Montana Tax Protests : a Signal of Unfair Taxation

The following article was written by Nancy Schlepp President, Montana Taxpayers Association

Recently in a Billings Gazette article, Governor Schweitzer indicated centrally assessed companies were preparing to float legislation that would cut their property taxes in half.

This is interesting since no bill on this subject has been brought forward or proposed to the Revenue and Transportation Interim Committee (RTIC) as alleged. Unfortunately, the Governor must have been misinformed by the Department of Revenue (DOR); we are confused as to what the DOR may be referring to.

However, we do believe that there is a very serious issue here and with all this smoke, there must be fire. For taxes in Montana to be at such a level to evoke protests, there is something fueling the flames. This something is the unfettered discrimination of property tax values by DOR that has many Montana businesses experiencing significant increases in their property taxes.

In many instances DOR is going beyond statutory and rule making authority to, as one member of RTIC said at the July meeting, “maximize revenue”. The unfortunate result of this is that sometimes the statute is not the problem; interpretation of the law by the DOR is a greater problem than the statute itself.

In the letters to RTIC mentioned by the Governor, one in particular by the Yellowstone County Commissioners stated they are, “increasingly concerned with the amount of protested taxes that are currently being held in escrow. When this money is in limbo, it is difficult to budget and plan for the years ahead.”

We agree there is a problem. The commissioners and business community are raising legitimate issues. They and others, like the Montana Taxpayers Association, are trying to set the table to have a meaningful discussion about a serious matter. That is why we supported RTIC studying the issue of central and industrial assessment, SJR17. To ignore these issues instead of sitting down at the table to address them is shortsighted.

Senator Essmann was correct when he stated that Montana is seeing a significant increase in protested taxes across the board. This is due to the rules constantly changing and arbitrary discretion by DOR which has resulted in assessment creep. This is not the experience of just centrally assessed and industrial facilities either; other classes of property are also experiencing the effects of an over-aggressive DOR. The business community in Montana undeservingly is under attack.

Who really loses? The answer is: the twice paying public, who experience both higher rates to pay for the inflated increase in taxes and the unpredictable funding for local government and schools. It is time to put this fire out. It’s a matter of fairness which all taxpayers – large or small, expect.