Montana counties sending out supplemental property tax bills following court ruling

County Property Taxes
County Property Taxes
County Property Taxes
Posted at 7:32 PM, Apr 09, 2024

HELENA — Across Montana, counties have mailed out supplemental tax bills – an extra charge required after a court ruling ended county leaders’ attempt to challenge how property taxes are calculated.

On Tuesday, the Lewis and Clark County Commission approved an updated resolution on property tax billing – a key step for the county to get ready to start sending out their own supplemental bills.

“We tried to keep this money in the pockets of our local taxpayers,” Commissioner Candace Payne said. “However, we were not able to successfully do that.”

Lewis and Clark County is among 49 out of 56 Montana counties that decided to charge a lower number of school equalization property tax mills this year, arguing those mills should be capped based on inflation, as with local mills. The Montana Department of Revenue argued it had the authority to set the number of equalization mills, which are intended to ensure equity in education across school districts.

In November, the Montana Supreme Court sided with the state, saying counties have to abide by DOR’s calculation of the mills.

“I think we were right and the Supreme Court was wrong, but they have the final say,” Lewis and Clark County Commissioner Tom Rolfe said Tuesday.

The effect is that these 49 counties now need to collect an additional 17 mills from property taxpayers – and slightly more than that in counties like Lewis and Clark that host public two-year colleges. The additional tax amounts to around $17 for every $1,000 of a property’s taxable value. For a typical residential property, taxable value is 1.35% of the assessed market value, and every $100,000 of market value would mean about $23 in supplemental taxes.

County Property Taxes
Lewis and Clark County treasurer-clerk and recorder Amy Reeves holds a sample property tax bill. The county is set to send out supplemental tax bills in the coming weeks.

Terri Kunz, Jefferson County treasurer and president of the Montana County Treasurers Association, told MTN most counties now have their supplemental bills in the mail. She said, across the state, they’re receiving a lot of calls with questions about them.

Counties use different software systems to process their property taxes, and that’s meant differences from county to county in how the additional tax responsibility is handled.

In general, if you paid your taxes in full last fall, when the original bills went out, you will get a supplemental bill and have to pay only the additional 17 mills. If you paid only the first-half taxes, you will have to pay the second half as well as the supplement – in many cases, they will appear together on a revised bill.

County Property Taxes
On Apr. 9, the Lewis and Clark County Commission approved an updated resolution on property tax billing – a key step for the county to get ready to start sending out their own supplemental tax bills.

On Tuesday, Lewis and Clark County commissioners agreed not to send a bill to about 3,760 payers whose additional tax would be less than $5 – a decision some other counties have also made. Instead, they’ll simply pay the state the amount those taxpayers would have owed.

Treasurer-clerk and recorder Amy Reeves said those small bills would be for properties of less than $22,000 in taxable value – many likely owned by people on property tax assistance programs. She said it wouldn’t be an efficient use of staff time or mailing and printing costs to send them.

“We owe the state of Montana around $6,900 for those amounts that are under the $5, and costs would have been around $10,000 to $12,000 to collect that,” she said.

In addition, the county has already charged some of those taxpayers an administrative fee to bring their minimum tax bill to $5, so Reeves said they might essentially have to pay twice.

Overall, Reeves said it would cost about $30,000 to $50,000 to print and mail out supplemental bills.

Many counties have been adding notes along with the bills to address some of the questions people who get them may have. Reeves said Lewis and Clark County will do the same. She hopes to have the bills to the printers in a couple days and out to property owners in the coming weeks, with the intention of having the second-half taxes and the supplement due the same time, May 31.

Even if you pay your property taxes through a mortgage company, Reeves still recommends that you check and make sure that their supplemental bill is being taken care of.

Editor's Note: This story has been updated to include a clarification of the comparison between a property's taxable value and assessed market value.