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42.19.1240    TAXABLE RATE REDUCTION FOR VALUE ADDED PROPERTY

(1) Manufacturing machinery and equipment installed as a result of a plant expansion program may be eligible for a reduction in taxable value based on a ratio of new qualifying employees to the number of employees prior to the expansion.

(2) The applicant must provide the department with the number of employees before and after the value added expansion. The number of new qualifying employees shall be verified through withholding records obtained from the Department of Revenue, P.O. Box 5805, Helena, Montana 59604-5805.

(3) Any year within the consecutive seven-year qualifying period that the applicant does not meet the criteria for reduction in taxable value, the taxable percentage will revert to the statutory taxable percentage for manufacturing machinery and equipment. The seven-year qualifying period commences with the first assessment year after the expansion project has become operational. The seven-year qualifying period is to run consecutively without regard to change in ownership, suspension of operation, or failure to qualify in any year within the qualifying standards set forth by statute. Once a date is established it cannot be modified.

(4) The following formula shall be used for the determination of the reduced taxable value rate:

 

                              (1-n/e) x r = R

          where:

                              n = number of qualifying new employees

                              e = number of existing employees

                              r = current machinery and equipment taxable rate

                              R = adjusted machinery and equipment taxable rate

History: 15-24-2405, MCA; IMP, 15-24-2401, 15-24-2402, 15-24-2403, 15-24-2404, MCA; NEW, 1991 MAR p. 2499, Eff. 12/13/91; AMD, 1996 MAR p. 1171, Eff. 4/26/96; AMD, 2004 MAR p. 490, Eff. 2/27/04; AMD, 2006 MAR p. 3102, Eff. 12/22/06.

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