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HOUSE BILL NO. 137
INTRODUCED BY S. ANDERSON
BY REQUEST OF THE DEPARTMENT OF REVENUE
AN ACT ESTABLISHING NEW PROCEDURES FOR RESOLVING DISPUTES BETWEEN THE DEPARTMENT OF REVENUE AND PERSONS OR OTHER ENTITIES; PROVIDING FOR AN OFFICE OF DISPUTE RESOLUTION WITHIN THE DEPARTMENT OF REVENUE; PROVIDING THAT THE DEPARTMENT SHALL BY RULE IMPLEMENT THE NEW UNIFORM DISPUTE REVIEW PROCEDURE; AMENDING SECTIONS 15-1-211, 15-1-406, 15-23-102, 15-23-107, AND 39-51-1109, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE AND AN APPLICABILITY DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 15-1-211, MCA, is amended to read:
tax dispute review procedure -- notice -- appeal. (1) The department of revenue shall provide a
uniform tax review procedure for all taxpayers persons or other entities, except as provided in subsection (1)(a).
tax department's dispute review procedure described in this section must be adopted by administrative rule and
applies to all taxes matters administered by the department and to all issues arising from the administration of taxes the
department, except inheritance taxes, estate taxes, property taxes, and the issue of whether an employer-employee
relationship existed between the taxpayer person or other entity and individuals subjecting the taxpayer person or other
entity to the requirements of chapter 30, part 2, or whether the employment relationship was that of an independent
contractor. The procedure applies to any revised assessment of centrally assessed property taxed pursuant to chapter 23. The
procedure applies to assessments of centrally assessed property taxed pursuant to chapter 23.
(b) (i) The term
"taxpayers" "other entity", as used in this section, includes all persons determined by the department to
have a potential tax liability businesses, corporations, and similar enterprises.
(ii) The term "person" as used in this section includes all individuals.
(2) (a) If the department determines that a request for a refund should be denied in whole or part, it shall notify the
taxpayer of the determination. If the department determines that a person has failed to pay a sufficient tax, interest, or
penalty, it shall provide the taxpayer with notice. The notice stops the running of any applicable statute of limitations
regarding the assessment of the tax. (b) A notice under this section must clearly state: (i) the reasons for the department's determination that a refund is not due or that tax plus interest and penalty, if any, are
due; (ii) the taxpayer's right to a review by the department, the taxpayer's right to appeal after a final department decision, and
the taxpayer's right to a review of determinations by the department of labor and industry and board of labor appeals of
whether an employer-employee relationship existed between the taxpayer and certain individuals or whether the
employment relationship was that of an independent contractor; (iii) failure to notify the department within 30 days will result in a forfeiture of the taxpayer's right to contest the
department's determination under this section or to file an appeal with the state tax appeal board; (iv) that the taxpayer has 30 days to either notify the department in writing that the taxpayer does not agree with an
assessment or pay the amount assessed; (v) that a warrant for distraint placing a lien on the taxpayer's property may be issued unless the taxpayer notifies the
department that the taxpayer disagrees with an assessment or pays within 30 days; and (vi) that the notice stops the running of the statute of limitations regarding the assessment of the tax.
(2) (a) Persons or other entities having a dispute with the department have the right to have the dispute resolved by appropriate means, including consideration of alternative dispute resolution procedures such as mediation.
(b) The department shall establish a dispute resolution office to resolve disputes between the department and persons or other entities.
(c) Disputes must be resolved by a final department decision within 180 days of the referral to the dispute resolution office, unless extended by mutual consent of the parties. If a final department decision is not issued within the required time period, the remedy is an appeal to the appropriate forum as provided by law.
(3)(a) A taxpayer shall notify the department, in writing, that the taxpayer objects to the determination within 30 days
from the date that the notice is mailed. The notification by the taxpayer is not required to specify the reasons for the
disagreement or be in any particular form unless the taxpayer is objecting to a determination that an employer-employee
relationship existed between the taxpayer and individuals, subjecting the taxpayer to the requirements of chapter 30, part 2.
If the taxpayer does not notify the department within 30 days: (i) an assessment becomes final and the assessed tax, plus any interest and penalty, must be paid; (ii) the taxpayer waives any further right to review under this section or to appeal to the state tax appeal board; and (iii) a warrant for distraint may be issued without further opportunity to be heard on the assessment. (b) (i) A taxpayer who notifies the department pursuant to subsection (3)(a) that the taxpayer disagrees with a tax
assessment shall present the objections, the reasons for the objections, and any other information to the administrator of the
division that administers the tax or to the administrator's designee within 60 days after the notice referred to in subsection
(3)(a) is mailed. The reasons for objections may be provided in writing, by telephone, or, if requested by the taxpayer, at an
informal conference. An informal conference is not subject to the Montana Administrative Procedure Act. (ii) An objection received by the department pursuant to subsection (3)(a) stating that the taxpayer disagrees with the
department's determination that an employer-employee relationship existed between the taxpayer and certain individuals,
subjecting the taxpayer to the requirements of chapter 30, part 2, must be referred to the department of labor and industry
for appeal procedures pursuant to 39-51-2402 and 39-51-2410. (c) Within 60 days after the taxpayer has presented the taxpayer's objections, as provided in subsection (3)(b), the
administrator or a designee shall issue a written decision addressing the taxpayer's objections and describing the reasons for
the determination. The administrator's decision must also clearly set forth the taxpayer's review rights. The administrator's
decision must be provided to the taxpayer and the director of revenue.
(3) (a) The department shall provide written notice to a person or other entity advising them of a dispute over matters administered by the department.
(b) The person or other entity shall have the opportunity to resolve the dispute with the department employee who is responsible for the notice, as indicated on the notice.
(c) If the dispute cannot be resolved, either the department or the other party may refer the dispute to the dispute resolution office.
(d) The notice must advise the person or other entity of their opportunity to resolve the dispute with the person responsible for the notice and their right to refer the dispute to the dispute resolution office.
(4) Written notice must be sent to the persons or other entities involved in a dispute with the department indicating that the matter has been referred to the dispute resolution office. The written notice must include:
(a) a summary of the department's position regarding the dispute;
(b) an explanation of the right to the resolution of the dispute with a clear description of all procedures and options available;
(c) the right to obtain a final department decision within 180 days of the date that the dispute was referred to the dispute resolution office;
(d) the right to appeal should the department fail to meet the required deadline for issuing a final department decision; and
(e) the right to have the department consider alternative dispute resolution methods, including mediation.
(5) The department shall:
(a) develop guidelines that must be followed by employees of the department in dispute resolution matters;
(b) develop policies concerning the authority of an employee to resolve disputes; and
(c) establish procedures for reviewing and approving disputes resolved by an employee or the dispute resolution office.
4) (a) A taxpayer shall notify the department in writing that the taxpayer objects to the administrator's decision within
30 days from the date that the decision is mailed, or the taxpayer may appeal to the state tax appeal board as provided in
subsection (6). If an objection is not made within 30 days, the administrator's decision and any assessment become final. By
failing to object, the taxpayer waives any further right to review or appeal and a warrant for distraint may be issued without
further opportunity to be heard on the assessment. (b) Except as provided in subsection (6), a taxpayer who objects to the administrator's decision pursuant to subsection
(4)(a) shall present the taxpayer's objections, the reasons for the objections, and any other information to the director of
revenue or the director's designee within 60 days after the notice referred to in subsection (4)(a) is mailed. The director or
the designee may consider written information, hold a telephone conference, or conduct an informal conference, none of
which are subject to the Montana Administrative Procedure Act. (c) Within 60 days after the taxpayer has presented the objections, the director or the designee shall issue a written
decision addressing the objections and describing the reasons for the decision. The director's decision is the final decision
and assessment of the department. (5) The taxpayer shall pay the assessment within 30 days after being mailed a copy of the final decision and assessment
unless an appeal is filed with the state tax appeal board. If an appeal with the board is filed within 30 days after the final
decision is mailed, payment is not due until final resolution by the board or, if further appeals are filed, by the appropriate
court. However, any interest required by law must continue to accrue. (6) (a) A taxpayer who validly objects to the administrator's decision may elect to file an appeal with the state tax
appeal board. The appeal must be filed within 30 days after mailing an objection to the administrator's decision. If an appeal
is filed, the administrator's decision is the final decision of the department. (b) If the director notifies the board within 30 days after an appeal is filed that the director has not had an opportunity to
review the administrator's decision and the director believes that a review may be helpful in resolving the controversy, the
board shall stay the appeal for a time that the board considers reasonable, not to exceed 90 days except by the mutual
consent of both parties. The taxpayer shall provide the taxpayer's objections and reasons for the objections to the director so
that the director or the director's designee may review the controversy and issue a decision within the period of the stay
granted by the board. If the taxpayer is dissatisfied with the director's decision, the stay must be lifted and the appeal
resumed. (7) The time limits in this section must be applied and interpreted as provided in Rule 6 of the Montana Rules of Civil
Procedure, including additional time for mailing. Any time limit may be extended by mutual consent of the department and
the taxpayer. The department shall consent to all reasonable requests for extension of deadlines. (8) (a)(6) (a) The director of revenue or the director's designee is authorized to enter into an agreement with any
taxpayer a person or other entity relating to the taxpayer's liability with respect to a tax matter administered by the
department for any taxable period.
(b) An agreement under the provisions of subsection
(8)(a) (4) is final and conclusive, and, except upon a showing of
fraud, malfeasance, or misrepresentation of a material fact:
(i) the agreement may not be reopened as to matters agreed upon or be modified by any officer, employee, or agent of this state; and
(ii) in any suit, action, or proceeding under the agreement or any determination, assessment, collection, payment, abatement, refund, or credit made in accordance with the agreement, the agreement may not be annulled, modified, set aside, or disregarded."
Section 2. Section 15-1-406, MCA, is amended to read:
"15-1-406. Declaratory judgment. (1) An aggrieved taxpayer may bring a declaratory judgment action in the district court seeking a declaration that:
(a) an administrative rule or method or procedure of assessment or imposition of tax adopted or used by the department of revenue is illegal or improper; or
(b) a tax authorized by the state or one of its subdivisions was illegally or unlawfully imposed or exceeded the taxing authority of the entity imposing the tax.
(2) The action must be brought within 90 days of the date the notice of the tax due was sent to the taxpayer or, in the
case of an assessment covered by the uniform
tax dispute review procedure set forth in 15-1-211, within 90 days of the date
of the department director's final decision. The court shall consolidate all actions brought under subsection (1) that
challenge the same tax. The decision of the court applies to all similarly situated taxpayers, except those taxpayers who are
excluded under 15-1-407.
(3) The taxes that are being challenged under this section must be paid under protest when due as a condition of
continuing the action. Property taxes are paid under protest as provided in 15-1-402. All other taxes administered by the
department, except inheritance and estate taxes, are paid under protest by filing timely claims for refund and by following
tax dispute review procedures of 15-1-211. Inheritance and estate taxes are paid under protest by following the
procedures set forth in Title 72.
(4) The remedy authorized by this section may not be used to challenge the:
(a) market value of property under a property tax unless the challenge is to the legality of a particular methodology that is being applied to similarly situated taxpayers; or
(b) legality of a tax other than a property tax, inheritance tax, or estate tax unless the review pursuant to 15-1-211 has been completed.
(5) The remedy authorized by this section is the exclusive method of obtaining a declaratory judgment concerning a tax authorized by the state or one of its subdivisions. The remedy authorized by this section supersedes the Uniform Declaratory Judgments Act established in Title 27, chapter 8. This section does not affect actions for declaratory judgments under 2-4-506."
Section 3. Section 15-23-102, MCA, is amended to read:
"15-23-102. Independent appraisal option
-- notice of assessment -- opportunity for conference -- appeal. (1) The
department of revenue may have property subject to the provisions of this chapter assessed by a qualified independent
appraiser when both the department and the owner of the property subject to the assessment agree in writing:
(a) on a particular independent appraiser to do an appraisal;
(b) to share the costs of the independent appraisal; and
(c) to accept the results of the appraisal.
(2) (a) After assessing property under 15-23-101, the department shall notify the owner and any purchaser under
contract for deed of such property, in writing, of the assessed value it has determined. (b) Within 20 days following notification, the taxpayer may demand a review of the validity of the department's
assessment. The department shall conduct an assessment review conference, which is not subject to the contested case
procedures of the Montana Administrative Procedure Act. However, a party has the right of discovery prior to any
assessment revision review conference. Upon consideration following such conference, the department may revise the
assessment. (c) Appeals from the final decision may be taken to the state tax appeal board.
(2) Appeals from the decision of the department pursuant to 15-1-211 may be taken to the state tax appeal board."
Section 4. Section 15-23-107, MCA, is amended to read:
"15-23-107. Amended assessment. Whenever the valuation of centrally assessed property is revised under 15-8-601 or
(2), the department shall, within 15 days following the final decision or order, enter the revision in the property
tax record for each applicable county."
Section 5. Section 39-51-1109, MCA, is amended to read:
"39-51-1109. Tax appeals -- procedure. (1) A decision, determination, or redetermination of the department involving an employer-employee relationship or the charging of benefit payments to employers is final unless an interested party entitled to notification submits a written appeal of the decision, determination, or redetermination. The appeal must be made in the same manner as provided in 39-51-2402 for the appeal of a decision relating to a claim for unemployment insurance benefits. Statutory rules of evidence and civil procedure do not apply to a hearing on the appeal. A hearing may be conducted by telephone or by videoconference. The decision of the appeals referee and any subsequent appeal must be made in the same manner as prescribed in 39-51-2403 through 39-51-2410.
(2) A decision, determination, or redetermination involving contribution liability, contribution rate, application for
refund, subject wages, or other tax-related issues must be issued by the department of revenue as provided in Title 15,
chapter 1, part 2, and 15-30-257, if applicable. The decision is final unless an interested party entitled to notification follows
tax dispute review procedures as prescribed in 15-1-211 and 15-30-257, if applicable."
Section 6. Applicability. [This act] applies to disputes arising with the department after June 30, 1999.
Section 7. Effective date. [This act] is effective on passage and approval.
- END -
Latest Version of HB 137 (HB0137.ENR)
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