(MCA 15-6-145)

 

All railroad transportation property, as described in the Railroad Revitalization and Regulatory Reform Act (4R Act), is taxable in Montana. The taxable percentage is determined annually. In 2005, the taxable percentage was 3.74%.

 

All airline transportation property, as described in the Tax Equity and Fiscal Responsibility Act (TEFRA), is taxable in Montana. The taxable percentage is determined annually. In 2005, the taxable percentage was 3.74%.

 

Railroad and airline transportation companies are centrally assessed. Centrally assessed companies are valued by department appraisers using a method referred to as the "unit approach to value." The appraiser determines a system value for the company, allocates a portion to the state and then apportions values to the counties where the property is located.

 

Three indicators are typically used to determine the system value of the company: Cost, Income and Market. The indicators are then correlated to arrive at a system value. The Department of Revenue determines an allocated value to the state (that portion of the correlated system value that belongs to Montana). The department then apportions the allocated Montana value to the counties where the property is located.

 

The taxable percentage is determined by finding the effective taxable percentage for all other commercial property in the state.

 

Taxable Percentage = (A x M)/B, where:

A = total statewide taxable value of all commercial property, except class 12 property.

B = total statewide market value of all commercial property, except Class 12 property.

M = value weighted mean sales assessment ratio for all commercial property.