uses the sale price of similar properties and properties in the same neighborhood, while the income approach applies to commercial properties and includes business revenue and or rental profit potential. The cost approach is used in special circumstances when there is insufficient sales information or properties with atypical structures or features. 

Learn how Montana Department of Revenue calculates property tax here. 

After the presentation, the question and answer portion of the meeting indicated that more communication between legislators and constituents will be necessary moving forward. 

“One of the main points we want to get across is that the Department of Revenue is responsible for appraisals and that the Legislature determines the tax rates and exemptions while the local government determines mill rates, special fees and charges,” Moore stressed. 

This left some Big Sky area residents in attendance irritated. “Where are our legislators or any local officials tonight?” one attendee asked in mild frustration.

One main concern:  how it is possible to build a case against alleged overvalued appraisals, considering Montana’s confidentiality law for real estate sales?

“Just to be clear, we have to pay a realtor in order to get the information about sales in our area so that we can appeal our appraisal?” another Big Sky resident asked. 

This question led to the DOR stressing that property owners should appeal for a reappraisal with the DOR before going to a realtor. Appeals must be made using form AB-26, due 30 days after notice was received by mail.

The public can call (406) 444-6900 or submit an online contact form to get in touch with their local DOR office.  

Attendees were eager to ask about buyers paying a premium for potential short-term rental properties such as Vrbo and Airbnb. The properties, one attendee argued, are outliers in certain neighborhoods leaving potential for overestimates on non-short-term rental properties.

The DOR representatives were unable to answer this question, claiming they have no way of adjusting for short-term rentals under current legislation. 

The meeting concluded with a number of appraisers making themselves available to look at individual forms and providing details on the appeals process. 

The DOR suggested that communicating with legislators to discuss property tax policy in the state—and what appraisal requirements will look like in 2024—may be the best next step for Big Sky residents. 

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