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Montana Administrative Register Notice 42-2-853 No. 19   10/14/2010    
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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, 42.21.131, 42.21.137, 42.21.138, 42.21.139, 42.21.140, 42.21.151, 42.21.153, 42.21.155, 42.21.156, 42.21.157, and 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 4, 2010, at 2:30 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., October 25, 2010, 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) 444-4375; 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, weekly, semimonthly, or monthly basis, but is not exempt under 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

2009

70%

2008

42%

2007

16%

2006 and older

8%

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2010

70%

2009

43%

2008

18%

2007 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

2009

85%

2008

75%

2007

58%

2006

38%

2005 and older

22%

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2010

85%

2009

66%

2008

54%

2007

36%

2006 and older

21%

 

(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

2009

92%

2008

89%

2007

83%

2006

75%

2005

67%

2004

59%

2003

47%

2002

37%

2001

29%

2000 and older

25%

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2010

92%

2009

84%

2008

81%

2007

73%

2006

65%

2005

57%

2004

47%

2003

36%

2002

29%

2001 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

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%

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2011

80%

2010

58%

2009

52%

2008

43%

2007

41%

2006

34%

2005

31%

2004

30%

2003

30%

2002

26%

2001

25%

2000

22%

1999

18%

1998

20%

1997

19%

1996

19%

1995

15%

1994

16%

1993

17%

1992

16%

 

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

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2009

25%

2008

15%

2007 and older

10%

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2010

25%

2009

15%

2008 and older

10%

 

(2) through (4) remain the same.

5)  This rule is effective for tax years beginning after December 31, 2009 2010.

 

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 demonstrate 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.

 

42.21.123 FARM MACHINERY AND EQUIPMENT  (1) and (2) remain the same.

(3)  For all farm machinery and equipment which cannot be valued under (1) and (2), the department shall try to ascertain the original FOB (free on board value) through old farm machinery and equipment valuation guidebooks. If an original FOB cannot be ascertained, the department may use trending to determine the FOB. The FOB or "trended" FOB will be used in conjunction with the depreciation schedule in (5) to arrive at a value that approximates average wholesale value.

(4)  If the methods mentioned in (1) through (3) cannot be used to ascertain average wholesale value for farm machinery and equipment, or the value as calculated under (3) is higher than the most recent average wholesale value from the guide in (1), the owner or applicant must certify to the department the year acquired and the acquired price before that value can be applied to the schedule in (5).

(5) The trended depreciation schedule referred to in (2) through (4) is listed below and shall be used for tax year 2010 2011.  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.

 

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%

 

YEAR NEW/ACQUIRED

TRENDED % GOOD
AVERAGE WHOLESALE

2011

80%

2010

75%

2009

67%

2008

67%

2007

64%

2006

59%

2005

53%

2004

50%

2003

44%

2002

40%

2001

36%

2000

35%

1999

32%

1998

31%

1997

29%

1996

27%

1995 and older

24%

 

(6)  remains the same.

(7)  This rule is effective for tax years beginning after December 31, 2009 2010.

 

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 42.21.113. The department seeks to amend this rule to determine a more accurate value in situations where an FOB or trended FOB value is greater than the most recent quick sale.

 

42.21.131 HEAVY EQUIPMENT  (1) The wholesale market value of heavy equipment shall be the most current quick sale as shown in the "Green Guide" and "Green Guide for Older Equipment" or the on-line version of the Green Guide known as Equipment Watch, for as of January 1 of the current year of assessment.  This guide may be reviewed in the department or purchased from the publisher and is incorporated by reference: Dataquest, 1290 Ridder Park Drive, San Jose, California 95131.

(2)  For all heavy equipment which cannot be valued under (1), the department shall try to ascertain the original FOB (free on board value) through old heavy equipment valuation guidebooks.  If an original FOB cannot be ascertained, the department may use trending to determine the FOB.  The FOB or "trended" FOB will be used in conjunction with the depreciation schedule in (5) to arrive at a value which approximates wholesale value.  The trend factors are calculated using the most recent Contractor's Equipment factors available in the Marshall Valuation Service Manual for the year of assessment.  The Marshall Valuation Service Manual published by Marshall and Swift Publication Company, 915 Wilshire Boulevard, 8th Floor, P.O. Box 26307, Los Angeles, California 90026-0307, is adopted by reference.

(3)  For equipment that cannot be valued under (1) and (2), the value for heavy equipment shall be ascertained by trending the quick sale as found in the guide in (1), for the same make and model. The trend factors are the same as those mentioned in (2).  A trended quick sale value shall be applied to equipment if:

(a)  the equipment cannot be valued under (1) but a quick sale value is available for the same make and model with a different year new; and

(b)  the equipment cannot be valued under (2) or the value as calculated under (2) is higher than the most recently published previous year quick sale for the same make, model and year new. The trended quick sale value for heavy equipment shall be ascertained by trending the quick sale as found in the guide in (1), for the same make and model with a different year new.  The trend factors are the same as those mentioned in (2).

(4) remains the same.

(5)  The trended depreciation schedule referred to in (2), (3), and (4) is listed below and shall be used for tax year 2010 2011.  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

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%

 

HEAVY EQUIPMENT TRENDED DEPRECIATION SCHEDULE

 

YEAR NEW/ACQUIRED

TRENDED % GOOD
WHOLESALE

2011

80%

2010

65%

2009

58%

2008

56%

2007

50%

2006

44%

2005

41%

2004

38%

2003

36%

2002

36%

2001

29%

2000

25%

1999

24%

1998

24%

1997

25%

1996

22%

1995

21%

1994

22%

1993

21%

1992

21%

Salvage

14%

 

(6)  This rule is effective for tax years beginning after December 31, 2009 2010, 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 42.21.113.  Through the amendment in (3) the department is seeking a means to determine a more accurate value in situations where an FOB or trended FOB value is greater than the most recent quick sale.  Through the addition of (5) the department is seeking to establish a means of fairly valuing equipment that is temporarily nonoperational.

 

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 2010 2011.

 

SEISMOGRAPH UNIT

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 UNIT

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

WHOLESALE FACTOR

WHOLESALE % GOOD

2011

100%

1.000

100%

80%

80%

2010

85%

1.000

85%

80%

68%

2009

69%

0.983

68%

80%

54%

2008

52%

1.017

53%

80%

42%

2007

34%

1.064

36%

80%

29%

2006

20%

1.126

23%

80%

18%

2005 and older

5%

1.183

6%

80%

5%

 

SEISMOGRAPH ALLIED EQUIPMENT

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%

 

SEISMOGRAPH ALLIED EQUIPMENT

YEAR NEW/
ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2011

100%

1.000

100%

2010

85%

1.000

85%

2009

69%

0.983

68%

2008

52%

1.017

53%

2007

34%

1.064

36%

2006

20%

1.126

23%

2005 and older

5%

1.183

6%

 

(5)  This rule is effective for tax years beginning after December 31, 2009 2010.

 

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 42.21.113.

 

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 2010 2011.

 

OIL AND GAS FIELD PRODUCTION
EQUIPMENT TRENDED DEPRECIATION SCHEDULE

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%

 

OIL AND GAS FIELD PRODUCTION
EQUIPMENT TRENDED DEPRECIATION SCHEDULE

YEAR NEW/ ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2011

100%

1.000

100%

2010

95%

1.000

95%

2009

90%

0.983

88%

2008

85%

1.017

86%

2007

79%

1.064

84%

2006

73%

1.126

82%

2005

68%

1.183

80%

2004

62%

1.284

80%

2003

55%

1.328

73%

2002

49%

1.355

66%

2001

43%

1.363

59%

2000

37%

1.376

51%

1999

31%

1.398

43%

1998

26%

1.405

37%

1997

23%

1.419

33%

1996 or older

20%

1.437

29%

 

(4) and (5) remain the same.

(6)  This rule is effective for tax years beginning after December 31, 2009 2010.

 

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 42.21.113.

 

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 2010 2011.

 

SERVICE AND WORKOVER RIG TRENDED DEPRECIATION SCHEDULE

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%

 

SERVICE AND WORKOVER RIG TRENDED DEPRECIATION SCHEDULE

YEAR/NEW ACQUIRED

% GOOD

TREND FACTOR

WHOLESALE FACTOR

TRENDED WHOLESALE % GOOD

2011

100%

1.000

80%

80%

2010

92%

1.000

80%

74%

2009

84%

0.983

80%

66%

2008

76%

1.017

80%

62%

2007

67%

1.064

80%

57%

2006

58%

1.126

80%

52%

2005

49%

1.183

80%

46%

2004

39%

1.284

80%

40%

2003

30%

1.328

80%

32%

2002

24%

1.355

80%

26%

2001 and older

20%

1.363

80%

22%

 

(6)  This rule is effective for tax years beginning after December 31, 2009 2010.

 

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 42.21.113.

 

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 2010 2011 is listed below.

 

DRILL RIG TRENDED DEPRECIATION SCHEDULE

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%

 

DRILL RIG TRENDED DEPRECIATION SCHEDULE

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2011

100%

1.000

100%

2010

92%

1.000

92%

2009

84%

0.983

83%

2008

76%

1.017

77%

2007

67%

1.064

71%

2006

58%

1.126

65%

2005

49%

1.183

58%

2004

39%

1.284

50%

2003

30%

1.328

40%

2002

24%

1.355

33%

2001 and older

20%

1.363

27%

 

(3)  remains the same.

(4)  This rule is effective for tax years beginning after December 31, 2009 2010.

 

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 42.21.113.

 

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 2010 2011.

 

TABLE 1: FIVE-YEAR "DISHES"

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 1: FIVE-YEAR "DISHES"

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2010

85

1.000

85%

2009

69

0.989

68%

2008

52

1.017

53%

2007

34

1.057

36%

2006 and older

20

1.115

22%

 

TABLE 2: TEN-YEAR "TOWERS"

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%

 

TABLE 2: TEN-YEAR "TOWERS"

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2010

92%

1.000

92%

2009

84%

0.989

83%

2008

76%

1.017

77%

2007

67%

1.057

71%

2006

58%

1.115

65%

2005

49%

1.167

57%

2004

39%

1.255

49%

2003

30%

1.298

39%

2002

24%

1.320

32%

2001 and older

20%

1.328

27%

 

(5)  This rule is effective for tax years beginning after December 31, 2009 2010.

 

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 42.21.113.

 

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/
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%

 

DEPRECIATION TABLE FOR SKI LIFT EQUIPMENT

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2010

92%

1.000

92%

2009

84%

0.989

83%

2008

76%

1.017

77%

2007

67%

1.057

71%

2006

58%

1.115

65%

2005

49%

1.167

57%

2004

39%

1.255

49%

2003

30%

1.298

39%

2002

24%

1.320

32%

2001 and older

20%

1.328

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, 2009 2010.

 

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 42.21.113.

 

42.21.155  DEPRECIATION SCHEDULES  (1) remains the same.

(2)  The trended depreciation schedules for tax year 2010 2011 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

2009

70%

1.000

70%

2008

45%

0.932

42%

2007

20%

0.793

16%

2006 and older

10%

0.755

8%

 

YEAR NEW/
ACQUIRED

%GOOD

TREND
FACTOR

TRENDED
% GOOD

2010

70%

1.000

70%

2009

45%

0.963

43%

2008

20%

0.897

18%

2007 and older

10%

0.763

8%

 

CATEGORY 2

 

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%

 

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2010

85%

1.000

85%

2009

69%

0.957

66%

2008

52%

1.035

54%

2007

34%

1.058

36%

2006 and older

20%

1.052

21%

 

CATEGORY 3

 

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%

 

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2010

85%

1.000

85%

2009

69%

0.982

68%

2008

52%

0.949

49%

2007

34%

0.857

29%

2006 and older

20%

0.860

17%

 

CATEGORY 4

 

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%

 

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2010

85%

1.000

85%

2009

69%

0.990

68%

2008

52%

0.977

51%

2007

34%

0.956

33%

2006 and older

20%

0.945

19%

 

CATEGORY 5

 

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%

 

YEAR NEW/

ACQUIRED

% GOOD

TREND

FACTOR

TRENDED

% GOOD

2010

85%

1.000

85%

2009

69%

1.006

69%

2008

52%

1.049

55%

2007

34%

1.064

36%

2006 and older

20%

1.084

22%

 

CATEGORY 6

 

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%

 

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2010

85%

1.000

85%

2009

69%

1.013

70%

2008

52%

1.017

53%

2007

34%

1.048

36%

2006 and older

20%

1.072

21%

 

CATEGORY 7

 

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%

 

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2010

92%

1.000

92%

2009

84%

0.995

84%

2008

76%

1.026

78%

2007

67%

1.045

70%

2006

58%

1.067

62%

2005

49%

1.100

54%

2004

39%

1.129

44%

2003

30%

1.133

34%

2002

24%

1.132

27%

2001 and older

20%

1.132

23%

 

CATEGORY 8

 

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%

 

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2010

92%

1.000

92%

2009

84%

1.005

84%

2008

76%

1.069

81%

2007

67%

1.092

73%

2006

58%

1.123

65%

2005

49%

1.159

57%

2004

39%

1.203

47%

2003

30%

1.213

36%

2002

24%

1.224

29%

2001

20%

1.232

25%

 

(3)  This rule is effective for tax years beginning after December 31, 2009 2010.

 

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 42.21.113.

 

42.21.156 CATEGORIES  (1) remains the same.

(2)  Category 1 consists of computer systems, data processing equipment, computerized medical equipment, and video games.  The index used will be the "Producer Price Index for the 1972 Standard Industrial Classification Manual Industry Data," Code #3674 Series Id PCU334413334413,  "Semiconductors and Related Devices," published by the United States Department of Labor, Bureau of Labor Statistics.  A four-year depreciation table will be used.

(3)  Category 2 consists of calculating and accounting machines, cash registers, copiers, typewriters, vending machines, jukeboxes, fax machines, addressing machines, time recording machines, check endorsing machines, postage machines, electronic games, transcribing equipment, and other office and store machines.  The index used will be the "Producer Price Index for Commodity Commodities Grouping," No. 1193 Series Id WPU1193, "Office and Store Machines and Equipment," published by the United States Department of Labor, Bureau of Labor Statistics.  A five-year depreciation table will be used.

(4)  Category 3 consists of citizens band radios, mobile telephones, PBX type systems, radio and television broadcasting and transmitting equipment, locally assessed phones and phone systems, all cable T.V. equipment not assessed by ARM 42.21.151, intercom equipment, mics, and sound systems.  The index used will be the "Producer Price Index for Commodity Commodities Grouping," No. 1178 Series Id WPU1178, "Electronic Components and Accessories," published by the United States Department of Labor, Bureau of Labor Statistics.  A five-year depreciation table will be used.

(5)  Category 4 consists of specialized medical and dental equipment. The index used will be the "Producer Price Index for Commodity Commodities," No. 11790533.18 Series Id WPU117905, "Medical X-Ray Unit X-ray and Electromedical Equipment," published by the United States Department of Labor, Bureau of Labor Statistics.  A five-year depreciation table will be used.

(6)  Category 5 consists of hotel and motel furniture and equipment and also includes apartment, home rental and nursing home furniture and fixtures.  The index used will be the "Producer Price Index for Commodity Commodities Grouping," No. 12 Series Id WPU12, "Furniture and Household Durables," published by the United States Department of Labor, Bureau of Labor Statistics.  A five-year depreciation table will be used.

(7)  Category 6 consists of janitorial equipment, electronic testing equipment, coin-operated washers and dryers, video equipment and tapes (other than class six property), cameras, equipment used for beauty and barber shops (except beauty and barber chairs), exercise equipment, tanning beds, toning tables, and carpet and shampooing equipment, and ceramic molds. The index used will be the "Producer Price Index for Commodity Commodities Grouping," No. 15 Series Id WPU15, "Miscellaneous Products," published by the United States Department of Labor, Bureau of Labor Statistics.  A five-year depreciation table will be used.

(8)  Category 7 consists of repair shop tools.  The index used will be the "Producer Price Index for Commodity Commodities Grouping," No. 113 Series Id WPU113, "Metalworking Machinery and Equipment," published by the United States Department of Labor, Bureau of Labor Statistics.  A ten-year depreciation table will be used.

(9)  Category 8 consists of all other commercial furniture and fixtures and includes but is not limited to medical and dental chairs and tables, theater equipment, stereo equipment, survey equipment, billboards, garbage bins, coin-op car wash equipment, coin-op pool tables, gas pumps, bar equipment, restaurant equipment and furniture and fixtures, bowling alleys and equipment (auto scorers should be valued using category 1), photo and developing equipment, mortuary equipment, safes, security alarm systems and port-a-potties. The index used will be the "Producer Price Index for Commodity Commodities Grouping," No. 122 Series Id WPU122, "Commercial Furniture," published by the United States Department of Labor, Bureau of Labor Statistics.  A ten-year depreciation table will be used.

 

AUTH: 15-1-201, MCA

IMP: 15-6-138, MCA

 

REASONABLE NECESSITY: The department is proposing to amend ARM 41.21.156 in order to explain the source the department uses for calculating the trend tables for valuing personal property as required by 15-8-111, MCA.  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 this rule.  The method and source of information are not being changed.  The United States Department of Labor, Bureau of Labor Statistics has made changes to their indexing system and now makes the information available on the internet which is where the department acquires the Producer Price Indexes used for these calculations.

 

42.21.157 PREPARATION OF TREND FACTOR SCHEDULES  (1) remains the same.

(2)  The data used to compute the trend factors are the monthly values of the "Producer Price Indexes" (PPI) specified in ARM 42.21.156.  The values shall be taken from the most recent on-line publications of the United States Department of Labor, Bureau of Labor Statistics received by the Montana State Library as of July 15.

(3) remains the same.

(4)  The trend factors for a specific equipment group are quotients whose numerators are the most recent average annual PPI for the group and whose denominators are, in succession, the most recent average annual PPI, the average annual PPI for the period immediately preceding the most recent one, and so on, until a number of factors equal to the number of years of useful life have been calculated. In general, the trend factor to be applied to equipment in the group which is X years old (where X is less than or equal to the useful life of the equipment) is the quotient of the most recent average annual PPI and the average annual PPI for the (S-1)st period preceding the most recent one. The trend factor to be applied to equipment in the group which is older than the specified useful life L for the group is the quotient of the most recent average annual PPI for the group and the average annual PPI for the (L-1)st period preceding the most recent one. The following example is presented in order to make the mechanics of the calculation clear. Suppose that the trend factors to be used in year Y for an equipment group which has a three-year useful life are to be calculated. The calculation is to be based on the following hypothetical PPI data for the group:

 

Year

J

F

M

A

M

J

J

A

S

O

N

D

Y-1

91.1

90.8

91.3

91.2

90.6

90.1

N/A

N/A

N/A

N/A

N/A

N/A

Y-2

86.8

88.5

89.3

90.4

91.2

92.0

92.1

91.8

92.0

91.8

91.2

91.6

Y-3

84.1

84.2

84.4

84.7

84.7

84.7

84.2

84.3

84.7

85.1

85.6

86.4

Y-4

N/A

N/A

N/A

N/A

N/A

N/A

84.3

84.1

83.8

84.1

84.2

84.4

 

______________________________________________________________

The July-June 12-month average values are:

 

92.1+91.8+92.0+91.8+91.2+91.6+91.1+90.8+91.3+91.2+90.6+90.1 =91.3

                                  12

 

84.2+84.3+84.7+85.1+85.6+86.4+86.8+88.5+89.3+90.4+91.2+92.0 =87.4

                                  12

 

84.3+84.1+83.8+84.1+84.2+84.4+84.1+84.2+84.4+84.7+84.7+84.7 =84.3

                                  12

______________________________________________________________

 

The trend factors are:

               Age of Equip.

               in Years                                                              Trend Factor

                  1                                                              91.3/91.3 = 1.000

                  2                                                              91.3/87.4 = 1.045

                  3 and older                                             91.3/84.3 = 1.083

 

AUTH: 15-1-201, MCA

IMP: 15-6-138, MCA

 

REASONABLE NECESSITY: The department proposes to amend ARM 41.21.157 to explain the source the department uses for calculating the trend tables for valuing personal property as required by 15-8-111, MCA. The United States Department of Labor, Bureau of Labor Statistics now makes the information available on the internet which is where the department acquires the Producer Price Indexes used for these calculations.

 

 

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.

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 1

TABLE 2

TABLE 3

TABLE 4

TABLE 5

 

Airplane Mfg.

Baking

Bottling

Brew/Dis.

Candy Confect.

2010

1.000

1.000

1.000

1.000

1.000

2009

.980

0.988

0.987

0.990

0.990

2008

1.008

1.013

1.012

1.019

1.014

2007

1.049

1.054

1.057

1.064

1.055

2006

1.107

1.128

1.120

1.127

1.133

2005

1.165

1.180

1.178

1.185

1.184

2004

1.261

1.269

1.277

1.281

1.273

2003

1.309

1.317

1.324

1.325

1.319

2002

1.333

1.339

1.348

1.348

1.341

2001

1.338

1.348

1.354

1.357

1.349

2000

1.347

1.363

1.366

1.372

1.365

1999

1.372

1.390

1.393

1.397

1.392

1998

1.373

1.395

1.395

1.405

1.397

1997

1.384

1.409

1.406

1.419

1.412

1996

1.401

1.434

1.427

1.442

1.438

1995

1.420

1.455

1.449

1.469

1.460

1994

1.477

1.515

1.506

1.524

1.521

1993

1.515

1.561

1.547

1.560

1.567

1992

1.539

1.591

1.572

1.585

1.596

1991

1.549

1.612

1.588

1.602

1.618

 

YEAR

TABLE 6

TABLE 7

TABLE 8

TABLE 9

TABLE 10

 

Cement Mfg.

Chemical Mfg.

Clay Mfg.

Contractor Eq.

Creamery/Dairy

2009

1.000

1.000

1.000

1.000

1.000

2008

1.052

1.041

1.050

1.033

1.027

2007

1.098

1.088

1.095

1.065

1.071

2006

1.156

1.153

1.154

1.103

1.146

2005

1.213

1.211

1.209

1.153

1.203

2004

1.318

1.314

1.305

1.231

1.294

2003

1.371

1.359

1.352

1.267

1.339

2002

1.399

1.387

1.379

1.287

1.361