FAQ'S – Extended Property Tax Assistance Program
1. Which properties can benefit from this program?
Answer: Only “qualified residential properties*” (properties including a residence and up to 1 acre of appurtenant land) which have an increase in taxable valuation of more than 24% due to the 2009 reappraisal, and have the potential to experience an increase in tax liability of $250 or more (based on the use of the 2008 mill levy).
* Qualified residential property - is a single-family dwelling unit, unit of a multiple-unit dwelling, trailer, manufactured home and as much of the surrounding land, not exceeding 1 acre, as is reasonably necessary for its use as a dwelling. The dwelling, either by itself or in combination with no more than one other residential dwelling in Montana, must be occupied for at least 7 months during each calendar year. (NOTE: For multi-unit dwellings, the owner or person or persons controlling at least 25% interest in the multi-unit structure must actually occupy one of the units in the structure, in order for the unit to qualify.)
2. How many properties will potentially qualify for this benefit?
Answer: It is estimated there are in excess of 35,000 potential properties which will meet the initial criteria, and will be mailed application forms.
3. Do we know how many properties will actually receive the benefit?
Answer: No, we will not know the exact count on properties qualifying for the benefit until the application forms have been returned and processed.
4. What additional qualifying criteria are required from the returned application forms?
Answer: In the case of individual residential property owners, the applicants must be able to show that their total household income is $75,000 or less and that they owned the property as of December 31, 2008.
In the case of entities (corporations, fiduciaries, pass-through entities, associations, joint-stock companies, syndicates, trusts or estates, or other nonnatural persons), the applicants must be able to show that the total income of the person or persons controlling at least 25% interest in the entity is $75,000 or less and that they owned the property as of December 31, 2008.
5. What is meant by the term household income?
Answer: This term is defined on the application forms. It is the sum of the income of all members of the household and all other persons who are owners of the property. Income includes income from all sources, including net business income and otherwise tax-exempt income of all types; but does not include social security paid directly to a nursing home. If self-employed, net business income is described as gross income less ordinary expenses, but before deducting depreciation or depletion allowance or both.
6. Do I have to send copies of my latest federal income tax return as the application form requires?
Answer: Yes, the legislation provides that the Department may require whatever documentation it considers necessary for purposes of verifying the household income to determine the person's eligibility for the tax rate adjustment provided for in this program. Any documents provided for this purpose (including copies of tax returns) are subject to the confidentiality provisions in Montana Law (Section 15-30-303, MCA.)
7. What happens if I don't send the supporting documentation?
Answer: Your application will be denied.
8. If I apply and qualify for a reduced tax rate this year, do I have to apply next year?
Answer: Yes, applications with supporting documentation will be required each year in order to obtain the benefit provided through this program.
9. If an applicant qualifies for a reduced tax rate this year, but their income changes to disqualify them for tax year 2010, can they again qualify for the benefit in 2011 and subsequent years?
Answer: Yes, if the applicant is one of the taxpayers identified in tax year 2009 who potentially qualifies for the program (based on a taxable value increase of more than 24%, and a potential tax liability increase of $250 or more due to reappraisal). The determining factors in succeeding years are:
a) They continue to own the property, and;
b) There is no land use change to the property, and;
c) Their total household income is $75,000 or less.
10. Are there situations where taxpayers may qualify for the benefit of this program who were not identified initially in 2009 to potentially qualify for the benefit?
Answer: It is possible for other properties to qualify under certain circumstances:
a) If it is determined after the discovery of an error or an AB-26 review or an appeal decision that the taxable value of the property did actually increase by more than 24% as a result of reappraisal, and;
b) If the potential increase in tax liability on the property also increased by $250 or more, then;
c) Taxpayers meeting the first two criteria should be given the opportunity to apply for the benefit according to the application requirements, and;
d) If they successfully meet the requirements of the application, they should be afforded the appropriate level of benefit provided through this program.
11. Can I appeal the decision of the Department of Revenue?
Answer: Yes, the decision of the Department regarding qualification, level of qualification or disqualification for this EPTAP may be appealed to the county tax appeal board (CTAB).
12. Aren't there specific ranges of income, taxable valuation increases and increases in tax liability that can result in different levels of tax rate reductions?
Answer: Yes, and they are as follows:
a) If the total household income is $25,000 or less, and the increase in taxable valuation due to reappraisal is greater than 24% for the residence and up to 1 acre of appurtenant land, and the potential increase in tax liability is $250 or more, or;
b) If the total household income is greater than $25,000 but less than or equal to $50,000, and the increase in taxable valuation due to reappraisal is greater than 30% for the residence and up to 1 acre of appurtenant land, and the potential increase in tax liability is $250 or more, or;
c) If the total household income is greater than $50,000 but less than or equal to $75,000, and the increase in taxable valuation due to reappraisal is greater than 36% for the residence and up to 1 acre of appurtenant land, and the potential increase in tax liability is $250 or more.
13. If the taxable valuation on my residence increases by more than 24% due to
new construction, will I be eligible for the EPTAP benefit on that property?
Answer: No, the increase in taxable valuation must be due solely to the effects of the reappraisal. The value of the residence before and after reappraisal must be compared, excluding the value of the new construction.
14. How many possible tax rates are available for this EPTAP program?
Answer: There are 292 possible tax rates for 2009; they range from 0.01% to 2.92%.
15. Who should I talk to if I have questions regarding this Extended Property Tax Assistance program?
Answer: As much as possible, calls should be directed to (406)444-6339, the number on the cover letter accompanying the applications.
