Cookouts, camping and property taxes?!
By Daniel Bierschwale EBS COLUMNIST
As the days warm, we find ourselves outside a lot. For some that’s time spent cooking out or camping on a property you may pay taxes on. In our ongoing civic engagement column, it seems timely to explore the property appraisal notices recently distributed throughout Montana. While it’s easy to confuse these notices with property tax bills, they in fact are not one and the same.
The appraisal notices went out to alert you that the current market value of your property had changed. Plain and simple. The notices then estimate what your property taxes would be based on the prior year’s millage rate. However, this year’s millage rate has not yet been determined.
It’s no secret that many government services are paid for through property taxes. The methodology by which those taxes are calculated can be overwhelming to say the least. Residential, commercial, industrial, agricultural and forest property are all calculated differently, which adds to the confusion.
The Department of Revenue (DOR) is required by law to determine the market value of all residential, commercial and industrial real property every two years. Many of you will find these appraisals reflecting the current market value as of January 1, 2022, have increased dramatically, which has the potential of leading to a larger property tax bill.
That said, local governments use a fairly complicated process to calculate your property taxes. It starts with the DOR assessed value multiplied by your property class rate – Big Sky is predominantly residential and commercial. This calculation formulates taxable value – the value basis used when factoring mills.
* Your property may be subject to local government’s special assessments and fees in addition to the general taxes. COURTESY OF BSRAD
We may see some increase in property taxes based on the newly calculated taxable value, but it’s going to take some time to determine what exactly that looks like and here is why:
The final DOR valuations are sent to the respective county treasurer in early August. Local governments establish their budgets and then set their mill levies based on these taxable values. Then they can begin the process of assembling the tax bill, which will take a few months.
State law has limitations on budgets and mill levy increases for local governments including counties, school districts and cities. If the mill value goes up, the amount of mills the local governments can levy goes down proportionately. They can only raise the total tax impact for general operating mills by half the rate of inflation for the prior three years.
Get engaged – learn more from DOR
There has been some confusion about the assessment notices leading to a flood of questions directed towards county treasurers. Let’s help Madison and Gallatin counties by directing assessment notice questions to the appropriate entity – DOR. If you are looking to dive deeper into this topic, the Property Assessment Division of DOR is hosting a series of in-person town halls in communities across Gallatin and Madison counties this month. Residents are encouraged to attend any of the DOR town halls at the following locations (Big Sky is July 13):
- July 10 – Manhattan Town Hall (207 S. Sixth St.) – 4-8 PM
- July 12 – Gallatin County Courthouse (311 W. Main St., Bozeman) – 12-4 PM
- July 13 – Ophir School Gym (45465 Gallatin Rd., Big Sky) – 5-8 PM
- July 18 – Belgrade City Council Chambers (91 E. Central Ave.) – 5-9 PM
- July 19 – Ennis High School (223 Charles Ave, Ennis) – 5-9 PM
- July 19 – West Yellowstone Town Hall (440 Yellowstone Ave.) – 1-5 PM
- July 20 – Bozeman Public Safety Center Community Room (901 N. Rouse Ave.) – 5-9 PM
- July 20 – Sheridan High School (107 Madison St, Sheridan) – 5-9 PM
- July 26 – Three Forks City Hall (206 S. Main St.) – 5-9 PM
There are also virtual options on July 6, July 12, July 17 and July 25 – see full schedule and get links at the DOR website. Lastly, property owners can request informal reviews and file formal appeals. The processes for those are lined out on this page (below the “Understanding Your Notice” section).
Primary homes receive some relief
On a related note, two house bills were signed into law to provide tax rebates for eligible Montana taxpayers. House Bills 222 and 816 provide a rebate for property taxes paid in tax years 2022 and 2023.
The new laws provide a rebate of up to $675 a year on property taxes paid towards a principal residence. Each rebate is only available to taxpayers who were billed and paid Montana property taxes in each year. To qualify, during each year, you must have:
- owned a Montana residence for at least seven months,
- lived in that Montana residence for at least seven months,
- had property taxes, including special assessments and other fees, billed on that residence, and
- paid those property taxes on that residence.
As you are soaking up the sun this summer grilling a burger on your porch, it’s also a good time to soak up some details on the taxes you pay, including those for the backyard where you’re hosting the barbecue.
Daniel Bierschwale is the Executive Director of the Big Sky Resort Area District (BSRAD). As a dedicated public servant, he is committed to increasing civic engagement and voter education. Many ballot issues impact government services and public funding including subsequent property tax impacts. BSRAD is the local government agency that administers Resort Tax, which offsets property taxes while also funding numerous community-wide nonprofit programs.
