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Montana Administrative Register Notice 42-2-883 No. 19   10/11/2012    
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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, 42.22.1307, 42.22.1308, 42.22.1311, and 42.22.1312 related to the trended depreciation schedules for valuing property

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

TO: All Concerned Persons

 

1. On November 14, 2012, at 1:30 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 p.m., October 26, 2012, 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 15-6-202(4) or 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

2011

70%

2010

41%

2009

18%

2008 and older

8%

   

2012

70%

2011

41%

2010

17%

2009 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

2011

85%

2010

69%

2009

50%

2008

35%

2007 and older

21%

 

2012

85%

2011

70%

2010

53%

2009

33%

2008 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

2011

92%

2010

85%

2009

77%

2008

72%

2007

64%

2006

56%

2005

46%

2004

36%

2003

29%

2002 and older

25%

 

2012

92%

2011

86%

2010

79%

2009

70%

2008

64%

2007

56%

2006

45%

2005

36%

2004

30%

2003 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

2011

80%

2010

65%

2009

58%

2008

51%

2007

45%

2006

42%

2005

35%

2004

31%

2003

30%

2002

30%

2001

26%

2000

23%

1999

19%

1998

20%

1997

19%

1996

20%

1995

15%

1994

16%

1993 and older

16%

 

2013

80%

2012

65%

2011

59%

2010

56%

2009

48%

2008

44%

2007

43%

2006

37%

2005

33%

2004

31%

2003

29%

2002

27%

2001

23%

2000

23%

1999

19%

1998

20%

1997

20%

1996

20%

1995

16%

1994 and older

16%

 

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

 

YEAR NEW/ACQUIRED

TRENDED % GOOD

2011

25%

2010

15%

2009 and older

10%

 

2012

25%

2011

15%

2010 and older

10%

 

(2) For all other leased property that is not rented on an hourly, daily, weekly,semimonthly, or monthly basis, the valuation procedures shall be the same as other like personal property.

(3) When a special mobile permit (SM plate), as defined in 61-4-101(66), MCA, is purchased for lease or rental equipment, the equipment will be classified and valued the same as other SM equipment in class eight.

(4) All leased and rental property not exempt under 15-6-202(4) or 15-6-219(5) or 15-6-202(4), MCA, will be assessed and taxed as class eight property.

(5) This rule is effective for tax years beginning after December 31, 2011 2012.

 

AUTH: 15-1-201, 15-23-108, MCA

IMP: 15-6-135, 15-6-138, 15-6-202, 15-6-207, 15-6-219, MCA

 

REASONABLE NECESSITY: The department determines the market value of personal property by using the guides and valuation manuals listed in its rules and then applying the trended depreciation schedules as published in its rules. Personal property is valued annually, and because the trend tables used to value personal property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process.

The annual update to the trended depreciation schedules provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

Therefore, the department proposes to amend ARM 42.21.113, to update the trended depreciation schedules in the rule.

The department further proposes to amend the rule to correct the numerical order of the statutes referenced in (1) and (4), and to update the implementing citations to include 15-6-202, MCA.

 

     42.21.123 FARM MACHINERY AND EQUIPMENT (1) through (7) remain the same.

(8) The trended depreciation schedule referred to in (2) through (6) is listed below and shall be used for tax year 2012 2013. The schedule is derived by using the guidebook listed in (2) 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

2012

80%

2011

75%

2010

68%

2009

63%

2008

62%

2007

58%

2006

54%

2005

49%

2004

48%

2003

43%

2002

38%

2001

35%

2000

33%

1999

30%

1998

29%

1997

28%

1996 and older

23%

 

2013

80%

2012

75%

2011

68%

2010

65%

2009

58%

2008

56%

2007

54%

2006

51%

2005

47%

2004

45%

2003

41%

2002

36%

2001

33%

2000

31%

1999

28%

1998

29%

1997 and older

22%

 

(9) remains the same.

(10) This rule is effective for tax years beginning after December 31, 2011 2012.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, MCA

 

REASONABLE NECESSITY: The department determines the market value of personal property by using the guides and valuation manuals listed in its rules and then applying the trended depreciation schedules as published in its rules. Personal property is valued annually, and because the trend tables used to value personal property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process.

The annual update to the trended depreciation schedules provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

Therefore, the department proposes to amend ARM 42.21.123, to update the trended depreciation schedule in the rule.

 

     42.21.131 HEAVY EQUIPMENT (1) remains the same.

(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 & Swift Valuation Service Manual Guide for the year of assessment. The Marshall & Swift Valuation Service Manual Guide, 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) and (4) remain the same.

(5) The trended depreciation schedule referred to in (2), (3), and (4) is listed below and shall be used for tax year 2012 2013. 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

2012

80%

2011

65%

2010

58%

2009

51%

2008

45%

2007

42%

2006

35%

2005

31%

2004

30%

2003

30%

2002

26%

2001

23%

2000

19%

1999

20%

1998

19%

1997

20%

1996

15%

1995

16%

1994

16%

1993 and older

16%

 

2013

80%

2012

65%

2011

59%

2010

56%

2009

48%

2008

44%

2007

43%

2006

37%

2005

33%

2004

31%

2003

29%

2002

27%

2001

23%

2000

23%

1999

19%

1998

20%

1997

20%

1996

20%

1995

16%

1994 and older

16%

 

(6) This rule is effective for tax years beginning after December 31, 2011 2012, 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, MCA

 

REASONABLE NECESSITY: The department determines the market value of personal property by using the guides and valuation manuals listed in its rules and then applying the trended depreciation schedules as published in its rules. Personal property is valued annually, and because the trend tables used to value personal property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process.

The annual update to the trended depreciation schedules provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

Therefore, the department proposes to amend ARM 42.21.131, to update the trended depreciation schedule in the rule.

The department further proposes to amend the rule to revise the title of the appraisal guide being referenced in (2), in order to provide consistency throughout the trended depreciation rules in Title 42.

 

     42.21.137 SEISMOGRAPH UNITS AND ALLIED EQUIPMENT (1) remains the same.

(2) The department shall prepare a five-year trended depreciation schedule for seismograph units and a five-year trended depreciation schedule for all other allied seismograph equipment. Trend factors and depreciation factors published by "Marshall and Swift Publication Company" in the Marshall & Swift Valuation Service Guide will be used to develop the trended depreciation schedules. The trend factors shall be the most recent available from the "Chemical Industry Cost Indexes" listed in the above publication. The "% good" for seismograph units and other allied seismograph equipment less than one year old shall be 100 percent and the "% good" for equipment shall be 5 percent if acquired in 2005 and prior.

(3) remains the same.

(4) The trended depreciation schedules referred to in (1) through (3) are listed below and shall be used for tax year 2012 2013.

 

SEISMOGRAPH UNIT

 

YEAR NEW/ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

WHOLESALE FACTOR

WHOLESALE % GOOD

2012

100%

1.000

100%

80%

80%

2011

85%

1.000

85%

80%

68%

2010

69%

1.021

70%

80%

56%

2009

52%

1.006

52%

80%

42%

2008

34%

1.042

35%

80%

28%

2007

23%

1.089

25%

80%

20%

2006

20%

1.53

23%

80%

18%

2005 and older

5%

     

5%

 

2013

100%

1.000

100%

80%

80%

2012

85%

1.000

85%

80%

68%

2011

69%

1.026

71%

80%

57%

2010

52%

1.054

55%

80%

44%

2009

34%

1.039

35%

80%

28%

2008

23%

1.076

25%

80%

20%

2007-2006

20%

1.124

22%

80%

18%

2005 and older

5%

     

5%

 

SEISMOGRAPH ALLIED EQUIPMENT

 

YEAR NEW/
ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2012

100%

1.000

100%

2011

85%

1.000

85%

2010

69%

1.021

70%

2009

52%

1.006

52%

2008

34%

1.042

35%

2007

23%

1.089

25%

2006

20%

1.153

23%

2005 and older

5%

 

5%

 

2013

100%

1.000

100%

2012

85%

1.000

85%

2011

69%

1.026

71%

2010

52%

1.054

55%

2009

34%

1.039

35%

2008

23%

1.076

25%

2007-2006

20%

1.124

22%

2005 and older

5%

 

5%

 

(5) This rule is effective for tax years beginning after December 31, 2011 2012.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, MCA

 

REASONABLE NECESSITY: The department determines the market value of personal property by using the guides and valuation manuals listed in its rules and then applying the trended depreciation schedules as published in its rules. Personal property is valued annually, and because the trend tables used to value personal property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process.

The annual update to the trended depreciation schedules provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

Therefore, the department proposes to amend ARM 42.21.137, to update the trended depreciation schedules in the rule.

The department further proposes to amend the rule to revise the title of the appraisal guide being referenced in (2), in order to provide consistency throughout the trended depreciation rules in Title 42.

 

     42.21.138 OIL AND GAS FIELD MACHINERY AND EQUIPMENT

(1) remains the same.

(2) The department shall prepare a 15-year trended depreciation schedule for oil and gas field machinery and equipment. Trend factors and depreciation factors published by "Marshall and Swift Publication Company" in the Marshall & Swift Valuation Service Guide will be used to develop the trended depreciation schedules. The trend factors shall be the most recent available.

(3) The trended depreciation schedule referred to in (1) and (2) is listed below and shall be used for tax year 2012 2013.

 

OIL AND GAS FIELD PRODUCTION
EQUIPMENT TRENDED DEPRECIATION SCHEDULE

 

YEAR NEW/ ACQUIRED

% GOOD

TREND FACTOR

TRENDED % GOOD

2012

100%

1.000

100%

2011

95%

1.000

95%

2010

90%

1.021

92%

2009

85%

1.006

86%

2008

79%

1.042

82%

2007

73%

1.089

79%

2006

68%

1.153

78%

2005

62%

1.211

75%

2004

55%

1.314

72%

2003

49%

1.360

67%

2002

43%

1.387

60%

2001

37%

1.395

52%

2000

31%

1.408

44%

1999

26%

1.431

37%

1998

23%

1.438

33%

1997 and older

20%

1.453

29%

 

2013

100%

1.000

100%

2012

95%

1.000

95%

2011

90%

1.026

92%

2010

85%

1.054

90%

2009

79%

1.039

82%

2008

73%

1.076

79%

2007

68%

1.124

76%

2006

62%

1.191

74%

2005

55%

1.251

69%

2004

49%

1.357

66%

2003

43%

1.404

60%

2002

37%

1.433

53%

2001

31%

1.441

45%

2000

26%

1.454

38%

1999

23%

1.478

34%

1998 and older

20%

1.485

30%

 

(4) and (5) remain the same.

(6) This rule is effective for tax years beginning after December 31, 2011 2012.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-213, 15-6-219, MCA

 

REASONABLE NECESSITY: The department determines the market value of personal property by using the guides and valuation manuals listed in its rules and then applying the trended depreciation schedules as published in its rules. Personal property is valued annually, and because the trend tables used to value personal property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process.

The annual update to the trended depreciation schedules provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

Therefore, the department proposes to amend ARM 42.21.138, to update the trended depreciation schedule in the rule.

The department further proposes to amend the rule to revise the title of the appraisal guide being referenced in (2), in order to provide consistency throughout the trended depreciation rules in Title 42.

 

     42.21.139 WORK-OVER AND SERVICE RIGS (1) remains the same.

(2) The department shall prepare a ten-year trended depreciation schedule for work-over and service rigs. The trended depreciation schedule shall be derived from depreciation factors published by "Marshall and Swift Publication Company" in the Marshall & Swift Valuation Service Guide. The "% good" for work-over and service rigs less than one year old shall be 100 percent.

(3) and (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 2012 2013.

 

SERVICE AND WORKOVER RIG TRENDED DEPRECIATION SCHEDULE

 

YEAR/NEW ACQUIRED

% GOOD

TREND FACTOR

WHOLESALE FACTOR

TRENDED WHOLESALE % GOOD

2012

100%

1.000

80%

80%

2011

92%

1.000

80%

74%

2010

84%

1.021

80%

69%

2009

76%

1.006

80%

61%

2008

67%

1.042

80%

56%

2007

58%

1.089

80%

51%

2006

49%

1.153

80%

45%

2005

39%

1.211

80%

38%

2004

30%

1.314

80%

32%

2003

24%

1.360

80%

26%

2002 and older

20%

1.387

80%

22%

 

2013

100%

1.000

80%

80%

2012

92%

1.000

80%

74%

2011

84%

1.026

80%

69%

2010

76%

1.054

80%

64%

2009

67%

1.039

80%

56%

2008

58%

1.076

80%

50%

2007

49%

1.124

80%

44%

2006

39%

1.191

80%

37%

2005

30%

1.251

80%

30%

2004

24%

1.357

80%

26%

2003 and older

20%

1.404

80%

22%

 

(6) This rule is effective for tax years beginning after December 31, 2011 2012.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-219, MCA

 

REASONABLE NECESSITY: The department determines the market value of personal property by using the guides and valuation manuals listed in its rules and then applying the trended depreciation schedules as published in its rules. Personal property is valued annually, and because the trend tables used to value personal property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process.

The annual update to the trended depreciation schedules provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

Therefore, the department proposes to amend ARM 42.21.139, to update the trended depreciation schedule in the rule.

The department further proposes to amend the rule to revise the title of the appraisal guide being referenced in (2), in order to provide consistency throughout the trended depreciation rules in Title 42.

 

     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 Companyin the Marshall & Swift Valuation Service Guide. The "% good" for all drill rigs less than one year old shall be 100 percent. The trended depreciation schedule for tax year 2012 2013 is listed below.

 

DRILL RIG TRENDED DEPRECIATION SCHEDULE

 

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2012

100%

1.000

100%

2011

92%

1.000

92%

2010

84%

1.021

86%

2009

76%

1.006

76%

2008

67%

1.042

70%

2007

58%

1.089

63%

2006

49%

1.153

57%

2005

39%

1.211

47%

2004

30%

1.314

39%

2003

24%

1.360

33%

2002 and older

20%

1.387

28%

 

2013

100%

1.000

100%

2012

92%

1.000

92%

2011

84%

1.026

86%

2010

76%

1.054

80%

2009

67%

1.039

70%

2008

58%

1.076

62%

2007

49%

1.124

55%

2006

39%

1.191

46%

2005

30%

1.251

38%

2004

24%

1.357

33%

2003 and older

20%

1.404

28%

 

(3) remains the same.

(4) This rule is effective for tax years beginning after December 31, 2011 2012.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, MCA

 

REASONABLE NECESSITY: The department determines the market value of personal property by using the guides and valuation manuals listed in its rules and then applying the trended depreciation schedules as published in its rules. Personal property is valued annually, and because the trend tables used to value personal property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process.

The annual update to the trended depreciation schedules provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

Therefore, the department proposes to amend ARM 42.21.140, to update the trended depreciation schedule in the rule.

The department further proposes to amend the rule to revise the title of the appraisal guide being referenced in (2), in order to provide consistency throughout the trended depreciation rules in Title 42.

 

     42.21.151 TELEVISION CABLE SYSTEMS (1) remains the same.

(2) The average market value for the dishes and towers will be determined by using a five-year trended depreciation schedule on dishes and ten-year trended depreciation schedule on towers. Both the trend factors and the depreciation tables will be derived from the Marshall & Swift Valuation Service Guide, as published by the Marshall and Swift Publication Company, 915 Wilshire Boulevard, 8th Floor, P.O. Box 26307, Los Angeles, California 90026-0307. The trend factors shall be the most recent available from the "Average of all Indexes" listed in the above publication.

(3) remains the same.

     (4) The trended depreciation schedules referred to in (2) and (3) are listed below and shall be in effect for tax year 2012 2013.

 

TABLE 1: FIVE-YEAR "DISHES"

 

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2011

85%

1.000

85%

2010

69%

1.025

71%

2009

52%

1.017

53%

2008

34%

1.046

36%

2007 and older

20%

1.087

22%

       

2012

85%

1.000

85%

2011

69%

1.027

71%

2010

52%

1.059

55%

2009

34%

1.051

36%

2008 and older

20%

1.082

22%

 

TABLE 2: TEN-YEAR "TOWERS"

 

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2011

92%

1.000

92%

2010

84%

1.025

86%

2009

76%

1.017

77%

2008

67%

1.046

70%

2007

58%

1.087

63%

2006

49%

1.147

56%

2005

39%

1.200

47%

2004

30%

1.290

39%

2003

24%

1.335

32%

2002 and older

20%

1.357

27%

 

2012

92%

1.000

92%

2011

84%

1.027

86%

2010

76%

1.059

81%

2009

67%

1.051

70%

2008

58%

1.082

63%

2007

49%

1.124

55%

2006

39%

1.186

46%

2005

30%

1.241

37%

2004

24%

1.334

32%

2003 and older

20%

1.380

28%

 

(5) This rule is effective for tax years beginning after December 31, 2011 2012.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, MCA

 

REASONABLE NECESSITY: The department determines the market value of personal property by using the guides and valuation manuals listed in its rules and then applying the trended depreciation schedules as published in its rules. Personal property is valued annually, and because the trend tables used to value personal property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process.

The annual update to the trended depreciation schedules provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

Therefore, the department proposes to amend ARM 42.2.151, to update the trended depreciation schedules in the rule.

The department further proposes to amend the rule to revise the title of the appraisal guide being referenced in (2), in order to provide consistency throughout the trended depreciation rules in Title 42.

 

     42.21.153 SKI LIFT EQUIPMENT (1) remains the same.

(2) The "average of all" industry trend factors as indicated by the Marshall & Swift Valuation Service Guide shall be used.

(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

2011

92%

1.000

92%

2010

84%

1.025

86%

2009

76%

1.017

77%

2008

67%

1.046

70%

2007

58%

1.087

63%

2006

49%

1.147

56%

2005

39%

1.200

47%

2004

30%

1.290

39%

2003

24%

1.335

32%

2002 and older

20%

1.357

27%

 

2012

92%

1.000

92%

2011

84%

1.027

86%

2010

76%

1.059

81%

2009

67%

1.051

70%

2008

58%

1.082

63%

2007

49%

1.124

55%

2006

39%

1.186

46%

2005

30%

1.241

37%

2004

24%

1.334

32%

2003 and older

20%

1.380

28%

 

(a) through (b)(i) remain the same.

(4) This methodology is effective for tax years beginning after December 31, 2011 2012.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, MCA

 

REASONABLE NECESSITY: The department determines the market value of personal property by using the guides and valuation manuals listed in its rules and then applying the trended depreciation schedules as published in its rules. Personal property is valued annually, and because the trend tables used to value personal property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process.

The annual update to the trended depreciation schedules provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

Therefore, the department proposes to amend ARM 42.21.153, to update the trended depreciation schedule in the rule.

The department further proposes to amend the rule to revise the title of the appraisal guide being referenced in (2), in order to provide consistency throughout the trended depreciation rules in Title 42.

 

     42.21.155 DEPRECIATION SCHEDULES (1) Trended depreciation schedules of four, five, and ten years have been established for each category of property. The number of years corresponds to the useful life of the property taking into account physical obsolescence. The trended depreciation schedules reflect the remaining life of the property over the term of years assigned with a 5 percent to 20 percent residual. The five- and ten-year depreciation schedules "% good" numbers were extracted from the Marshall and Swift PublicationMarshall & Swift Valuation Service Guide, "Fixtures and Equipment Table." The four-year table was derived from consultation with industry representatives. "Remaining Life" is a form of depreciation.

     (2) The trended depreciation schedules for tax year 2012 2013 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

2011

70%

1.000

70%

2010

45%

0.917

41%

2009

20%

0.884

18%

2008 and older

10%

0.824

8%

       

2012

70%

1.000

70%

2011

45%

0.916

41%

2010

20%

0.843

17%

2009 and older

10%

0.813

8%

 

CATEGORY 2

       

YEAR NEW/
ACQUIRED

% GOOD

TREND
FACTOR

TRENDED
% GOOD

2011

85%

1.000

85%

2010

69%

1.004

69%

2009

52%

0.961

50%

2008

34%

1.039

35%

2007 and older

20%

1.062

21%

       

2012

85%

1.000

85%

2011

69%

1.013

70%

2010

52%

1.018

53%

2009

34%

0.974

33%

2008 and older

20%

1.053

21%

 

CATEGORY 3

       

YEAR NEW/

 

TREND

TRENDED

ACQUIRED

% GOOD

FACTOR

% GOOD

2011

85%

1.000

85%

2010

69%

0.964

67%

2009

52%

0.947

49%

2008

34%

0.915

31%

2007 and older

20%

0.826

17%

 

2012

85%

1.000

85%

2011

69%

0.971

67%

2010

52%

0.937

49%

2009

34%

0.920

31%

2008 and older

20%

0.889

18%

 

CATEGORY 4

       

YEAR NEW/

 

TREND

TRENDED

ACQUIRED

% GOOD

FACTOR

% GOOD

2011

85%

1.000

85%

2010

69%

0.988

68%

2009

52%

0.978

51%

2008

34%

0.965

33%

2007 and older

20%

0.945

19%

       

2012

85%

1.000

85%

2011

69%

0.997

69%

2010

52%

0.984

51%

2009

34%

0.973

33%

2008 and older

20%

0.961

19%

 

CATEGORY 5

       

YEAR NEW/

 

TREND

TRENDED

ACQUIRED

% GOOD

FACTOR

% GOOD

2011

85%

1.000

85%

2010

69%

1.009

70%

2009

52%

1.014

53%

2008

34%

1.058

36%

2007 and older

20%

1.073

21%

       

2012

85%

1.000

85%

2011

69%

1.030

71%

2010

52%

1.039

54%

2009

34%

1.044

36%

2008 and older

20%

1.090

22%

 

CATEGORY 6

       

YEAR NEW/

 

TREND

TRENDED

ACQUIRED

% GOOD

FACTOR

% GOOD

2011

85%

1.000

85%

2010

69%

1.025

71%

2009

52%

1.044

54%

2008

34%

1.049

36%

2007 and older

20%

1.080

22%

 

2012

85%

1.000

85%

2011

69%

1.023

71%

2010

52%

1.058

55%

2009

34%

1.078

37%

2008 and older

20%

1.082

22%

 

CATEGORY 7

       

YEAR NEW/

 

TREND

TRENDED

ACQUIRED

% GOOD

FACTOR

% GOOD

2011

92%

1.000

92%

2010

84%

1.016

85%

2009

76%

1.010

77%

2008

67%

1.042

70%

2007

58%

1.061

62%

2006

49%

1.084

53%

2005

39%

1.117

44%

2004

30%

1.146

34%

2003

24%

1.151

28%

2002 and older

20%

1.150

23%

 

2012

92%

1.000

92%

2011

84%

1.030

87%

2010

76%

1.047

80%

2009

67%

1.041

70%

2008

58%

1.074

62%

2007

49%

1.093

54%

2006

39%

1.117

44%

2005

30%

1.151

35%

2004

24%

1.181

28%

2003 and older

20%

1.186

24%

 

CATEGORY 8

       

YEAR NEW/

 

TREND

TRENDED

ACQUIRED

% GOOD

FACTOR

% GOOD

2011

92%

1.000

92%

2010

84%

1.011

85%

2009

76%

1.016

77%

2008

67%

1.080

72%

2007

58%

1.103

64%

2006

49%

1.135

56%

2005

39%

1.171

46%

2004

30%

1.216

36%

2003

24%

1.226

29%

2002 and older

20%

1.237

25%

 

2012

92%

1.000

92%

2011

84%

1.029

86%

2010

76%

1.039

79%

2009

67%

1.043

70%

2008

58%

1.109

64%

2007

49%

1.133

56%

2006

39%

1.165

45%

2005

30%

1.203

36%

2004

24%

1.249

30%

2003 and older

20%

1.259

25%

 

(3) This rule is effective for tax years beginning after December 31, 2011 2012.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, MCA

 

REASONABLE NECESSITY: The department determines the market value of personal property by using the guides and valuation manuals listed in its rules and then applying the trended depreciation schedules as published in its rules. Personal property is valued annually, and because the trend tables used to value personal property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process.

The annual update to the trended depreciation schedules provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

Therefore, the department proposes to amend ARM 42.21.155, to update the trended depreciation schedules in the rule.

The department further proposes to amend the rule to revise the title of the appraisal guide being referenced in (1), in order to provide consistency throughout the trended depreciation rules in Title 42.

 

     42.22.1307 TREND FACTORS (1) The trending factors for all property other than land or improvements to land shall be published annually by the department. These factors will be taken from the Marshall & Swift Valuation Service Guide except in those instances when the taxpayer can demonstrate to the department that another source of information will provide a more reliable indication of replacement/reproduction cost and thus the resulting "market value" for the industry as a whole.

 

AUTH: 15-1-201, MCA

IMP: 15-8-111, MCA

 

REASONABLE NECESSITY: The department proposes to amend ARM 42.22.1307 to revise the title of the appraisal guide being referenced, in order to provide consistency throughout the trended depreciation rules in Title 42.

 

     42.22.1308 DEPRECIATION SCHEDULES (1) Depreciation schedules for all property, other than land or improvements to land, shall be published annually by the department. These depreciation schedules will be an expanded version of the depreciation schedule provided by the Marshall & Swift Valuation Service Guide. These depreciation rates will normally compensate for the loss in value due to ordinary wear and tear, offset by reasonable maintenance, and ordinary functional obsolescence due to technological changes within the process during the life expectancy period.

 

AUTH: 15-1-201, MCA

IMP: 15-8-111, MCA

 

REASONABLE NECESSITY: The department proposes to amend ARM 42.22.1308 to revise the title of the appraisal guide being referenced, in order to provide consistency throughout the trended depreciation rules in Title 42.

 

     42.22.1311 INDUSTRIAL MACHINERY AND EQUIPMENT TREND FACTORS (1) The trend factors will be used to value industrial machinery and equipment for ad valorem tax purposes pursuant to ARM 42.22.1306. The department uses annual cost indexes from the Marshall & Swift Valuation Service Guide. The current index is divided by the annual index for each year to arrive at a trending factor. Each major industry has its own trend table. Where no index existed in the Marshall & Swift Valuation Service Guide for a particular industry, that industry was grouped with other industries using similar equipment. The department will utilize the machinery and equipment trend factors that are set forth in the following tables:

(2) Life expectancies for industrial machinery and equipment are shown in the trend table below.

 

2006 2013 INDUSTRIAL MACHINERY AND EQUIPMENT TREND FACTORS

(a) through (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.

2011

1.000

1.000

1.000

1.000

1.000

2010

1.029

1.026

1.026

1.022

1.025

2009

1.012

1.018

1.016

1.015

1.019

2008

1.041

1.043

1.042

1.044

1.044

2007

1.084

1.085

1.088

1.091

1.086

2006

1.144

1.162

1.153

1.156

1.166

2005

1.203

1.215

1.213

1.215

1.219

2004

1.303

1.307

1.315

1.313

1.310

2003

1.352

1.356

1.363

1.358

1.358

2002

1.377

1.379

1.388

1.382

1.381

2001

1.382

1.388

1.394

1.391

1.389

2000

1.392

1.404

1.407

1.406

1.406

1999

1.417

1.432

1.434

1.432

1.433

1998

1.419

1.437

1.437

1.440

1.438

1997

1.430

1.451

1.447

1.454

1.454

1996

1.447

1.476

1.470

1.478

1.480

1995

1.467

1.498

1.492

1.506

1.503

1994

1.525

1.560

1.551

1.562

1.565

1993

1.565

1.608

1.592

1.599

1.613

1992

1.589

1.638

1.618

1.624

1.643

2012

1.000

1.000

1.000

1.000

1.000

2011

1.029

1.027

1.027

1.025

1.027

2010

1.068

1.060

1.060

1.053

1.060

2009

1.050

1.052

1.050

1.047

1.054

2008

1.080

1.078

1.077

1.077

1.079

2007

1.124

1.121

1.125

1.125

1.123

2006

1.187

1.201

1.192

1.192

1.205

2005

1.248

1.256

1.254

1.253

1.260

2004

1.352

1.351

1.359

1.354

1.355

2003

1.403

1.402

1.409

1.400

1.403

2002

1.429

1.426

1.434

1.425

1.427

2001

1.434

1.435

1.441

1.434

1.436

2000

1.444

1.451

1.454

1.450

1.453

1999

1.470

1.480

1.482

1.477

1.482

1998

1.472

1.485

1.485

1.485

1.487

1997

1.483

1.500

1.496

1.499

1.503

1996

1.501

1.526

1.519

1.524

1.530

1995

1.522

1.549

1.542

1.552

1.554

1994

1.582

1.612

1.603

1.611

1.618

1993

1.623

1.662

1.646

1.649

1.668

YEAR

TABLE 6

TABLE 7

TABLE 8

TABLE 9

TABLE 10

 

Cement Mfg.

Chemical Mfg.

Clay Mfg.

Contractor Eq.

Creamery/Dairy

2011

1.000

1.000

1.000

1.000

1.000

2010

1.021

1.021

1.023

1.022

1.025

2009

1.008

1.006

1.015

1.018

1.021

2008

1.054

1.042

1.062

1.049

1.044

2007

1.101

1.089

1.107

1.082

1.088

2006

1.158

1.153

1.167

1.120

1.164

2005

1.215

1.211

1.222

1.171

1.222

2004

1.321

1.314

1.320

1.251

1.315

2003

1.374

1.360

1.367

1.287

1.361

2002

1.402

1.387

1.394

1.307

1.383

2001

1.411

1.395

1.404

1.317

1.393

2000

1.424

1.408

1.419

1.325

1.408

1999

1.448

1.431

1.443

1.348

1.437

1998

1.454

1.438

1.448

1.359

1.443

1997

1.470

1.453

1.463

1.374

1.457

1996

1.488

1.472

1.486

1.401

1.482

1995

1.515

1.500

1.514

1.424

1.508

1994

1.569

1.556

1.566

1.463

1.571

1993

1.604

1.588

1.603

1.500

1.614

1992

1.629

1.608

1.632

1.541

1.640

2012

1.000

1.000

1.000

1.000

1.000

2011

1.032

1.026

1.030

1.030

1.026

2010

1.061

1.054

1.061

1.060

1.059

2009

1.047

1.039

1.053

1.056

1.055

2008

1.095

1.076

1.102

1.087

1.078

2007

1.143

1.124

1.149

1.122

1.124

2006

1.203

1.191

1.211

1.161

1.203

2005

1.263

1.251

1.268

1.214

1.263

2004

1.373

1.357

1.369

1.296

1.359

2003

1.427

1.404

1.418

1.334

1.406

2002

1.456

1.433

1.446

1.355

1.429

2001

1.465

1.441

1.456

1.365

1.439

2000

1.480

1.454

1.472

1.373

1.455

1999

1.504

1.478

1.497

1.397

1.484

1998

1.511

1.485

1.502

1.409

1.490

1997

1.527

1.501

1.518

1.425

1.505

1996

1.546

1.520

1.541

1.453

1.531

1995

1.574

1.549

1.571

1.476

1.558

1994

1.630

1.607

1.625

1.517

1.623

1993

1.666

1.639

1.663

1.555

1.667

YEAR

TABLE 11

TABLE 12

TABLE 13

TABLE 14

TABLE15

 

Elec. Pwr. Eq.

Elec. Eq. Mfg.

Cannery/Fish

Flour, Cer. Feed

Cannery/Fruit

2011

1.000

1.000

1.000

1.000

1.000

2010

1.046

1.039

1.026

1.026

1.026

2009

1.037

1.025

1.016

1.017

1.021

2008

1.041

1.042

1.043

1.044

1.042

2007

1.099

1.093

1.085

1.089

1.081

2006

1.189

1.169

1.163

1.160

1.151

2005

1.276

1.241

1.215

1.219

1.202

2004

1.396

1.353

1.310

1.316

1.288

2003

1.460

1.410

1.360

1.364

1.336

2002

1.484

1.434

1.384

1.387

1.358

2001

1.478

1.433

1.394

1.395

1.367

2000

1.489

1.443

1.408

1.410

1.381

1999

1.519

1.469

1.436

1.438

1.410

1998

1.511

1.464

1.441

1.444

1.415

1997

1.514

1.471

1.456

1.458

1.428

1996

1.522

1.484

1.482

1.480

1.457

1995

1.535

1.501

1.504

1.504

1.476

1994

1.616

1.573

1.566

1.564

1.532

1993

1.649

1.611

1.616

1.606

1.585

1992

1.660

1.628

1.648

1.632

1.622

2012

1.000

1.000

1.000

1.000

1.000

2011

1.025

1.027

1.028

1.028

1.026

2010

1.081

1.077

1.061

1.061

1.059

2009

1.073

1.063

1.052

1.052

1.055

2008

1.077

1.080

1.080

1.080

1.076

2007

1.136

1.133

1.123

1.126

1.116

2006

1.230

1.212

1.203

1.200

1.189

2005

1.320

1.287

1.258

1.261

1.241

2004

1.444

1.402

1.356

1.361

1.331

2003

1.510

1.462

1.407

1.411

1.380

2002

1.535

1.487

1.432

1.435

1.402

2001

1.529

1.485

1.442

1.443

1.412

2000

1.540

1.496

1.457

1.458

1.427

1999

1.571

1.523

1.487

1.488

1.456

1998

1.563

1.518

1.491

1.494

1.461

1997

1.566

1.525

1.506

1.508

1.475

1996

1.575

1.539

1.534

1.531

1.505

1995

1.588

1.556

1.557

1.555

1.524

1994

1.671

1.631

1.620

1.618

1.582

1993

1.706

1.670

1.673

1.662

1.637

YEAR

TABLE 16

TABLE 17

TABLE 18

TABLE 19

TABLE 20

 

Packing/ Fruit

Laundry/

Clean

Logging Eq.

Packing/

Meat

Metal

Work

2011

1.000

1.000

1.000

1.000

1.000

2010

1.024

1.025

1.022

1.023

1.026

2009

1.023

1.016

1.008

1.018

1.006

2008

1.043

1.050

1.042

1.051

1.044

2007

1.079

1.093

1.079

1.092

1.084

2006

1.130

1.153

1.124

1.163

1.144

2005

1.177

1.204

1.174

1.214

1.195

2004

1.256

1.299

1.262

1.300

1.290

2003

1.300

1.346

1.306

1.344

1.330

2002

1.319

1.371

1.327

1.367

1.352

2001

1.331

1.379

1.335

1.378

1.355

2000

1.342

1.390

1.343

1.392

1.364

1999

1.370

1.416

1.367

1.419

1.383

1998

1.377

1.419

1.372

1.426

1.383

1997

1.388

1.430

1.384

1.442

1.396

1996

1.420

1.453

1.405

1.467

1.414

1995

1.438

1.475

1.425

1.493

1.438

1994

1.483

1.529

1.471

1.549

1.494

1993

1.537

1.570

1.512

1.595

1.532

1992

1.583

1.600

1.546

1.626

1.554

2012

1.000

1.000

1.000

1.000

1.000

2011

1.026

1.028

1.029

1.028

1.030

2010

1.056

1.061

1.058

1.058

1.066

2009

1.056

1.051

1.044

1.053

1.045

2008

1.076

1.087

1.078

1.087

1.084

2007

1.114

1.132

1.116

1.129

1.126

2006

1.166

1.193

1.163

1.203

1.189

2005

1.214

1.247

1.215

1.255

1.241

2004

1.296

1.345

1.306

1.345

1.339

2003

1.341

1.394

1.352

1.390

1.382

2002

1.361

1.419

1.373

1.414

1.405

2001

1.373

1.427

1.382

1.425

1.407

2000

1.384

1.439

1.390

1.440

1.417

1999

1.414

1.466

1.415

1.467

1.436

1998

1.420

1.469

1.420

1.475

1.436

1997

1.432

1.480

1.432

1.491

1.450

1996

1.465

1.504

1.455

1.518

1.468

1995

1.483

1.527

1.475

1.544

1.494

1994

1.530

1.583

1.522

1.602

1.552

1993

1.586

1.625

1.565

1.650

1.591

YEAR

TABLE 21

TABLE 22

TABLE 23

TABLE 24

TABLE 25

 

Mine

Mill

Paint

Mfg.

Petroleum

Printing

Paper

Mfg.

2011

1.000

1.000

1.000

1.000

1.000

2010

1.025

.996

1.019

1.023

1.025

2009

1.024

.985

1.003

1.013

1.014

2008

1.071

1.019

1.044

1.036

1.047

2007

1.116

1.064

1.096

1.072

1.089

2006

1.165

1.126

1.166

1.131

1.144

2005

1.222

1.182

1.234

1.176

1.196

2004

1.325

1.282

1.341

1.254

1.296

2003

1.375

1.330

1.388

1.291

1.346

2002

1.402

1.358

1.416

1.312

1.372

2001

1.418

1.366

1.430

1.313

1.383

2000

1.428

1.378

1.448

1.324

1.392

1999

1.452

1.404

1.469

1.343

1.420

1998

1.459

1.408

1.476

1.344

1.423

1997

1.475

1.422

1.496

1.351

1.436

1996

1.499

1.443

1.521

1.373

1.464

1995

1.523

1.469

1.552

1.393

1.484

1994

1.570

1.525

1.609

1.445

1.534

1993

1.613

1.563

1.641

1.481

1.581

1992

1.647

1.589

1.657

1.503

1.617

2012

1.000

1.000

1.000

1.000

1.000

2011

1.041

1.029

1.028

1.026

1.028

2010

1.075

1.063

1.054

1.058

1.061

2009

1.074

1.051

1.037

1.047

1.050

2008

1.123

1.087

1.080

1.070

1.084

2007

1.170

1.135

1.134

1.108

1.127

2006

1.222

1.201

1.206

1.169

1.184

2005

1.281

1.261

1.277

1.216

1.238

2004

1.389

1.368

1.387

1.296

1.342

2003

1.442

1.420

1.436

1.334

1.394

2002

1.470

1.449

1.465

1.356

1.420

2001

1.487

1.457

1.480

1.357

1.432

2000

1.498

1.471

1.498

1.369

1.441

1999

1.523

1.498

1.519

1.388

1.470

1998

1.530

1.503

1.527

1.389

1.474

1997

1.546

1.517

1.548

1.397

1.486

1996

1.571

1.540

1.573

1.419

1.516

1995

1.597

1.567

1.605

1.440

1.537

1994

1.646

1.628

1.664

1.494

1.589

1993

1.691

1.668

1.698

1.530

1.637

YEAR

TABLE 26

TABLE 27

TABLE 28

TABLE 29

TABLE 30

 

Refrigeration

Rubber

Steam Power

Textile

Warehousing

2011

1.000

1.000

1.000

1.000

1.000

2010

1.027

1.022

1.028

1.018

1.023

2009

1.020

1.007

1.018

1.005

1.017

2008

1.055

1.044

1.053

1.035

1.049

2007

1.100

1.085

1.103

1.071

1.086

2006

1.164

1.143

1.177

1.117

1.126

2005

1.221

1.190

1.240

1.159

1.165

2004

1.316

1.277

1.352

1.241

1.246

2003

1.364

1.322

1.402

1.277

1.290

2002

1.391

1.349

1.430

1.296

1.305

2001

1.403

1.353

1.435

1.302

1.310

2000

1.416

1.364

1.446

1.312

1.317

1999

1.443

1.384

1.469

1.331

1.342

1998

1.449

1.390

1.470

1.333

1.343

1997

1.464

1.405

1.481

1.344

1.348

1996

1.487

1.425

1.496

1.367

1.370

1995

1.514

1.452

1.521

1.386

1.382

1994

1.571

1.503

1.581

1.428

1.422

1993

1.613

1.538

1.615

1.465

1.469

1992

1.644

1.568

1.633

1.494

1.503

2012

1.000

1.000

1.000

1.000

1.000

2011

1.029

1.026

1.028

1.025

1.027

2010

1.064

1.056

1.065

1.050

1.057

2009

1.057

1.041

1.055

1.036

1.050

2008

1.093

1.078

1.091

1.068

1.083

2007

1.140

1.121

1.143

1.105

1.122

2006

1.207

1.181

1.220

1.152

1.163

2005

1.265

1.230

1.285

1.196

1.203

2004

1.364

1.319

1.400

1.280

1.288

2003

1.413

1.365

1.452

1.317

1.333

2002

1.442

1.393

1.481

1.336

1.348

2001

1.454

1.397

1.486

1.342

1.353

2000

1.467

1.409

1.499

1.353

1.361

1999

1.496

1.430

1.522

1.373

1.386

1998

1.502

1.436

1.523

1.375

1.388

1997

1.517

1.452

1.534

1.386

1.393

1996

1.542

1.472

1.550

1.410

1.415

1995

1.569

1.500

1.576

1.429

1.428

1994

1.628

1.552

1.638

1.473

1.468

1993

1.671

1.589

1.673

1.511

1.517

YEAR

TABLE 31

TABLE 32

 

Woodworking

Glass Mfg.

2011

1.000

1.000

2010

1.024

1.027

2009

1.016

1.016

2008

1.040

1.049

2007

1.074

1.098

2006

1.117

1.163

2005

1.159

1.226

2004

1.238

1.334

2003

1.276

1.387

2002

1.295

1.414

2001

1.307

1.421

2000

1.308

1.435

1999

1.330

1.462

1998

1.332

1.466

1997

1.338

1.478

1996

1.371

1.497

1995

1.385

1.522

1994

1.425

1.585

1993

1.473

1.621

1992

1.524

1.644

2012

1.000

1.000

2011

1.025

1.029

2010

1.056

1.064

2009

1.048

1.053

2008

1.073

1.087

2007

1.108

1.138

2006

1.152

1.205

2005

1.195

1.270

2004

1.277

1.382

2003

1.316

1.437

2002

1.336

1.465

2001

1.348

1.473

2000

1.349

1.487

1999

1.372

1.515

1998

1.374

1.519

1997

1.380

1.531

1996

1.414

1.551

1995

1.429

1.578

1994

1.470

1.642

1993

1.520

1.679

 

AUTH: 15-1-201, MCA

IMP: 15-6-138, 15-8-111, MCA

 

REASONABLE NECESSITY: The department determines the market value of industrial machinery and equipment by using the guides and valuation manuals listed in its rules and then applying the trend factor tables published in its rules. The machinery and equipment is valued annually, and because the trend tables used to value the property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process.

The annual update to the trend tables provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

Therefore, the department proposes to amend ARM 42.22.1311, to update the trend factors table in the rule.

Additionally, while the table contents have been updated annually, it was discovered in a recent biennial review of the department's rules that the year in the title of the table still showed 2006. The table title is being amended to update the year from 2006 to 2013 at this time and will be revised accordingly each year along with future updates to the contents of the table.

The department further proposes to amend the rule to revise the title of the appraisal guide being referenced in (1), to provide consistency throughout the trended depreciation rules in Title 42.

 

     42.22.1312 INDUSTRIAL MACHINERY AND EQUIPMENT DEPRECIATION SCHEDULE (1) remains the same.

(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

2004 2013 Table - Table 18

 

          Case                                           I                          II

Equipment - Motor

Original Installed Cost         $ 200                  $ 100

Year Installed                        2000 2005         1977 1987

 

          Case I                                      Case II

 

Cost $ 200                               Cost $ 100

x Trend 1.027 1.215                x Trend 1.125* 1.352*

RCN $ 205 243                        RCN $ 113 135

 x % Good .67 .30                     x % Good .20

Sound Value $ 138 73            Sound Value $ 23 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.

 

AUTH: 15-1-201, MCA

IMP: 15-6-138, 15-6-156, 15-8-111, MCA

 

REASONABLE NECESSITY: The department proposes to amend ARM 42.22.1312 to update the example with more current trending and depreciation schedule data.

 

4. Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: 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 and must be received no later than November 21, 2012.

 

5. Cleo Anderson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing.

 

6. An electronic copy of this notice is available on the department's web site at www.revenue.mt.gov. Select the "Legal Resources" link in the left hand column, and click on the "Rules" link within to view the options under the "Current Rule Actions – Published Notices" heading. The department strives to make the electronic copy of this notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. While the department also strives to keep its web site accessible at all times, in some instances it may be temporarily unavailable due to system maintenance or technical problems.

 

7. The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notice regarding particular subject matter or matters. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the person in 4 above or faxed to the office at (406) 444-4375, or may be made by completing a request form at any rules hearing held by the Department of Revenue.

 

8. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

/s/ Cleo Anderson                            /s/ Dan R. Bucks

CLEO ANDERSON                        DAN R. BUCKS

Rule Reviewer                                 Director of Revenue

 

Certified to Secretary of State October 1, 2012

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