Text/HTML

Tax Relief and Assistance for Loss Due to Natural Disaster, Including Fires, Floods and Drought


Property Tax Relief

The Department of Revenue expresses sincere sympathy to those Montanans whose homes, lands and other property have been damaged or destroyed by a natural disaster. Please let us help. If you are a Montana property owner who has experienced a loss of your dwelling, other buildings, or forestland due to a natural disaster, you may be eligible for property tax relief or an income tax filing extension.

We can provide you with necessary information, as well as issue replacement copies of property records, past-year tax returns or other revenue-related information.

Eligible Properties

Real property dwellings - All or partially destroyed
Real property improvements (such as garages, sheds, barns and grain bins) - All or partially destroyed
Manufactured housing and mobile homes - All or partially destroyed
Business equipment - All or partially destroyed

The property must have been rendered unsuitable for its previous use to qualify for property tax relief. The relief is prorated based on the number of days in the current tax year that the property was unsuitable for its previous use. 

You can apply by completing a Natural Disaster Application (Form AB-25). This application is also available in all Department of Revenue local offices. Simply call your local office to have a form mailed to you.  If needed, your local Department of Revenue office can provide you with necessary property information to complete the form.  
 

Eligible Lands

Forest lands impacted by a natural disaster to such an extent the lands do not meet the minimum stocking requirements, the landowner may file for property tax relief. The landowner must show that the stocking rate of the lands has been reduced below the minimum requirements. This adjustment results in a 50% reduction in forest productivity value for 20 years from the date of the disaster. The first reduction is available the year following the disaster event.

You can apply by completing a Form AB-26This application is also available in all Department of Revenue local offices. Simply call your local office to have a form mailed to you.  If needed, your local Department of Revenue office can provide you with necessary property information to complete the form. 

Federal Income Tax Deduction

Property owners may also be eligible for a federal income tax casualty loss deduction on Schedule A, Itemized Deductions. The same Form 4684, Casualties and Thefts, is required for both the Montana state return and the federal Form 1040. Additional information is available by visiting the Internal Revenue Service website, and typing "Tax Topic 507" in the search box.

Business and Income Tax - Late File and Late Payment Relief

General Information

The Montana Department of Revenue follows the Internal Revenue Service’s (IRS) guidelines for disaster tax relief. Montana allows the same tax relief as the IRS for delays in reporting, filing, or paying taxes due to a federal declared disaster.

Who Qualifies for Tax Relief

The following individuals or businesses may qualify for disaster area tax relief:

•    Individuals and businesses affected by this summer’s wildfires in Montana.

•    Individuals who lived and businesses that operated in a federally declared disaster area during the time of a disaster.

•    Individuals and businesses with tax or business records lost or damaged because the records were with accountants, bookkeepers or other third parties located in a disaster area during the time of a disaster.

What to Do if You Qualify for Tax Relief

Taxpayers that qualify for tax relief can do any of the following:

•    If you are filing or paying your taxes using a paper return, payment coupon or check, write the type of disaster in bold red letters on the top of your documents.

•    If you previously filed electronically and have received a billing notice, write the type of disaster in bold red letters across the top of the notice.

•    Send a letter to the Montana Department of Revenue including the tax period, tax account number, tax type, type of disaster and a statement that you qualify for tax relief because of a federally declared disaster.

Additional Information

IRS disaster relief listed by state

IRS disaster assistance and emergency relief for individuals and businesses

Requesting copies of prior year Montana tax returns


 Text/HTML

Flooding


If you have experienced property loss or damage because of a flood, you may be eligible for property tax relief.  The Montana Department of Revenue is here to assist you.

Property Tax Relief Information

Property tax relief is available to property owners who have experienced partial or complete property loss or damage due to a flood. In general, this means that the property has been rendered unsuitable for its previous use. Eligible properties include these types:

Real property dwellings - all or partially destroyed
Real property improvements (such as garages, sheds, barns, and grain bins) - all or partially destroyed
Manufactured housing / mobile homes - all or partially destroyed
Business equipment - all or partially destroyed

The property must have been rendered unsuitable for its previous use to qualify for property tax relief. The tax relief is prorated based upon the number of days in the current tax year that the property was unsuitable for its previous use. 

To apply for property tax relief, please follow these steps:

1. Obtain a Natural Disaster Application (Form AB-25). This application is also available in all Department of Revenue local offices, and you may call your local office to have a form mailed to you.
2. Complete the application. If needed, your local Department of Revenue office can provide you with necessary property information to complete the form.
3. You can work with your local Department of Revenue office when the appraiser contacts you to review your property’s damage.

The department can also assist you by issuing replacement copies of your property record, past-year tax returns or other revenue-related information that may have been lost or damaged.

Questions

If you have questions, we’re here to help:

Contact your local Department of Revenue office.
Local Department of Revenue office addresses and phone numbers


 Text/HTML

Wildfire Disasters


If you have experienced property loss or damage because of a wildfire, you may be eligible for property tax relief. The Montana Department of Revenue is here to assist you.

Property Tax Relief Information

Property tax relief is available to property owners who have experienced partial or complete property loss or damage due to wildfire. In general, this means that the property has been rendered unsuitable for its previous use. Eligible properties include these types:

Real property dwellings - all or partially destroyed
Real property improvements (such as garages, sheds, barns, and grain bins) - all or partially destroyed
Manufactured housing / mobile homes - all or partially destroyed
Business equipment  - all or partially destroyed
Commercial timber abatement for forestland property

The property must have been rendered unsuitable for its previous use to qualify for property tax relief. The tax relief is prorated based upon the number of days in the current tax year that the property was unsuitable for its previous use. 

To apply for property tax relief, please follow these steps:
1. Obtain a Natural Disaster Application (Form AB-25). This application is also available in all Department of Revenue local offices, and you may call your local office to have a form mailed to you.
2. Complete the application. If needed, your local Department of Revenue office can provide you with necessary property information to complete the form.
3. You can work with your local Department of Revenue office when the appraiser contacts you to review your property’s damage.

In addition, property tax relief is available for commercial timber on forestland that has been destroyed by wildfire to the point that minimum stocking requirements are no longer met. To apply, complete an Informal Request for Review (Form AB-26). If approved, eligible properties receive a 50 percent reduction in assessed value for 20 years from the date of the disaster beginning the first full tax year following the natural disaster.

The department can also assist you by issuing replacement copies of your property record, past-year tax returns or other revenue-related information that may have been lost or damaged.

Questions

If you have questions, we’re here to help:

Contact your local Department of Revenue office.
Local Department of Revenue office addresses and phone numbers


 Text/HTML

Natural Disaster Property Tax Reduction FAQ's


Real Property Dwellings, Real Property Improvements, Trailers and Mobile Homes and Personal Property


Q. What is included in the term "natural disaster"?

A. Section 15-16-611(6), MCA, states that "natural disaster" includes, but is not limited to, fire, flood, earthquake, or wind.  A fire is considered a natural disaster regardless of the origin of the fire.  However, if the taxpayer is convicted of arson for burning the property, property taxes may not be adjusted.  If the taxes had already been adjusted prior to the conviction, the original amount must be collected.

Section 15-44-104(1), MCA, states forest lands upon which, at any time after December 31, 1993, trees are destroyed by fire, disease, insect infestation, or other natural disaster so that the lands affected will not meet minimum stocking requirements are eligible for a reduction in value for the first 20 tax years following the loss.


Q. Which section of law provides for the reduction of property tax for the total or partial destruction, by natural disaster, or real property dwellings, real property improvements, trailers and mobile homes, and personal property?

A. Section 15-16-611 and 15-44-104, MCA


Q. What types of property are included in term "real property improvements"?

A. The term includes dwellings and outbuildings on residential, agricultural, or forest land, and commercial/industrial buildings and structures.


Q. To what extent must the destruction demonstrate the affected properties are eligible for the reduction allowed in 15-16-611, MCA?

A. To be eligible for the reduction, the property must have been rendered unsuitable for its previous use by the natural disaster.

Definitions used by the department in determining natural disaster tax relief eligibility:

Partial Destruction means a portion of the structure(s) or personal property has been made uninhabitable or has been rendered unusable or unsuitable for its previous use; the repair is not immediately accessible for repairing or replacement. This does not include replacement or cleanup of items which are short term or an inconvenience.
Total Destruction means the entire structure(s) or personal property has been made uninhabitable or has been rendered completely unusable or unsuitable for its previous use, including a state beyond use or repair.
Uninhabitable means not capable of being lived-in due to long term damage or destruction of the property, typically determined by health department officials, fire inspectors or building inspectors and may result n the condemnation of the property.
Unsuitable for previous use means the use the property is intended for no longer can be utilized or is not appropriate,suitable or fit for that use. Not to be confused with an inconvenience or non-desirable.


Q. Is there an application deadline for this reduction?

A. No, there is no specific deadline for filing an application for  these types of losses. However, the application must be filed during the current tax year.


Q. How is the reduction in taxes calculated for destroyed real property dwellings, real property improvements, trailers and mobile homes and personal property?

A. The amount or reduction for destroyed real property dwellings, real property improvements, and trailers and mobile homes is based on a pro-ration of the taxes. It is calculated by determining a ratio of the number of days the property was impacted by natural disaster in the tax year, divided by 365.

The amount of reduction for destroyed personal property is also based on a proration of the taxes. It is calculated by determining a ratio of the number of days the property was impacted by natural disaster in the tax year, divided by 365. To enable the proration calculation, the taxpayer is required to notify the department if the personal property is replaced in that same year.  If a taxpayer fails to notify the department within 30 days from the date of the replacement of the personal property, they are subject to the penalty provided in 15-1-303, MCA. (This allows for the department to add to the assessment an amount not to exceed 20% of the assessment as a penalty for the refusal or neglect.)


Q. If the property structure or business equipment is destroyed after the property taxes have been paid for the current year, am I entitled to a refund?

A. Yes, the taxpayer is entitled to a refund of the amount of tax paid as indicated in Step 3(c) on the application form. Section 15-16-612, MCA allows for the refund.