Bill > SB117

This bill introduces several key changes to property tax regulations for local governments in Montana. It allows cities, counties, and consolidated city-counties to establish a "large taxpayer reserve account" where they must deposit 10% of revenue from newly taxable property (excluding class four property). A "large taxpayer" is defined as an individual or entity among the top 20% of taxpayers by taxable value in that jurisdiction. The funds in this account can only be used if a large taxpayer permanently ceases operations or experiences a significant decrease in taxable value (defined as a 25% or more reduction). When such circumstances occur, the funds can be used to pay outstanding bonds, decrease mill levies, attract new industry, provide employment incentives, or invest in infrastructure. The bill also modifies how governmental entities calculate property tax levies by increasing the inflation limitation to not exceed 4% (previously one-half of the average inflation rate) and adjusting how newly taxable property is incorporated into levy calculations. Specifically, governmental entities can now include different percentages of newly taxable property in their levy calculations: 100% for certain abated properties, 50% if they create a large taxpayer reserve account, or 40% if they do not. These changes will apply to property tax years beginning after December 31, 2025.

Budget and Finance

https://bills.legmt.gov/#/laws/bill/2/LC0004