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Rule Title: APPLICATIONS FOR PROPERTY TAX EXEMPTIONS
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Department: REVENUE
Chapter: REAL PROPERTY
Subchapter: Valuation of Real Property
 
Latest version of the adopted rule presented in Administrative Rules of Montana (ARM):

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42.20.102    APPLICATIONS FOR PROPERTY TAX EXEMPTIONS

(1) The property owner of record, the property owner's agent, or a federally recognized tribe must file an application for a property tax exemption on a form available from the local department office before March 1, except as provided in ARM 42.20.118, of the year for which the exemption is sought. Applications postmarked after March 1 will be considered for the following tax year only, unless the department determines any of the following conditions are met:

(a) the taxpayer receives notice by way of an AB-34 (Removal of Property Tax Exemption) that the property will be placed on the tax roll. The taxpayer shall have 30 days after receipt of the notice to submit an application for exemption; or

(b) the applicant was unable to apply for the current year due to hospitalization, physical illness, infirmity, or mental illness; and

(c) the applicant can demonstrate, while not necessarily continuous, the impediment(s) existed at sufficient levels in the period of January 1 to March 1, of the tax year in which the applicant is applying, to prevent timely filing of the application.

(2) The department may extend the March 1 deadline to June 1, if the applicant was unable to apply for the current year due to a physical or mental infirmity that existed between January 1 and June 1 of the tax year in which the applicant is applying that prevented timely filing of the application.

(3) The department may extend the March 1 deadline to June 1, on a case-by-case basis, if the property on the application was exempt in a prior year and the applicant:

(a) submits a written statement, plus any supporting documentation, explaining any circumstances that prevented timely filing of the application; and

(b) provides a completed application, including all applicable supporting documentation, postmarked no later than June 1 of the year for which benefit is sought.

(4) For each application submitted, the applicant must:

(a) identify each parcel by geocode, assessor code, legal description, or physical address;

(b) explain how the applicant qualifies for the property tax exemption; and

(c) state the specific use of the real or personal property.

(5) The following documents must accompany all applications, unless the applicant is a federally recognized tribe. If the applicant:

(a) is incorporated, a copy of the applicant's articles of incorporation;

(b) is not incorporated, a copy of the applicant's constitution or by-laws;

(c) has been granted tax-exempt status by the Internal Revenue Service (IRS), a copy of the applicant's tax-exempt status letter (501 determination); or

(d) has not been granted tax-exempt status by the IRS, the applicant must provide a written statement explaining why such exemption does not exist.

(6) A tribal resolution must accompany all applications submitted by a federally recognized tribe that:

(a) identifies the fee land, by legal description;

(b) states the type of exemption the tribe is requesting;

(c) states how the property qualifies for the exemption; and

(d) states the specific and exclusive use of the real or personal property.

(7) For personal property exemption applications, the following documents must accompany all applications:

(a) a copy of the title of motor vehicle or mobile home; or a letter identifying ownership, if title is not applicable; and

(b) a photograph of the property.

(8) For real property exemption applications, the following documents must accompany the applications:

(a) a copy of a fully executed deed, or a contract for deed, or a notice of purchaser's interest, or a security agreement identifying ownership.

(9) For real property exemption applications where the applicant is requesting exemption of property used for religious purposes, the following documents must accompany the application:

(a) if the application seeks exemption for parsonage, proof that the resident of the building identified as a parsonage is a member of the clergy; or

(b) if the applicant is a federally recognized tribe, a copy of the tribal resolution:

(i) identifying the fee land by legal description, not to exceed 15 acres, as sacred land to be used exclusively for religious purposes;

(ii) stating the type of exemption the tribe is requesting; and

(iii) stating how the property qualifies for this type of exemption.

(10) For real property exemption applications where the applicant is requesting exemption of property used for educational purposes, the following documents must accompany the application:

(a) documentation verifying the entity is not operated for gain or profit;

(b) a copy of the applicant's attendance policy;

(c) a copy of the applicant's curriculum which identifies the applicant's systematic course of instruction;

(d) for property, of any acreage, owned by a tribal corporation created for the sole purpose of establishing schools, colleges, and universities (a) through (c) must accompany the tribe's application; and

(e) if the applicant is a federally recognized tribe, a copy of the tribal resolution:

(i) identifying the fee land, by legal description, to be used exclusively for educational purposes;

(ii) stating the type of exemption the tribe is requesting; and

(iii) stating how the property qualifies for this type of exemption.

(11) For real property exemption applications where the applicant is requesting exemption of property used for nonprofit healthcare facilities, the following documents must accompany the application:

(a) a copy of the health care facility's license from the Department of Public Health and Human Services; or

(b) if the applicant is a federally recognized tribe, a copy of the tribal resolution:

(i) identifying the fee land, by legal description, to be used exclusively for health care services;

(ii) stating the type of exemption the tribe is requesting; and

(iii) stating how the property qualifies for this type of exemption.

(12) For real property exemption applications where the applicant is requesting exemption of property used solely in connection with a cemetery or cemeteries, the following documents must accompany the application:

(a) proof of a permanent care and improvement fund;

(b) verification that the entity is not operated for gain or profit; and

(c) if the applicant is a federally recognized tribe, a copy of the tribal resolution:

(i) identifying the fee land, by legal description, to be used exclusively as a cemetery or cemeteries;

(ii) stating the type of exemption the tribe is requesting; and

(iii) stating how the property qualifies for this type of exemption.

(13) For real property exemption applications submitting use for parks and recreational facilities, the following documents must accompany the applications:

(a) documentation verifying the park and/or recreational facility is open to the general public; or

(b) if a federally recognized tribe, a tribal resolution:

(i) identifying the fee land, by legal description, to be used exclusively for parks and recreational facilities;

(ii) including language stating the type of exemption the tribe is requesting; and

(iii) including language stating how the property qualifies for this type of exemption, not to exceed 640 acres.

(14) For real property exemption applications where the applicant is requesting an 8-year exemption for up to 15 acres of property owned by a purely public charity, as set forth in 15-6-201, MCA, the following apply:

(a) all documents in (4), (5), and (8) must be submitted with the application;

(b) the exemption applies to only the general taxes, not the special fees and assessment charges imposed by the local governments;

(c) upon the department's approval of the 8-year exemption, the department will file a notice of exemption with the clerk and recorder in the county where the property is located. The notice shall:

(i) indicate that the exemption has been granted;

(ii) describe the penalty for default; and

(iii) specify that default will create a lien on the property by operation of law;

(d) the department shall notify the applying entity that the application has been approved and a notice of exemption on the property has been filed with the county clerk and recorder;

(e) an organization granted an 8-year exemption must notify the department on an annual basis by March 1 whether the property has been placed into a public charitable use;

(f) if an organization has been granted the 8-year exemption the application stated in (1) does not extend the 8-year timeline;

(g) for property not used directly for the charitable purpose intended within the 8-year exemption period, or for property sold or transferred before it is entered into direct charitable use, the exemption is revoked and the property is taxable as follows. If the property:

(i) has completed the 8 years without being placed into a public charitable purpose, the tax will be calculated using the current year's ad valorem tax multiplied by 8 years; or

(ii) has been sold or the exemption status is revoked prior to the end of the 8-year period, the tax will be calculated using the current year's ad valorem tax multiplied by the number of years the property was exempt before the date of sale or revocation. For example, if the property was exempt for 4 years of the approved 8-year period, the tax will be the current year's ad valorem tax multiplied by 4; and

(h) upon default and removal of the 8-year exemption, the department will inform the county clerk and recorder that a lien was created on the property by operation of law, and inform the county treasurer that the lien on the property is being executed and that taxes will be due.

(15) For real property exemption applications where the applicant is requesting exemption for property used for low-income housing, as set forth in 15-6-221, MCA, all documents in (4), (5), and (8) must be submitted with the application and also include:

(a) documentation that the property is dedicated to providing affordable housing to low-income tenants;

(b) a copy of the IRS tax exemption status letter (if a limited partnership-general partner is a nonprofit corporation with an IRS 501(c)3 exemption);

(c) a copy of the Board of Housing letter allocating low-income tax credits;

(d) documentation that at least 20 percent of the residential units are rent-restricted and rented to tenants whose household incomes do not exceed 50 percent of the median family income for the county, and at least 40 percent of the residential units are rent-restricted to persons whose household incomes do not exceed 60 percent of the median income for the county;

(e) a copy of the deed or other legally binding document that restricts the property's usage;

(f) a letter stating that the property meets a public purpose in providing housing to an underserved population and provides a minimum of 50 percent of the units in the property to tenants at 50 percent of the median family income for the area, with rents restricted to a maximum of 30 percent of 50 percent of median family income;

(g) a copy of the owner's partnership or operating agreement or accompanying document providing that at the end of the compliance period, the ownership of the property may be transferred to the nonprofit corporation or housing authority general partner; and

(h) documentation, such as the hearing minutes or newspaper notification, that a public hearing was held to consider whether the property meets a community housing need.

(16) For real property exemption applications where the applicant is requesting exemption for property used by a veterans' society or organization, as set forth in 15-6-203, MCA, and the applicant is someone other than the society or organization, the applicant must include a copy of the lease that verifies the savings from the property tax exemption is realized by the society or organization. For tax year 2017 only, the deadline to submit an exemption application is December 31, 2017.

(17) Upon receipt of the application and supporting documents, the local department office will perform a field evaluation. The department will approve or deny the application and notify the applicant, the local department office, and the county treasurer of its decision in writing.

(18) If the property is owned by a governmental entity (such as city, county, or state), the federal government (unless Congress has passed legislation allowing the state to tax property owned by a federal entity), tribal government, nonprofit irrigation districts organized under Montana law, municipal corporations, public libraries, or rural fire districts and other entities providing fire protection under Title 7, chapter 33, MCA, the department will employ the following exemption criteria for real property when considering exemption claims based upon 15-6-201, MCA:

(a) the properties will be tax-exempt as of the purchase date that is reflected on the deed or security agreement;

(b) if a property is tax-exempt as of January 1 of the current tax year and is sold to a nonqualifying purchaser after January 1 of the current tax year, it becomes taxable upon the transfer of the property. The tax is prorated according to 15-16-203, MCA;

(c) if a property is tax-exempt, as stated in (14)(b), and is sold as tax-deed property to a nonqualifying purchaser after January 1 of the current tax year, it becomes taxable on January 1 following the execution of such contract or deed as provided in 7-8-2307, MCA; and

(d) if a tribal government is requesting an exemption of an essential government service, as provided by statute, that service must be identified in the application.

 

History: 15-1-201, MCA; IMP, 7-8-2307, 15-6-201, 15-6-203, 15-6-209, 15-6-216, 15-6-221, 15-6-233, 15-6-235, 15-6-311, 15-7-102, MCA; NEW, 1985 MAR p. 2019, Eff. 12/27/85; AMD, 1988 MAR p. 737, Eff. 4/15/88; AMD, 1990 MAR p. 1714, Eff. 8/31/90; AMD, 1991 MAR p. 2042, Eff. 11/1/91; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2012 MAR p. 627, Eff. 3/23/12; AMD, 2013 MAR p. 2446, Eff. 12/27/13; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2017 MAR p. 2090, Eff. 11/10/17.


 

 
MAR Notices Effective From Effective To History Notes
42-2-976 11/10/2017 Current History: 15-1-201, MCA; IMP, 7-8-2307, 15-6-201, 15-6-203, 15-6-209, 15-6-216, 15-6-221, 15-6-233, 15-6-235, 15-6-311, 15-7-102, MCA; NEW, 1985 MAR p. 2019, Eff. 12/27/85; AMD, 1988 MAR p. 737, Eff. 4/15/88; AMD, 1990 MAR p. 1714, Eff. 8/31/90; AMD, 1991 MAR p. 2042, Eff. 11/1/91; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2012 MAR p. 627, Eff. 3/23/12; AMD, 2013 MAR p. 2446, Eff. 12/27/13; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2017 MAR p. 2090, Eff. 11/10/17.
42-2-942 1/1/2016 11/10/2017 History: 15-1-201, 15-6-230, 15-6-231, MCA; IMP, 7-8-2307, 15-6-201, 15-6-203, 15-6-209, 15-6-216, 15-6-221, 15-6-230, 15-6-231, 15-6-233, 15-6-311, 15-7-102, MCA; NEW, 1985 MAR p. 2019, Eff. 12/27/85; AMD, 1988 MAR p. 737, Eff. 4/15/88; AMD, 1990 MAR p. 1714, Eff. 8/31/90; AMD, 1991 MAR p. 2042, Eff. 11/1/91; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2012 MAR p. 627, Eff. 3/23/12; AMD, 2013 MAR p. 2446, Eff. 12/27/13; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16.
42-2-924 12/12/2014 1/1/2016 History: 15-1-201, 15-6-230, MCA; IMP, 7-8-2307, 15-6-201, 15-6-203, 15-6-209, 15-6-211, 15-6-216, 15-6-221, 15-6-230, 15-7-102, MCA; NEW, 1985 MAR p. 2019, Eff. 12/27/85; AMD, 1988 MAR p. 737, Eff. 4/15/88; AMD, 1990 MAR p. 1714, Eff. 8/31/90; AMD, 1991 MAR p. 2042, Eff. 11/1/91; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2012 MAR p. 627, Eff. 3/23/12; AMD, 2013 MAR p. 2446, Eff. 12/27/13; AMD, 2014 MAR p. 2994, Eff. 12/12/14.
42-2-901 12/27/2013 12/12/2014 History: 15-1-201, 15-6-230, MCA; IMP, 7-8-2307, 15-6-201, 15-6-203, 15-6-209, 15-6-211, 15-6-216, 15-6-221, 15-6-230, 15-7-102, MCA; NEW, 1985 MAR p. 2019, Eff. 12/27/85; AMD, 1988 MAR p. 737, Eff. 4/15/88; AMD, 1990 MAR p. 1714, Eff. 8/31/90; AMD, 1991 MAR p. 2042, Eff. 11/1/91; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2012 MAR p. 627, Eff. 3/23/12; AMD, 2013 MAR p. 2446, Eff. 12/27/13.
42-2-873 3/23/2012 12/27/2013 History: 15-1-201, 15-6-230, MCA; IMP, 7-8-2307, 15-6-201, 15-6-203, 15-6-209, 15-6-211, 15-6-216, 15-6-221, 15-6-230, 15-7-102, MCA; NEW, 1985 MAR p. 2019, Eff. 12/27/85; AMD, 1988 MAR p. 737, Eff. 4/15/88; AMD, 1990 MAR p. 1714, Eff. 8/31/90; AMD, 1991 MAR p. 2042, Eff. 11/1/91; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2012 MAR p. 627, Eff. 3/23/12.
12/22/2006 3/23/2012 History: 15-1-201, MCA; IMP, 7-8-2307, 15-6-201, 15-6-203, 15-6-209, 15-7-102, MCA; NEW, 1985 MAR p. 2019, Eff. 12/27/85; AMD, 1988 MAR p. 737, Eff. 4/15/88; AMD, 1990 MAR p. 1714, Eff. 8/31/90; AMD, 1991 MAR p. 2042, Eff. 11/1/91; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06.
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