HELENA – The House Taxation Committee on Tuesday backed a bill to shorten the reappraisal cycle for certain classes of property, but voted to keep forest lands on a six-year cycle.
Forest industry representatives had urged the committee to amend those lands out of the proposed two-year reappraisal cycle.
The committee, on a 14-6 vote, supported an amendment by Rep. Kelly Flynn, R-Townsend, to keep forest lands on a six-year cycle instead of moving to a two-year cycle. Without the amendment, he said, Montana would be the only state where forest lands would be on a two-year cycle.
Then the panel voted 12-8 to endorse Senate Bill 157, by Sen. Bruce Tutvedt, R-Kalispell, and send it to the House floor for debate.
Rep. Greg Hertz, R-Polson, said he was unhappy over the fact that the House had just a few days to examine the complex bill.
“I’m quite upset the bill sat in the Senate for days (before moving to the House),” he said.
By shortening the reappraisal cycle for residential, commercial and agricultural property from six years to two years, state Revenue Mike Kadas said it would allow the department to focus on needed property tax simplification and transparency for taxpayers.
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What the bill would do would direct the Revenue Department to set new values for property in these three classes every two years rather than every six years. If property values go down, the lower values tax effect immediately, just as they do presently.
What the Legislature has done during recent cycles is phase in, over six years, the new value, the new tax rate and the homestead exemption deduction or commercial exemption deduction, called the comstead deduction. These three variables phased in over six years have been tools to mitigate the impact of rising property values, but some testified they have overly complicated Montana’s property tax system for taxpayers.
If his bill becomes law, Tutvedt said it would greatly simply property taxes in Montana.
Instead of having phase-ins, the new value of the property simply would be multiplied by the tax rate and then by the local and state property tax mils to calculate the property taxes owed.
An amendment by Hertz that was approved would require the Revenue Department, county tax appeal board or the State Tax Appeal board to consider an independent appraisal that was done for a property owner.
Revenue Director Mike Kadas had no objection, saying: “The amendment very closely mirrors current practice.”
The Montana Association of Realtors opposed switching the properties from any class to a two-year reappraisal cycle.