A property tax abatement reduces the taxable value of property or applies a reduced tax rate to a property.
Montana currently has eight abatements:
- New Industrial Property
- Pollution Control Equipment
- Gasohol Producing Equipment
- Gray Water Systems
- Electrolytic Reduction Facilities
- New or Expanding Industries
- Reduced Rate for Remodeling Buildings or Structures
- Historic Property Abatement
New industrial property is eligible for a reduced taxable valuation rate of 3% for the first three years of operation.
Elgibility
Any organization establishing a new plant in Montana or a new industrial operation.
This abatement is only available for industries that:
- Manufacture, mill, mine, produce, process, or fabricate materials;
- Do similar work, using capital labor to turn raw materials into usable commercial products;
- Change materials into new products as defined as manufacturing in the 1987 Standard Industrial Classification Manual;
- Transport, warehouse, or distribute commercial products or materials, if 50% or more of gross sales or receipts are earned outside Montana; or
- Earn 50% or more annual gross income from sales outside Montana.
Benefit
A reduced taxable valuation rate of 3%. The tax benefit applies to all mills levied on all real and personal property of the new industry, except:
- Property used by:
- Retail or wholesale merchants,
- Commercial services of any type,
- Agriculture, trades, or professions unless the business or profession meets the eligibility requirements;
- A plant that will create an adverse impact on existing state, county, or municipal services; or
- property used or employed in any industrial plant that has been in operation in this state for 3 years or longer.
Related Laws
Air and water pollution control equipment is eligible for a reduced taxable valuation rate of 3%.
Property
Facilities, machinery, or equipment used to reduce or control water or atmospheric pollution or contamination by removing, reducing, altering, disposing, or storing pollutants, contaminants, wastes, or heat.
Benefit
A reduced taxable valuation rate of 3%. The tax benefit applies to all mills levied on the property and does not phase-out with time.
Related Laws
Gasohol producing equipment is eligible for a reduced taxable valuation rate of 3%.
Property
Any real or personal property primarily used to produce gasohol.
Benefit
A reduced taxable valuation rate of 3%. The tax benefit applies to all mills levied on the property and is available during construction and for the first three years of operation.
Related Laws
Residential dwellings with a gray water system and multiple dwelling projects with a common gray water and potable water system, as defined in 15-24-3201, MCA, may be eligible for a tax abatement.
Eligibility
Property owners must include a certification from the local board of health with their tax abatement application that states the:
- Residential dwelling is under construction or was constructed with a gray water system; or
- Multiple dwelling project is under construction or was constructed with a common gray water and potable water system.
Benefit
For residential dwellings, the property is taxed at 91% of its market value during the course of the construction and for 10 years after completion of construction.
For a multiple dwelling project, the property is taxed at 91% of the market value of the project or market value of each residential condominium unit during the course of the construction and for 10 years after completion of construction.
Due Dates
Gray Water System Applications for Tax Abatement are due April 15 of the year the first abatement is claimed for a property under construction, or within one year after the completion of the construction.
Form
To apply, complete the Gray Water System Application for Tax Abatement.
Related Laws
Electrolytic reduction facility equipment is eligible for a reduced taxable valuation rate of 3%.
Property
Machinery used in electrolytic reduction facilities.
Benefit
A reduced taxable valuation rate of 3%. The tax benefit applies to all mills levied on the property and does not phase-out with time.
Related Laws
Property devoted to research and development is eligible for a reduced taxable valuation rate of 3%.
Property
All land, improvements, and personal property owned by a research and development firm and actively devoted to research and development.
Benefit
A reduced taxable valuation rate of 3%. The tax benefit applies to all mills levied on the property and does not phase-out with time.
Related Laws
New or expanding industries approved by the local government may receive a reduced tax valuation on the property value increase caused by improvements or modernization.
Eligibility
Industries include business that:
- Manufacture, mill, mine, produce, process, or fabricate materials;
- Do similar work, using capital labor to turn raw materials into usable commercial products;
- Change materials into new products as defined as manufacturing in the 1987 Standard Industrial Classification Manual;
- Transport, warehouse, or distribute commercial products or materials, if 50% or more of gross sales or receipts are earned outside Montana; or
- Earn 50% or more annual gross income from sales outside Montana.
New industries are new to the jurisdiction and invest at least $125,000 in qualifying improvements within the area.
Expanding industries are businesses adding at least $50,00 worth of improvements within the area.
The local government must approve the abatement.
New Industrial Property cannot take this abatement.
Property
The added improvements or modernized processes.
Benefit
A 50% reduction on the increased taxable value for the first five years, with a 10% lower reduction every year after:
- First five years
- 50% reduction
- Sixth year
- 40% reduction
- Seventh year
- 30% reduction
- Eight year
- 20% reduction
- Ninth year
- 10% reduction
The reduction only applies to the increase in taxable value caused by the improvements or modernization.
This benefit applies to the mills levied for high school and elementary school district purposes and the mills levied by the local government.
Related Laws
A business with remodeled buildings is eligible for a reduced tax rate for the five years after construction.
Property
Any remodeled, reconstructed, or expanded building or structure, if the taxable value goes up by at least 2.5%
Benefit
A reduced tax rate as low as 3% based on the number of new full-time employees.
A reduced tax rate on the increased taxable value of the qualified improvements, phased out over time:
- Construction
- 100% reduction
- First Year
- 80% reduction
- Second Year
- 60% reduction
- Third Year
- 40% reduction
- Fourth Year
- 20% reduction
- Fifth Year
- 0% reduction
Related Laws
Historic property may be eligible for a property tax abatement on the increased value from restorations and construction.
Eligibility
The historic property must meet the design review (15-24-1605, MCA) and is:
- Located in a national historic district and contribute to the district;
- A new building in a national historic district built to match the design of the district; or
- Listed individually in the National Register of Historic Places
Property
Restored, rehabilitated, expanded, or newly constructed property that meets the requirements.
Benefit
A 100% abatement on the taxable value increase caused by the rehabilitation, restoration, expansion, or new construction for up to five years.
Related Laws
Qualified Data Centers do not receive a tax abatement. Instead, state law provides for Qualified Data Centers to be classified as Class Seventeen property with a taxable valuation rate of 0.9% of market value.
Learn more about Qualified Data Centers.
