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Property Tax Allocation


In Montana, property taxes help pay for local government services such as schools, roads and bridges, as well as fire and police protection. Property owners support these services by paying property taxes as required by state law.

The following pie chart presents the allocation of property tax usage by taxing jurisdiction type for fiscal year 2015.
 

property-pie-chart

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Certification of Values

Detailed Certified Values For Each County
 

Every year, the Property Assessment Division provides the total taxable value of property to each taxing jurisdiction by the first Monday in August. The certified values include all classes of property within the boundaries of a taxing jurisdiction. These values are very important because the jurisdictions use them to calculate the amount of mills they can levy.
 

The formula for calculating mills involves increasing the prior year’s budget by one-half of the inflation from the previous three years. This is the new budget used to calculate the amount of mills. In order to find the number of mills needed, the new budget is divided by the current year’s certified taxable value and the result is multiplied by 1,000. If, for example, the prior year’s budget for a jurisdiction was $1 million, the previous three year’s inflation was 2% and the current year’s taxable value was $2 million, the calculation without newly taxable would be:
 

( ( 1,000,000 * ( 1 + ( .5 * .02 ) ) ) / 2,000,000 ) * 1,000 = 505 Maximum Mills
 

When we insert the newly taxable value into the formula, it will be subtracted from the current year’s taxable value. If the $2 million of taxable value included $100,000 of newly taxable value, the new maximum amount of mills would be:
 

 ( ( 1,000,000 * ( 1 + ( .5 * .02 ) ) ) / ( 2,000,000 – 100,000) ) * 1,000 = 531 Maximum Mills
 

The jurisdiction is now allowed to levy a maximum of 531 mills against the property within its boundaries.
 

The amount of annual taxes paid on property is equal to the taxable value of the property multiplied by the cumulative mills from all taxing jurisdictions in which the property resides.
 

Property Tax = Taxable Value x Jurisdiction Millage Rates


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Property Assessment Cycle


assessment-cycle

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Overview


Montana's 1972 State Constitution authorized the state to appraise, assess and equalize the valuation of all taxable property, in Montana. The Department of Revenue’s Property Assessment Division is responsible for ensuring uniform valuation of similar properties throughout the state.
 

While the department is constitutionally responsible for equalizing property, legislative policy directs the department’s valuation and assessment procedures. The legislature determines separate tax rates, exemptions and valuation standards as a matter of policy. The department applies these policies to the valuation of property when calculating taxable values.
 

The department has a field office in each county responsible for valuing all property except centrally assessed and large industrial properties. The Department of Revenue staff in each county field office works with the county treasurer's office to generate property tax information. The treasurer’s office in each county is responsible for sending out property tax bills and collecting taxes that pay for the services that property owners in their counties receive.