(1) Except as provided in (4) and (6), personal property is valued annually using the cost approach to market value. The market value is determined by multiplying a trended depreciation percentage times the installed original cost of the property. The department has established specific categories of personal property which are provided in ARM 42.21.155.
(2) Leased or rental equipment that is not exempt under 15-6-202 or 15-6-219, MCA, is taxable and is valued in the same manner as similar non-leased equipment.
(3) Rental videos that are not exempt under 15-6-202 or 15-6-219, MCA, are taxable and have a trended percent good of 25% in year one, 15% in year two, and 10% each year thereafter.
(4) Locally assessed television cable system transmission line is valued at $2,000 per mile; service drops are valued at $25 each.
(5) All downhole equipment installed in oil and gas wells, such as sucker rods, tubing, casing, and submersible pumps are exempt from taxation. Downhole equipment not installed in an oil or gas well as of the January 1 assessment date is taxable.
(6) For farm machinery and equipment and heavy equipment, the department will apply the valuation methods in descending order beginning with the method in (a) and proceeding, where necessary, through the method in (e) until a market value can be determined for the equipment.
(a) The market value will be the "average wholesale" or a comparable category of value as shown in the online version of the national agricultural and implement valuation guide known as Equipment Watch (Equipment Watch), as of September-October of the year prior to the year of assessment. Equipment Watch is adopted and incorporated by reference in accordance with 15-8-111, MCA, and may be reviewed in a department field office or purchased from the publisher: Dataquest, 1290 Ridder Park Drive, San Jose, California 95131.
(b) If market value cannot be determined under (a), the department will approximate average wholesale value of farm machinery and equipment through application of its Farm Machinery Manual dated January 1, 1998, which the department adopts and incorporates by reference into this rule. The purpose of the Farm Machinery Manual is to function as a resource to approximate average wholesale value of farm machinery and equipment. The Farm Machinery Manual may be reviewed in a department field office or a copy of the Manual may be requested from the Department of Revenue, Property Assessment Division, P.O. Box 8018, Helena, MT 59604-8018.
(c) For all farm machinery and equipment, and heavy equipment that cannot be valued under (a) and (b), the department may determine the original free
on-board value (FOB) using archival valuation guidebooks and best available data. If an original FOB cannot be ascertained, the department may use trending to determine the FOB. The FOB or trended FOB will be depreciated to arrive at a value that approximates average wholesale value.
(d) A trended average wholesale value will be applied to the equipment if:
(i) the equipment cannot be valued under (a), but an average wholesale value is available for the same make and model with a different year new; and
(ii) the equipment cannot be valued under (c) or the value as calculated under (c) results in a higher value being placed on a piece of equipment than the last year listed in Equipment Watch for the same make and model. The trended average wholesale value will be determined by trending the average wholesale value as found in Equipment Watch, for the same make and model with a different year new.
(e) If the valuation methods in (a) through (d) cannot be used, the owner or applicant must certify to the department the year acquired and the acquired price. If the item was acquired through a means other than the open marketplace, the owner must provide a reasonable estimate of the item's value at the time of acquisition. The reported value will be trended and depreciated.
(7) Items of farm machinery and equipment valued below $100 are exempt from taxation.
(8) This rule is effective for tax years beginning after December 31, 2018.