Senate Bill No. 127

Introduced By cole

By Request of the Department of Revenue

A Bill for an Act entitled: "An Act clarifying that the wholesale value of agricultural implements and machinery for property tax purposes is the average wholesale value; specifying the official guide to be used by the department of revenue in determining the average wholesale value of agricultural implements and machinery; requiring the department to use a comparable publication or wholesale value category in determining the wholesale value; amending section

15-8-111, 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 15-8-111, MCA, is amended to read:

"15-8-111.   Assessment -- market value standard -- exceptions. (1) All taxable property must be assessed at 100% of its market value except as otherwise provided.

(2)  (a) Market value is the value at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.

(b)  If the department uses construction cost as one approximation of market value, the department shall fully consider reduction in value caused by depreciation, whether through physical depreciation, functional obsolescence, or economic obsolescence.

(c)  Except as provided in subsection (3), the market value of all motor trucks; agricultural tools, implements, and machinery; and vehicles of all kinds is the average wholesale value shown in national appraisal guides and manuals or the value of the vehicle before reconditioning and profit margin. The department shall prepare valuation schedules showing the average wholesale value when a national appraisal guide does not exist.

(3)  The department may not adopt a lower or different standard of value from market value in making the official assessment and appraisal of the value of property, except:

(a)  the wholesale value for agricultural implements and machinery is the loan value average wholesale value category as shown in the Official Guide, Tractor and Farm Equipment, published by the national farm and power equipment dealers association North American equipment dealers association, St. Louis, Missouri;. If the guide or the average wholesale value category is unavailable, the department shall use a comparable publication or wholesale value category.

(b)  for agricultural implements and machinery not listed in the an official guide, the department shall prepare a supplemental manual in which the values reflect the same depreciation as those found in the official guide; and

(c)  as otherwise authorized in Title Titles 15 and Title 61.

(4)  For purposes of taxation, assessed value is the same as appraised value.

(5)  The taxable value for all property is the percentage of market or assessed value established for each class of property.

(6)  The assessed value of properties in 15-6-131 through 15-6-133 is as follows:

(a)  Properties in 15-6-131, under class one, are assessed at 100% of the annual net proceeds after deducting the expenses specified and allowed by 15-23-503 or, if applicable, as provided in 15-23-515, 15-23-516, 15-23-517, or 15-23-518.

(b)  Properties in 15-6-132, under class two, are assessed at 100% of the annual gross proceeds.

(c)  Properties in 15-6-133, under class three, are assessed at 100% of the productive capacity of the lands when valued for agricultural purposes. All lands that meet the qualifications of 15-7-202 are valued as agricultural lands for tax purposes.

(d)  Properties in 15-6-143, under class ten, are assessed at 100% of the forest productivity value of the land when valued as forest land.

(7)  Land and the improvements on the land are separately assessed when any of the following conditions occur:

(a)  ownership of the improvements is different from ownership of the land;

(b)  the taxpayer makes a written request; or

(c)  the land is outside an incorporated city or town."

NEW SECTION. Section 2.  Effective date -- retroactive applicability. [This act] is effective on passage and approval and applies retroactively, within the meaning of 1-2-109, to tax years beginning after December 31, 1996.