House Bill No. 591
Introduced By _______________________________________________________________________________
A Bill for an Act entitled: "An Act reforming, streamlining, and simplifying the application for the elderly homeowner property tax credit by providing for a deduction based on property taxes levied and a standard pension deduction; amending sections 15-30-171, 15-30-172, 15-30-176, 15-30-177, and 15-30-178, MCA; and providing an immediate effective date and a retroactive applicability date."
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 15-30-171, MCA, is amended to read:
"15-30-171. Residential property tax credit for elderly -- definitions. As used in 15-30-171 through 15-30-179, the following definitions apply:
(1) "Claim period" means the tax year for individuals required to file Montana individual income tax returns and the calendar year for individuals not required to file returns.
(2) "Claimant" means
an individual natural a person who is eligible to file a claim under 15-30-172.
(3) "Department" means the department of revenue.
(4) "Gross household income" means all income received by all individuals of a household while they are members of the household.
(5) "Gross rent" means the total rent in cash or its equivalent actually paid during the claim period by the renter or lessee for the right of occupancy of the homestead pursuant to an arm's-length transaction with the landlord.
(6) "Homestead" means:
(a) a single-family dwelling or unit of a multiple-unit dwelling that is subject to
ad valorem property taxes in Montana and
as much of the surrounding land, but not in excess of 1 acre, as is reasonably necessary for its use as a dwelling; or
(b) a single-family dwelling or unit of a multiple-unit dwelling that is rented from a county or municipal housing authority as provided in Title 7, chapter 15.
(7) "Household" means an association of persons who live in the same dwelling, sharing its furnishings, facilities, accommodations, and expenses. The term does not include bona fide lessees, tenants, or roomers and boarders on contract.
(8) "Household income" means
$0 or the amount obtained by subtracting the greater of $4,000 or 50% of total retirement
benefits $6,300 from gross household income , whichever is greater.
(9) "Income" means federal adjusted gross income, without regard to loss, as that quantity is defined in the Internal Revenue Code of the United States, plus all nontaxable income, including but not limited to:
(a) the gross amount of any pension or annuity,
(including Railroad Retirement Act benefits and veterans' disability
(b) the amount of capital gains excluded from adjusted gross income;
(d) support money;
(e) nontaxable strike benefits;
(f) cash public assistance and relief;
(g) payments and interest on federal, state, county, and municipal bonds; and
(h) all payments received under federal social security except social security income paid directly to a nursing home.
(10) "Property tax
paid" assessed" means general ad valorem the product of 0.9 times the property taxes levied against the
homestead, exclusive of including special assessments , but excluding penalties , or interest and paid during the claim period.
(11) "Rent-equivalent tax paid" means 15% of the gross rent."
Section 2. Section 15-30-172, MCA, is amended to read:
"15-30-172. Residential property tax credit for elderly -- eligibility. (1) In order to be eligible to make a claim under 15-30-171 through 15-30-179, an individual:
(a) must have reached age 62 or older during the claim period for which relief is sought;
(b) must have resided in Montana for at least 9 months of that period;
(c) must have occupied one or more dwellings in Montana as an owner, renter, or lessee for at least 6 months of the claim period; and
(d) must have less than $35,000 of gross household income.
(2) A person is not disqualified as a claimant if the person changes residences during the claim period, provided that
person occupies one or more dwellings in Montana as an owner, renter, or lessee for at least 6 months during the claim
Section 3. Section 15-30-176, MCA, is amended to read:
"15-30-176. Residential property tax credit for elderly -- computation of relief. The amount of the tax credit granted under the provisions of 15-30-171 through 15-30-179 is computed as follows:
(1) In the case of a claimant who owns the homestead for which a claim is made, the credit is the amount of property tax
paid assessed less the deduction specified in subsection (4).
(2) In the case of a claimant who rents the homestead for which a claim is made, the credit is the amount of rent-equivalent tax paid less the deduction specified in subsection (4).
(3) In the case of a claimant who both owns and rents the homestead for which a claim is made, the credit is:
(a) the amount of property tax
paid assessed on the owned portion of the homestead less the deduction specified in
subsection (4); plus
(b) the amount of rent-equivalent tax paid on the rented portion of the homestead less the deduction specified in subsection (4).
(4) Property tax
paid assessed and rent-equivalent tax paid are reduced according to the following schedule:
Household income Amount of reduction
$ 0-999 $0
2,000-2,999 the product of.006 times the household income
3,000-3,999 the product of.016 times the household income
4,000-4,999 the product of.024 times the household income
5,000-5,999 the product of.028 times the household income
6,000-6,999 the product of.032 times the household income
7,000-7,999 the product of.035 times the household income
8,000-8,999 the product of.039 times the household income
9,000-9,999 the product of.042 times the household income
10,000-10,999 the product of.045 times the household income
11,000-11,999 the product of.048 times the household income
12,000 & over the product of.050 times the household income
In no case may the The credit granted may not exceed $1,000."
Section 4. Section 15-30-177, MCA, is amended to read:
"15-30-177. Residential property tax credit for elderly -- limitations. (1) Only one claimant per household in a claim period under the provisions of 15-30-171 through 15-30-179 is entitled to relief.
(2) Except as provided in subsection (3),
no a claim for relief may not be allowed for any portion of property taxes paid
assessed or rent-equivalent taxes paid that is derived from a public rent or tax subsidy program.
(3) Except for dwellings rented from a county or municipal housing authority,
no a claim for relief may not be allowed on
rented lands or rented dwellings that are not subject to ad valorem taxation in Montana property taxes during the claim
Section 5. Section 15-30-178, MCA, is amended to read:
"15-30-178. Residential property tax credit for elderly -- proof of claim. A receipt showing property tax
or a receipt showing gross rent paid, whichever is appropriate, must be filed with each claim. In addition, each claimant
must shall, at the request of the department, supply all additional information necessary to support his a claim."
NEW SECTION. Section 6. Retroactive applicability. [Sections 1 and 4] apply retroactively, within the meaning of 1-2-109, to tax years beginning after December 31, 1996.
NEW SECTION. Section 7. Effective date. [This act] is effective on passage and approval.