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Montana Administrative Register Notice 42-2-813 No. 20   10/29/2009    
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BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 42.21.113, 42.21.123, 42.21.125, 42.21.131, 42.21.137, 42.21.138, 42.21.139, 42.21.140, 42.21.151, 42.21.153, 42.21.155, 42.21.158, 42.21.159, 42.21.160, 42.21.162, 42.22.1311 relating to property taxes and the trend tables for valuing property

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

TO:  All Concerned Persons

 

1.  On November 24, 2009, at 3:00 p.m., a public hearing will be held in the Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, at Helena, Montana, to consider the amendment of the above-stated rules.

Individuals planning to attend the hearing shall enter the building through the east doors of the Sam W. Mitchell Building, 125 North Roberts, Helena, Montana.

 

2.  The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice.  If you require an accommodation, contact the Department of Revenue no later than 5:00 p.m., November 9, 2009, to advise us of the nature of the accommodation that you need.  Please contact Cleo Anderson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-5828; fax (406) 444-3696; or e-mail canderson@mt.gov.

 

3.  The rules proposed to be amended provide as follows, stricken matter interlined, new matter underlined:

 

42.21.113  LEASED AND RENTAL EQUIPMENT  (1)  Leased or rental equipment that is leased or rented on an hourly, daily, or weekly, semimonthly, or monthly basis, but is not exempt under 15-6-201(1)(cc) 15-6-219(5) or 15-6-202(4), MCA, will be valued in the following manner:

(a)  For equipment that has an acquired cost of $0 to $500, the department shall use a four-year trended depreciation schedule. The trended schedule will be the same as ARM 42.21.155, category 1.

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2008

70%

2007

38%

2006

16%

2005 and older

8%

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2009

70%

2008

42%

2007

16%

2006 and older

8%

 

(b)  For equipment that has an acquired cost of $501 to $1,500, the department shall use a five-year trended depreciation schedule.  The trended schedule will be the same as ARM 42.21.155, category 2.

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2008

85%

2007

71%

2006

53%

2005

35%

2004 and older

21%

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2009

85%

2008

75%

2007

58%

2006

38%

2005 and older

22%

 

(c)  For equipment that has an acquired cost of $1,501 to $5,000, the department shall use a ten-year trended depreciation schedule.  The trended schedule will be the same as ARM 42.21.155, category 8.

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2008

92%

2007

86%

2006

80%

2005

73%

2004

65%

2003

56%

2002

45%

2001

35%

2000

28%

1999 and older

24%

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2009

92%

2008

89%

2007

83%

2006

75%

2005

67%

2004

59%

2003

47%

2002

37%

2001

29%

2000 and older

25%

 

(d)  For equipment that has an acquired cost of $5,001 to $15,000, the department shall use the trended depreciation schedule for heavy equipment.  The schedule will be the same as ARM 42.21.131.

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2009

80%

2008

65%

2007

63%

2006

56%

2005

50%

2004

44%

2003

40%

2002

37%

2001

35%

2000

32%

1999

28%

1998

29%

1997

29%

1996

29%

1995

26%

1994

26%

1993

24%

1992

23%

1991

22%

1990 and older

22%

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2010

80%

2009

65%

2008

58%

2007

56%

2006

50%

2005

44%

2004

41%

2003

38%

2002

36%

2001

36%

2000

29%

1999

25%

1998

24%

1997

24%

1996

25%

1995

22%

1994

21%

1993

22%

1992

21%

1991 and older

21%

 

(e)  For rental video tapes and digital video disks the following schedule will be used:

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2008

25%

2007

15%

2006 and older

10%

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2009

25%

2008

15%

2007 and older

10%

 

(2)  For all other leased property that is not rented on an hourly, daily, or weekly, semimonthly, or monthly basis, the valuation procedures shall be the same as other like personal property.

(3)  When a special mobile permit (SM plate), as defined in 61-1-104, 61-4-101(66), MCA, is purchased for lease or rental equipment, the equipment will be classified and valued the same as other SM equipment in class eight.

(4)  All leased and rental property not exempt under 15-6-201(1)(cc) 15-6-219(5) or 15-6-202(4), MCA, will be assessed and taxed as class eight property.

(5)  This rule is effective for tax years beginning after December 31, 2008 2009.

 

AUTH: 15-1-201, 15-23-108, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, 15-24-921, 15-24-922, 15-24-925, MCA

 

            REASONABLE NECESSITY: The department is proposing to amend ARM 41.21.113 to clarify through the trend tables how the department arrives at market value as required by 15-8-111, MCA.  Annually, the department updates these schedules to inform taxpayers of the current percentages used by the department when valuing and taxing their property.

            To determine the market value of personal property, the department has historically used and adopted the concept of trending and depreciation.  The method by which trended depreciation schedules are derived is described in the existing rule, and that method is not being changed.

            The First Judicial District Court indicated in 1986 that the department must publish these trend tables annually and these amendments are in compliance with that order.

            The department is adding the language semimonthly or monthly to ARM 42.21.113(1) and (2) to be in compliance with Senate Bill 280, (Ch. 295, L. 2009), which was enacted by the 2009 Legislature to be effective for tax years beginning after December 31, 2009.

 

42.21.123  FARM MACHINERY AND EQUIPMENT  (1) through (4) remain the same.

(5)  The trended depreciation schedule referred to in (2) through (4) is listed below and shall be used for tax year 2009 2010.  The schedule is derived by using the guidebook listed in (1) as the data base.  The values derived through use of the trended depreciation schedule will approximate average wholesale value.

 

FARM MACHINERY & EQUIPMENT TRENDED DEPRECIATION SCHEDULE

YEAR NEW/ACQUIRED

TRENDED % GOOD

AVERAGE WHOLESALE

2009

80%

2008

75%

2007

70%

2006

70%

2005

64%

2004

60%

2003

52%

2002

46%

2001

42%

2000

39%

1999

36%

1998

35%

1997

33%

1996

31%

1995

31%

1994

26%

1993 and older

23%

 

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

AVERAGE WHOLESALE

2010

80%

2009

75%

2008

71%

2007

68%

2006

64%

2005

58%

2004

54%

2003

47%

2002

42%

2001

38%

2000

36%

1999

33%

1998

33%

1997

30%

1996

28%

1995

28%

1994 and older

23%

 

(6) remains the same.

            (7)  This rule is effective for tax years beginning after December 31, 2008 2009.

 

            AUTH: 15-1-201, MCA

            IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, 15-24-921, 15-24-922, 15-24-925, MCA

 

            REASONABLE NECESSITY:  The department is proposing to amend ARM 41.21.123 to clarify through the trend tables how the department arrives at market value as required by 15-8-111, MCA.

            Annually, the department updates these schedules to inform taxpayers of the current percentages used by the department when valuing and taxing their property.  To determine the market value of personal property, the department historically uses and adopts the concept of trending and depreciation.  The method by which trended depreciation schedules are derived is described in the existing rule, and that method is not being changed.

            The First Judicial District Court indicated in 1986 that the department must publish these trend tables annually and these amendments are in compliance with that order.

 

42.21.125 BUSINESS EQUIPMENT  (1) remains the same.

(2)  Business equipment that is held by a dealers, pursuant to a dealer rental program, is not a part of the dealer's inventory except for farm implements and construction equipment that are in a purchase incentive rental program and that meet the criteria in (4).  The dealer shall report the equipment on the property reporting form provided by the department.  The dealer shall be assessed property tax on the equipment for the full tax year.

(3)  All business equipment that is part of a dealer sales program or a dealer demonstration program shall be considered a part of the dealer's business inventory.

(4)  Farm implements and construction equipment that meet all of the following criteria shall be considered a part of the dealer's business inventory:

(a)  the equipment must be owned by a farm implement or construction equipment dealership,

(b)  the equipment must be held for sale;

(c)  the equipment must be rented only once to a single user for nine months or less as an incentive for the purchase of the property.

(5)  Property brought into the state that meets the criteria in (4) is not taxable unless it is sold or otherwise disposed of in the state.

(6)  All farm implement and construction equipment dealers with equipment that meet the criteria in (4) shall report the qualifying equipment each calendar quarter for which the dealership has qualifying equipment on the form provided by the department.  As part of its audit responsibility, the department may request a copy of specific purchase rental program agreements from the respective dealers.

 

AUTH: 15-1-201, MCA

IMP: 15-6-202, MCA

 

            REASONABLE NECESSITY:  The department is proposing to amend ARM 42.21.125 so farm implement and construction equipment dealers clearly understand the conditions under which their property is exempt from property taxation. 

            Farm implement and construction equipment dealers historically allowed producers the opportunity to "test drive" new and used equipment by using it in their operation for specific time periods, normally several days or weeks.  The producer paid a rental or lease fee for use of the equipment.  The law provided no latitude – the fact that the equipment was rented or leased made it taxable.  Those situations created what was viewed by those dealers as an unwarranted property tax burden.  The dealers maintained that the equipment was actually business equipment that was for sale, thus tax exempt.  The 2009 Legislature provided an exception to the law by providing in House Bill 487 (Ch. 343, L. 2009), that business equipment that is part of a dealer sales program shall be considered a part of the dealer's inventory program.  The provisions of that program are contained in the proposed rule.  The department developed these provisions through discussions with the Implement Dealer's Association. 

            The rule also addresses the reporting requirements and complies with the provisions enacted by House Bill 487 (Ch. 343, L. 2009), which changed 15-6-138, 15-6-202, and 15-24-301, MCA.

 

42.21.131  HEAVY EQUIPMENT  (1) through (4) remain the same.

(5)  The trended depreciation schedule referred to in (2), (3), and (4) is listed below and shall be used for tax year 2009 2010.  The values derived through the use of these percentages approximate the "quick sale" values as calculated in the guidebooks listed in (1).

 

HEAVY EQUIPMENT TRENDED DEPRECIATION SCHEDULE

 

TRENDED % GOOD

YEAR NEW/ACQUIRED

WHOLESALE

2009

80%

2008

65%

2007

63%

2006

56%

2005

50%

2004

44%

2003

40%

2002

37%

2001

35%

2000

32%

1999

28%

1998

29%

1997

29%

1996

29%

1995

26%

1994

26%

1993

24%

1992

23%

1991

22%

1990 and older

22%

 

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

WHOLESALE

2010

80%

2009

65%

2008

58%

2007

56%

2006

50%

2005

44%

2004

41%

2003

38%

2002

36%

2001

36%

2000

29%

1999

25%

1998

24%

1997

24%

1996

25%

1995

22%

1994

21%

1993

22%

1992

21%

1991 and older

21%

 

(6)  This rule is effective for tax years beginning after December 31, 2008 2009, and applies to all heavy equipment.

 

AUTH: 15-1-201, 15-23-108, MCA

            IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, 15-24-921, 15-24-922, 15-24-925, MCA

 

            REASONABLE NECESSITY: See the reasonable necessity for ARM 42.21.123.

 

42.21.137  SEISMOGRAPH UNITS AND ALLIED EQUIPMENT

(1) through (3) remain the same.

(4)  The trended depreciation schedules referred to in (1) through (3) are listed below and shall be used for tax year 2009 2010.

 

SEISMOGRAPH UNIT

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

WHOLESALE FACTOR

WHOLESALE % GOOD

2009

100%

1.000

100%

80%

80%

2008

85%

1.000

85%

80%

68%

2007

69%

1.033

71%

80%

57%

2006

52%

1.094

57%

80%

46%

2005

34%

1.149

39%

80%

31%

2004

20%

1.247

25%

80%

20%

2003 and older

5%

1.291

6%

80%

5%

 

 

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

WHOLESALE FACTOR

WHOLESALE % GOOD

2010

100%

1.000

100%

80%

80%

2009

85%

1.000

85%

80%

68%

2008

69%

1.041

72%

80%

57%

2007

52%

1.088

57%

80%

45%

2006

34%

1.153

39%

80%

31%

2005

20%

1.211

24%

80%

19%

2004 and older

5%

1.314

7%

80%

5%

 

SEISMOGRAPH ALLIED EQUIPMENT

YEAR NEW/ ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2009

100%

1.000

100%

2008

85%

1.000

85%

2007

69%

1.033

71%

2006

52%

1.094

57%

2005

34%

1.149

39%

2004

20%

1.247

25%

2003 and older

5%

1.291

6%

 

YEAR NEW/ ACQUIRED

 

% GOOD

 

TREND FACTOR

TRENDED % GOOD

2010

100%

1.000

100%

2009

85%

1.000

85%

2008

69%

1.041

72%

2007

52%

1.088

57%

2006

34%

1.153

39%

2005

20%

1.211

24%

2004 and older

5%

1.314

7%

 

(5)  This rule is effective for tax years beginning after December 31, 2008 2009.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, 15-24-921, 15-24-922, 15-24-925, MCA

 

            REASONABLE NECESSITY: See the reasonable necessity for ARM 42.21.123.

 

42.21.138  OIL AND GAS FIELD MACHINERY AND EQUIPMENT  (1) and (2) remain the same.

(3)  The trended depreciation schedule referred to in (1) and (2) is listed below and shall be used for tax year 2009 2010.

 

OIL AND GAS FIELD PRODUCTION

EQUIPMENT TRENDED DEPRECIATION SCHEDULE

YEAR NEW/

 

TREND

TRENDED

ACQUIRED

% GOOD

FACTOR

% GOOD

2009

100%

1.000

100%

2008

95%

1.000

95%

2007

90%

1.033

93%

2006

85%

1.094

93%

2005

79%

1.149

91%

2004

73%

1.247

91%

2003

68%

1.291

88%

2002

62%

1.317

82%

2001

55%

1.324

73%

2000

49%

1.336

65%

1999

43%

1.358

58%

1998

37%

1.365

50%

1997

31%

1.379

43%

1996

26%

1.396

36%

1995

23%

1.424

33%

1994 and older

20%

1.476

30%

 

YEAR NEW/ ACQUIRED

 

% GOOD

 

TREND FACTOR

TRENDED % GOOD

2010

100%

1.000

100%

2009

95%

1.000

95%

2008

90%

1.041

94%

2007

85%

1.088

93%

2006

79%

1.153

91%

2005

73%

1.211

88%

2004

68%

1.314

89%

2003

62%

1.362

84%

2002

55%

1.387

76%

2001

49%

1.394

68%

2000

43%

1.408

61%

1999

37%

1.431

53%

1998

31%

1.438

45%

1997

26%

1.452

38%

1996

23%

1.471

34%

1995 and older

20%

1.500

30%

 

(4) and (5) remain the same.

(6)  This rule is effective for tax years beginning after December 31, 2008 2009.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-213, 15-6-219, 15-24-921, 15-24-922, 15-24-925, MCA

 

            REASONABLE NECESSITY: See the reasonable necessity for ARM 42.21.123.

 

42.21.139  WORK-OVER AND SERVICE RIGS  (1) through (4) remain the same.

(5)  The trended depreciation schedule referred to in (2) and (4) is listed below and shall be used for tax year 2009 2010.

 

SERVICE AND WORKOVER RIG TRENDED DEPRECIATION SCHEDULE

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

WHOLESALE FACTOR

TRENDED WHOLESALE % GOOD

2009

100%

1.000

80%

80%

2008

92%

1.000

80%

74%

2007

84%

1.033

80%

69%

2006

76%

1.094

80%

67%

2005

67%

1.149

80%

62%

2004

58%

1.247

80%

58%

2003

49%

1.291

80%

51%

2002

39%

1.317

80%

41%

2001

30%

1.324

80%

32%

2000

24%

1.336

80%

26%

1999 and older

20%

1.358

80%

22%

 

YEAR/NEW ACQUIRED

% GOOD

TREND FACTOR

WHOLESALE FACTOR

TRENDED WHOLESALE % GOOD

2010

100%

1.000

80%

80%

2009

92%

1.000

80%

74%

2008

84%

1.041

80%

70%

2007

76%

1.088

80%

66%

2006

67%

1.153

80%

62%

2005

58%

1.211

80%

56%

2004

49%

1.314

80%

51%

2003

39%

1.362

80%

42%

2002

30%

1.387

80%

33%

2001

24%

1.394

80%

27%

2000 and older

20%

1.408

80%

23%

 

(6)  This rule is effective for tax years beginning after December 31, 2008 2009.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-219, 15-24-921, 15-24-922, 15-24-925, MCA

 

            REASONABLE NECESSITY: See the reasonable necessity for ARM 42.21.123.

 

42.21.140  OIL DRILLING RIGS  (1) remains the same.

(2)  The department shall prepare a ten-year trended depreciation schedule for oil drilling rigs.  The trended depreciation schedule shall be derived from depreciation factors published by Marshall and Swift Publication Company.  The "% good" for all drill rigs less than one year old shall be 100%.  The trended depreciation schedule for tax year 2009 2010 is listed below.

 

DRILL RIG TRENDED DEPRECIATION SCHEDULE

YEAR NEW/ACQUIRED

 

% GOOD

 

TREND FACTOR

TRENDED

% GOOD

2009

100%

1.000

100%

2008

92%

1.000

92%

2007

84%

1.033

87%

2006

76%

1.094

83%

2005

67%

1.149

77%

2004

58%

1.247

72%

2003

49%

1.291

63%

2002

35%

1.317

46%

2001

30%

1.324

40%

2000

24%

1.336

32%

1999 and older

20%

1.358

27%

 

YEAR/NEW ACQUIRED

 

% GOOD

 

TREND FACTOR

TRENDED % GOOD

2010

100%

1.000

100%

2009

92%

1.000

92%

2008

84%

1.041

87%

2007

76%

1.088

83%

2006

67%

1.153

77%

2005

58%

1.211

70%

2004

49%

1.314

64%

2003

35%

1.362

48%

2002

30%

1.387

42%

2001

24%

1.394

33%

2000 and older

20%

1.408

28%

 

(3) remains the same.

(4)  This rule is effective for tax years beginning after December 31, 2008 2009.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, 15-24-921, 15-24-922, 15-24-925, MCA

 

            REASONABLE NECESSITY: See the reasonable necessity for ARM 42.21.123.

 

42.21.151  TELEVISION CABLE SYSTEMS  (1) through (3) remain the same.

(4)  The trended depreciation schedules referred to in (2) and (3) are listed below and shall be in effect for tax year 2009 2010.

 

TABLE 1:  FIVE-YEAR "DISHES"

YEAR NEW/

 

TREND

TRENDED

ACQUIRED

% GOOD

FACTOR

% GOOD

2008

85%

1.000

85%

2007

69%

1.029

71%

2006

52%

1.085

56%

2005

34%

1.136

39%

2004 and older

20%

1.221

24%

 

YEAR NEW/ ACQUIRED

 

% GOOD

 

TREND FACTOR

TRENDED % GOOD

2009

85%

1.000

85%

2008

69%

1.034

71%

2007

52%

1.075

56%

2006

34%

1.133

39%

2005 and older

20%

1.186

24%

 

TABLE 2:  TEN-YEAR "TOWERS"

YEAR NEW/

 

TREND

TRENDED

ACQUIRED

% GOOD

FACTOR

% GOOD

2008

92%

1.000

92%

2007

84%

1.029

86%

2006

76%

1.085

82%

2005

67%

1.136

76%

2004

58%

1.221

71%

2003

49%

1.263

62%

2002

39%

1.285

50%

2001

30%

1.292

39%

2000

24%

1.303

31%

1999 and older

20%

1.327

27%

 

YEAR NEW/ ACQUIRED

 

% GOOD

 

TREND FACTOR

TRENDED % GOOD

2009

92%

1.000

92%

2008

84%

1.034

87%

2007

76%

1.075

82%

2006

67%

1.133

76%

2005

58%

1.186

69%

2004

49%

1.275

62%

2003

39%

1.319

51%

2002

30%

1.342

40%

2001

24%

1.350

32%

2000 and older

20%

1.361

27%

 

(5)  This rule is effective for tax years beginning after December 31, 2008 2009.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, 15-24-921, 15-24-922, 15-24-925, MCA

 

            REASONABLE NECESSITY: See the reasonable necessity for ARM 42.21.123.

 

42.21.153  SKI LIFT EQUIPMENT  (1) and (2) remain the same.

(3)  The depreciation schedules shall be determined by the life expectancy of the equipment and will normally compensate for the loss in value due to ordinary wear and tear, offset by reasonable maintenance, and ordinary functional obsolescence due to the technological changes during the life expectancy period.

 

DEPRECIATION TABLE FOR SKI LIFT EQUIPMENT

YEAR NEW/

 

TREND

TRENDED

ACQUIRED

% GOOD

FACTOR

% GOOD

2008

92%

1.000

92%

2007

84%

1.029

86%

2006

76%

1.085

82%

2005

67%

1.136

76%

2004

58%

1.221

71%

2003

49%

1.263

62%

2002

39%

1.285

50%

2001

30%

1.292

39%

2000

24%

1.303

31%

1999 and older

20%

1.327

27%

 

YEAR NEW/ ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2009

92%

1.000

92%

2008

84%

1.034

87%

2007

76%

1.075

82%

2006

67%

1.133

76%

2005

58%

1.186

69%

2004

49%

1.275

62%

2003

39%

1.319

51%

2002

30%

1.342

40%

2001

24%

1.350

32%

2000 and older

20%

1.361

27%

 

(a)  The taxpayer must initially list with the department:

(i)  all equipment by year of installation; and

(ii)  installed costs of that equipment.

(b)  Each year thereafter, the taxpayer must list with the department:

(i)  all additions or deletions from the previous year's list, with installed cost.

(4)  This methodology is effective for tax years beginning after December 31, 2008 2009.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, 15-24-921, 15-24-922, 15-24-925, MCA

 

            REASONABLE NECESSITY: See the reasonable necessity for ARM 42.21.123.

 

42.21.155  DEPRECIATION SCHEDULES  (1) remains the same.

(2)  The trended depreciation schedules for tax year 2009 2010 are listed below.  The categories are explained in ARM 42.21.156.  The trend factors are derived according to ARM 42.21.156 and 42.21.157.

 

CATEGORY 1

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2008

70%

1.000

70%

2007

45%

0.851

38%

2006

20%

0.810

16%

2005 and older

10%

0.773

8%

 

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2009

70%

1.000

70%

2008

45%

0.932

42%

2007

20%

0.793

16%

2006 and older

10%

0.755

8%

 

CATEGORY 2

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2008

85%

1.000

85%

2007

69%

1.022

71%

2006

52%

1.016

53%

2005

34%

1.022

35%

2004 and older

20%

1.034

21%

 

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2009

85%

1.000

85%

2008

69%

1.089

75%

2007

52%

1.112

58%

2006

34%

1.106

38%

2005 and older

20%

1.113

22%

 

CATEGORY 3

YEAR NEW/ACQUIRED

 

% GOOD

 

TREND FACTOR

TRENDED % GOOD

2008

85%

1.000

85%

2007

69%

0.905

62%

2006

52%

0.908

47%

2005

34%

0.897

30%

2004 and older

20%

0.878

18%

 

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2009

85%

1.000

85%

2008

69%

0.966

67%

2007

52%

0.873

45%

2006

34%

0.876

30%

2005 and older

20%

0.865

17%

 

CATEGORY 4

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2008

85%

1.000

85%

2007

69%

0.977

67%

2006

52%

0.966

50%

2005

34%

0.953

32%

2004 and older

20%

0.925

19%

 

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2009

85%

1.000

85%

2008

69%

0.988

68%

2007

52%

0.966

50%

2006

34%

0.955

32%

2005 and older

20%

0.943

19%

 

CATEGORY 5

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2008

85%

1.000

85%

2007

69%

1.014

70%

2006

52%

1.034

54%

2005

34%

1.062

36%

2004 and older

20%

1.088

22%

 

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2009

85%

1.000

85%

2008

69%

1.043

72%

2007

52%

1.057

55%

2006

34%

1.078

37%

2005 and older

20%

1.108

22%

 

CATEGORY 6

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2008

85%

1.000

85%

2007

69%

1.022

71%

2006

52%

1.058

55%

2005

34%

1.129

38%

2004 and older

20%

1.177

24%

 

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2009

85%

1.000

85%

2008

69%

1.026

71%

2007

52%

1.048

54%

2006

34%

1.085

37%

2005 and older

20%

1.159

23%

 

CATEGORY 7

 

 

 

 

YEAR NEW/

 

TREND

TRENDED

ACQUIRED

% GOOD

FACTOR

% GOOD

2008

92%

1.000

92%

2007

84%

1.018

86%

2006

76%

1.040

79%

2005

67%

1.072

72%

2004

58%

1.100

64%

2003

49%

1.105

54%

2002

39%

1.103

43%

2001

30%

1.104

33%

2000

24%

1.115

27%

1999 and older

20%

1.124

22%

 

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2009

92%

1.000

92%

2008

84%

1.031

87%

2007

76%

1.050

80%

2006

67%

1.072

72%

2005

58%

1.105

64%

2004

49%

1.134

56%

2003

39%

1.139

44%

2002

30%

1.138

34%

2001

24%

1.138

27%

2000 and older

20%

1.150

23%

 

CATEGORY 8

YEAR NEW/ACQUIRED

 

% GOOD

 

TREND FACTOR

TRENDED % GOOD

 

2008

92%

1.000

92%

 

2007

84%

1.021

86%

 

2006

76%

1.050

80%

 

2005

67%

1.084

73%

 

2004

58%

1.125

65%

 

2003

49%

1.134

56%

 

2002

39%

1.145

45%

 

2001

30%

1.152

35%

 

2000

24%

1.165

28%

 

1999 and older

20%

1.179

24%

 

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2009

92%

1.000

92%

2008

84%

1.063

89%

2007

76%

1.086

83%

2006

67%

1.116

75%

2005

58%

1.152

67%

2004

49%

1.197

59%

2003

39%

1.206

47%

2002

30%

1.217

37%

2001

24%

1.225

29%

2000 and older

20%

1.239

25%

 

(3)  This rule is effective for tax years beginning after December 31, 2008 2009.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, 15-24-921, 15-24-922, 15-24-925, MCA

 

            REASONABLE NECESSITY: See the reasonable necessity for ARM 42.21.123.

 

42.21.158  PROPERTY REPORTING REQUIREMENTS  (1) remains the same.

(2)  If the aggregate market value of a person or business entity's class eight property on a statewide basis is $20,000 or less, the person or business entity is exempt from class eight taxation.  In order to determine whether individual taxpayers or business entities are below that threshold, the department will require all persons or business entities with an aggregate market value over $5,000 to report their class eight property for the 2006 tax year.  In subsequent years of the reappraisal cycle, the department will not require annual reporting for those taxpayers that have demonstrated they are below the $20,000 exemption threshold for the 2006 tax year, unless the person or business entity acquires new class eight property or a departmental review as provided in 15-8-104, MCA, indicates a need to report.  To ensure fair and accurate reporting of all taxable class eight property, the department may require all persons or business entities to report their class eight property periodically.  It is the department's current plan to require a report of all class eight property for tax year 2010 2011 and, if judged necessary, for additional future tax years at intervals to be determined.

(3) through (9) remain the same.

(10)  This rule is effective for tax years beginning after December 31, 2005 2009.

 

AUTH: 15-1-201, MCA

IMP: 15-1-303, 15-8-104, 15-8-301, 15-8-303, 15-8-309, 15-24-902, 15-24-903, 15-24-904, 15-24-905, MCA

 

            REASONABLE NECESSITY: The department is proposing to amend the rule by changing the year in which the department will require a report of all class eight property from tax year 2010 to tax year 2011.  Since the department has conducted ongoing personal property discovery, review and audits from the time this rule was written in 2006 to the present, delaying it would not have a significant negative impact. 

            The department is further amending the rule to delete the language in (2) that covers tax year 2006 because that language is no longer necessary.  That language was originally adopted to clarify the thresholds to be used for Class 8 property for tax year 2006 and subsequent tax years, as well as reporting requirements. 

            The remaining language is intended to inform taxpayers that the next full report of all Class 8 property will not occur until the 2011 tax year and then only if it is deemed necessary.

 

42.21.159  PROPERTY AUDITS AND REVIEWS  (1) through (3) remain the same.

(4)  The department will seek access to the following records for purposes of conducting the audits and reviews, pursuant to 15-8-304, MCA:

(a)  personal property returns on file in the department's field offices;

(b)  income statements, receipts of purchase, asset listings, asset registers, asset ledgers, purchase rental program agreements, and any information in the possession of the property owner or lessee which would reflect capital asset investment costs;

(c)  any depreciation schedules, age/life programs, asset life schedules, or capital asset investment recovery records in the possession of the commercial personal property taxpayer or his representative; and

(d)  any other information in the possession of the department and/or property owner or lessee which is necessary in order to conduct a thorough audit or review.

 

AUTH: 15-1-201, MCA

IMP: 15-8-104, MCA

 

REASONABLE NECESSITY:  The department is proposing to amend the rule in order to implement the provisions of House Bill 487, (Ch. 343, L. 2009), passed by the 2009 Legislature, to include "purchase rental program agreements" as some of the documentation that will be required if an audit or review is conducted by the department.  This change conforms to the legislative changes made by House Bill 487.

 

42.21.160  DEFINITIONS  For purposes of this chapter the following definitions apply:

(1) through (3) remain the same.

(4)  "Dealer demonstration purchase incentive rental program" is a program operated by equipment dealerships where the equipment is owned by the dealer and held for sale.  The dealer is allowed to demonstrate rent the equipment to a single user on a short term basis as an incentive for sales of the equipment.

(5) through (9)(c) remain the same.

 

AUTH: 15-1-201, MCA

IMP: 15-6-138, 15-8-104, MCA

 

            REASONABLE NECESSITY:  The department is proposing to amend the rule in order to implement the provisions of House Bill 487, (Ch. 343, L. 2009), passed by the 2009 Legislature, which requires changes to 15-6-138, 15-6-202, and 15-24-301, MCA.  The proposed amendments are necessary to bring the rule terminology into compliance with that of the statutes.

 

42.21.162  PERSONAL PROPERTY TAXATION DATES  (1) remains the same.

(2)  In order to obtain an exemption for personal property, other than class eight property that is exempt under 15-6-138(4), MCA, freeport merchandise or business inventories that are exempt under 15-6-202, MCA, or intangible personal property that is exempt under 15-6-218, MCA, an application for exemption must be filed before March 1 of the year for which the exemption is sought. If the applicant acquires the personal property after January 1, they must submit an application for exemption:

(a)  by March 1;

(b)  within 30 days of acquisition of the property; or

(c)  within 30 days of receipt of an assessment notice, whichever is later.

(3) through (7)(b) remain the same.

 

AUTH: 15-1-201, MCA

IMP: 15-8-201, 15-16-613, 15-24-301, 15-24-303, MCA

 

            REASONABLE NECESSITY: The department is proposing to amend ARM 42.21.162 to clarify the references for exempt personal property.

 

42.22.1311  INDUSTRIAL MACHINERY AND EQUIPMENT TREND FACTORS  (1) through (2)(cj) remain the same.

            (3)  Tables 1 through 32 represent the yearly trend factors for each of the categories.

 

YEAR

TABLE 1

TABLE 2

TABLE 3

TABLE 4

TABLE 5

 

Airplane Mfg.

Baking

Bottling

Brew/Dis.

Candy Confect.

2008

1.000

1.000

1.000

1.000

1.000

2007

1.029

1.031

1.032

1.033

1.031

2006

1.087

1.104

1.095

1.095

1.107

2005

1.143

1.155

1.151

1.151

1.158

2004

1.238

1.242

1.248

1.244

1.245

2003

1.285

1.289

1.294

1.286

1.290

2002

1.308

1.311

1.317

1.309

1.311

2001

1.313

1.319

1.323

1.318

1.319

2000

1.322

1.334

1.335

1.332

1.335

1999

1.346

1.360

1.360

1.357

1.361

1998

1.348

1.365

1.363

1.364

1.366

1997

1.358

1.379

1.373

1.378

1.381

1996

1.374

1.403

1.394

1.400

1.406

1995

1.393

1.423

1.416

1.426

1.428

1994

1.449

1.482

1.472

1.480

1.487

1993

1.486

1.528

1.511

1.515

1.532

1992

1.510

1.556

1.536

1.539

1.561

1991

1.520

1.577

1.551

1.555

1.582

1990

1.544

1.613

1.581

1.590

1.621

1989

1.578

1.657

1.620

1.635

1.669

 

YEAR

TABLE 1

TABLE 2

TABLE 3

TABLE 4

TABLE 5

 

Airplane Mfg.

Baking

Bottling

Brew/Dis.

Candy Confect.

2009

1.000

1.000

1.000

1.000

1.000

2008

1.036

1.030

1.032

1.033

1.029

2007

1.079

1.072

1.077

1.079

1.071

2006

1.139

1.148

1.142

1.143

1.150

2005

1.198

1.201

1.201

1.202

1.202

2004

1.297

1.291

1.302

1.299

1.292

2003

1.346

1.340

1.350

1.343

1.339

2002

1.371

1.363

1.374

1.367

1.361

2001

1.376

1.372

1.381

1.376

1.370

2000

1.385

1.387

1.393

1.391

1.386

1999

1.411

1.415

1.419

1.417

1.413

1998

1.412

1.419

1.422

1.425

1.418

1997

1.423

1.434

1.433

1.439

1.433

1996

1.440

1.459

1.455

1.462

1.459

1995

1.460

1.480

1.477

1.490

1.482

1994

1.518

1.541

1.536

1.546

1.543

1993

1.558

1.588

1.576

1.582

1.591

1992

1.582

1.618

1.602

1.607

1.620

1991

1.593

1.640

1.618

1.624

1.642

1990

1.618

1.677

1.650

1.661

1.682

 

YEAR

TABLE 6

TABLE 7

TABLE 8

TABLE 9

TABLE 10

 

Cement Mfg.

Chemical Mfg.

Clay Mfg.

Contractor Eq.

Creamery/Dairy

2008

1.000

1.000

1.000

1.000

1.000

2007

1.032

1.033

1.032

1.024

1.032

2006

1.086

1.094

1.087

1.060

1.105

2005

1.140

1.149

1.139

1.108

1.160

2004

1.239

1.247

1.229

1.183

1.248

2003

1.288

1.291

1.273

1.218

1.291

2002

1.314

1.317

1.298

1.236

1.313

2001

1.323

1.324

1.308

1.246

1.321

2000

1.335

1.336

1.322

1.254

1.336

1999

1.358

1.358

1.344

1.275

1.363

1998

1.364

1.365

1.349

1.286

1.369

1997

1.378

1.379

1.363

1.300

1.383

1996

1.395

1.396

1.384

1.326

1.406

1995

1.421

1.424

1.410

1.348

1.431

1994

1.471

1.476

1.459

1.385

1.491

1993

1.504

1.507

1.493

1.419

1.531

1992

1.527