(1) Section 15-30-140, MCA, provides that the amount of the 2007 refundable income tax credit is to be determined by applying a factor known as "the relief multiple" to the amount of property taxes that would otherwise be owed by class four residential property owners on $20,000 of market value, for the mills levied under 20-9-331, 20-9-333, and 20-9-360, MCA, for tax year 2007. This calculation requires determination of, first, the value of the relief multiple; and, second, the amount of property taxes that would be owing on $20,000 of market value of class four residential property for the mills levied under 20-9-331, 20-9-333, and 20-9-360, MCA, for tax year 2007. The product of these two amounts determines the individual income tax credit amount for tax year 2007.

(2) The base value of 0 is established in 15-30-140, MCA, as the relief multiple, and further provides that, for tax year 2007 only, this value shall be increased by 0.1 for each $1,000,000 of unaudited general fund revenue received in fiscal year 2007 in excess of a threshold amount of $1,802,000,000. As required by 15-30-140, MCA, the Department of Administration certified the unaudited general fund revenue to be $1,838,053,331 in a July 27, 2007, memorandum addressed to the Budget Director from the Director of the Department of Administration. Based on this certified amount, and the formula provided for in statute, the relief multiple for tax year 2007 is determined to be 3.6, calculated as follows:

Certified fiscal 2007 unaudited general fund revenue:             $1,838,053,331

Revenue threshold contained in HB9:                                        $1,802,000,000

Revenue in excess of threshold:                                                  $     36,053,331

 

Excess revenue rounded down to nearest million:                     $     36,000,000

 

Rounded excess revenue expressed in millions:                                              36

Relief multiple for each $1,000,000 of excess revenue:                                   0.1

Relief multiple for tax year 2007:                                                                         3.6

 

(3) The amount of tax year 2007 property taxes owing on $20,000 of market value for a class four residential property owner depends on the applicable tax year 2007 homestead exemption percentage and taxable valuation rate; and the number of mills levied under 20-9-331, 20-9-333, and 20-9-360, MCA, for tax year 2007.

(4) As provided in 15-6-222, MCA, the homestead exemption for tax year 2007 is 33.2%. Alternatively, this means that only 66.8% of the market value of class four property is subject to property tax for tax year 2007. Also as provided in 15-6-134, MCA, the taxable valuation rate for tax year 2007 is 3.07%. Finally, a total of 95 mills are levied under 20-9-331, 20-9-333, and 20-9-360, MCA, for tax year 2007. These statutory parameters result in a net property tax of $38.96 being levied on $20,000 of class four residential property for tax year 2007, calculated as follows:

 

Market value:                                                                                               $20,000

Taxable market value factor:                                                                         66.8%

Taxable market value:                                                                                $13,360

Taxable valuation percentage:                                                                      3.07%

Taxable valuation:                                                                                       $410.15

Multiply by 95 mills:                                                                                         0.095

Tax credit per unit of relief multiple:                                                          $ 38.96

 

As shown above, the total value of the individual income tax credit provided to Montana homeowners for tax year 2007 is the product of:

(a) the amount of tax year 2007 tax liability on $20,000 of class four residential property associated with the 95 mills levied under 20-9-331, 20-9-333, and 20-9-360, MCA; and

(b) the relief multiple as calculated above.

(5) The tax credit for tax year 2007 is $140 when rounded to the nearest whole dollar:

 

Property tax on $20,000 of market value (95 mills):                                 $ 38.96

Tax year 2007 relief multiple:                                                                              3.6

Tax year 2007 individual income tax credit amount

(rounded to nearest whole dollar):                                                  $ 140