42.21.125 BUSINESS EQUIPMENT
(1) Once a lease agreement is consummated pursuant to a dealer lease program, that equipment is not a part of the dealer's inventory. Each party to the lease transaction is obligated to report the equipment on the department's property reporting form. The appropriate party, based on a Uniform Commercial Code (UCC) filing, shall be assessed property tax on the equipment for the term of the lease.
(2) Business equipment that is held by a dealer, pursuant to a dealer rental program, is not a part of the dealer's inventory except for farm implements and construction equipment that are in a purchase incentive rental program and that meet the criteria in (4). The dealer shall report the equipment on the property reporting form provided by the department. The dealer shall be assessed property tax on the equipment for the full tax year.
(3) All business equipment that is part of a dealer sales program shall be considered a part of the dealer's business inventory.
(4) Farm implements and construction equipment that meet all of the following criteria shall be considered a part of the dealer's business inventory:
(a) the equipment must be owned by a farm implement or construction equipment dealership,
(b) the equipment must be held for sale;
(c) the equipment must be rented only once to a single user for nine months or less as an incentive for the purchase of the property.
(5) Property brought into the state that meets the criteria in (4) is not taxable unless it is sold or otherwise disposed of in the state.
(6) All farm implement and construction equipment dealers with equipment that meet the criteria in (4) shall report the qualifying equipment each calendar quarter for which the dealership has qualifying equipment on the form provided by the department. As part of its audit responsibility, the department may request a copy of specific purchase rental program agreements from the respective dealers.
History: 15-1-201, MCA; IMP, 15-6-202, MCA; NEW, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2009 MAR p. 2497, Eff. 12/25/09.