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Rule: 42.22.1312 Prev     Up     Next    
Rule Title: INDUSTRIAL MACHINERY AND EQUIPMENT DEPRECIATION SCHEDULE
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Department: REVENUE
Chapter: CENTRALLY ASSESSED PROPERTY
Subchapter: Market Value of Industrial Property
 
Latest version of the adopted rule presented in Administrative Rules of Montana (ARM):

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42.22.1312    INDUSTRIAL MACHINERY AND EQUIPMENT DEPRECIATION SCHEDULE

(1) The department will utilize the machinery and equipment depreciation schedule which is set forth in the following table. The depreciation schedule will be used to value industrial machinery and equipment for ad valorem tax purposes pursuant to ARM 42.22.1306.

 

MANUFACTURING MACHINERY AND EQUIPMENT PERCENT GOOD TABLE

 

Life Expectancy

 

(Age) 5 10 12 13 15 16 18 20
                 
1 85 92 94 94 95 95 96 97
2 69 84 87 88 90 91 93 93
3 52 76 80 82 85 86 89 90
4 34 67 73 75 79 80 83 86
5 20 58 66 69 73 74 78 82
6   49 58 62 68 69 74 78
7   39 50 54 62 64 68 74
8   30 43 47 55 57 63 70
9   24 36 41 49 52 59 65
10   20 29 34 43 46 53 60
11     24 29 37 40 47 55
12     20 24 31 34 42 50
13       20 26 29 36 45
14         23 26 32 40
15         20 23 28 35
16           20 25 31
17             22 27
18             20 24
19               22
20               20

 

(2) The department will utilize the depreciation schedules set forth above as reflected in the following example:

 

EXAMPLE

The Trending/Depreciation Procedure

 

In order to use the economic age-life method to value machinery and equipment, several steps must be followed.

1. Determine the economic life of the subject industry.

2. Acquire a set of reasonable trends for that economic life.

3. Acquire the original installed cost (direct and indirect) for the subject equipment.

4. Apply the appropriate trend factor to the original installed cost to determine replacement cost new (RCN) .

5. Depreciate the RCN on the basis of age to arrive at sound value.

 

Example:

 

Industry - Sawmill

Economic life - 10 years

2013 Table - Table 18

Case

III

Equipment - Motor

Original Installed Cost

$ 200$ 100

Year Installed

20051987

 

Case I

Case II

Cost$ 200Cost$ 100
x Trend1.215x Trend1.352*
RCN$ 243RCN$ 135
x % Good.30x % Good.20
Sound Value$ 73Sound Value$ 27

 

*The trending factor is applied only to the last year of the economic life. Although the equipment is more than 20 years old, it is trended by the 10th year trend.

History: 15-1-201, MCA; IMP, 15-6-135, 15-6-138, 15-6-156, 15-6-157, 15-6-158, 15-8-111, MCA; NEW, 1986 MAR p. 2074, Eff. 12/27/86; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1993 MAR p. 3062, Eff. 12/24/93; AMD, 1994 MAR p. 3197, Eff. 12/23/94; AMD, 1996 MAR p. 162, Eff. 1/12/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3318, Eff. 12/18/98; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2015 MAR p. 2149, Eff. 12/11/15.


 

 
MAR Notices Effective From Effective To History Notes
42-2-940 12/11/2015 Current History: 15-1-201, MCA; IMP, 15-6-135, 15-6-138, 15-6-156, 15-6-157, 15-6-158, 15-8-111, MCA; NEW, 1986 MAR p. 2074, Eff. 12/27/86; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1993 MAR p. 3062, Eff. 12/24/93; AMD, 1994 MAR p. 3197, Eff. 12/23/94; AMD, 1996 MAR p. 162, Eff. 1/12/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3318, Eff. 12/18/98; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2015 MAR p. 2149, Eff. 12/11/15.
42-2-883 12/7/2012 12/11/2015 History: 15-1-201, MCA; IMP, 15-6-138, 15-6-156, 15-8-111, MCA; NEW, 1986 MAR p. 2074, Eff. 12/27/86; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1993 MAR p. 3062, Eff. 12/24/93; AMD, 1994 MAR p. 3197, Eff. 12/23/94; AMD, 1996 MAR p. 162, Eff. 1/12/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3318, Eff. 12/18/98; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2012 MAR p. 2496, Eff. 12/7/12.
12/25/2003 12/7/2012 History: 15-1-201, MCA; IMP, 15-6-138, 15-6-156, 15-8-111, MCA; NEW, 1986 MAR p. 2074, Eff. 12/27/86; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1993 MAR p. 3062, Eff. 12/24/93; AMD, 1994 MAR p. 3197, Eff. 12/23/94; AMD, 1996 MAR p. 162, Eff. 1/12/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3318, Eff. 12/18/98; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2003 MAR p. 2901, Eff. 12/25/03.
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