Commercial Property


Commercial Property

Commercial property is defined as property used or owned by a business, a trade, or a corporation (public benefit, mutual benefit, or religious), or used for the production of income, and includes industrial property. The industrial property included within this definition is defined as all land used for industrial purposes, improvements, and buildings used to house the industrial process and all storage facilities. 15-1-101, MCA.

Commercial property includes:

  • Office buildings
  • Restaurants
  • Shopping Centers
  • Apartments
  • Hotels and Motels
  • Industrial Parks
  • Warehouses
  • Factories
  • Light Manufacturing
  • Nursing Homes
  • Golf Courses
  • Mobile home & RV Parks

Commercial Property Income and Expense Reporting

The department relies on commercial property owners to provide their income and expense information to assist in the department's determination of fair and equitable commercial property values statewide. The department analyzes the data submitted to determine typical market rents, expense percentages and capitalization rates of similar commercial properties. The data is used to develop specific property type income models used statewide in the mass appraisal process.

The department keeps all income and expense information reported confidential, as provided in 15-8-120, MCA. Reporting income and expense information is not required. However, if commercial property owners do not provide the information, it may limit their ability to appeal their property value determined by the department for tax purposes. 15-1-303, MCA

Commercial property owners can report online or submit a paper reporting form.

I. Submit a Report Online

Follow the steps below. Before you begin, it will be beneficial to have the letter we mailed to you nearby as you will need the property geocodes listed on the back side of the letter.

 

  1. Click on this link -  income and expense survey web application.

     

  2. Select the appropriate income and expense survey (filing).

     

  3. The Montana State Single Sign-on Service Okta Account sign-in screen will display as an Okta account is required to electronically submit income and expense surveys. If you already have an Okta account, enter your username and password, and click the Sign-in button. Skip steps 4-7 and go to step 8. 

     

  4. Click the Sign-up link at the bottom of the screen to create an Okta Account (screen #1 below).

     

  5. Enter the information requested in screen #2 and click Sign-up. 

     

    Screen 1
    Screenshot of a 'Sign Up' form on the Montana state government website, formerly known as EPASS Montana. The form requires an Email, First name, Last name, and Password. Below the password field are the password requirements stating the password must be at least 8 characters, include an uppercase letter, a lowercase letter, a number, and cannot be part of the user's username or the same as their last 4 passwords. The 'Sign Up' button is at the bottom, and below that is a link for users who already have an account.
    Screen 2
    Screenshot of a 'Sign In' page on the Montana state government website, noted as formerly EPASS Montana. A username and password field are presented with an error message stating 'This field cannot be left blank' above the username field. Options to keep the user signed in, to recover the password, and employee sign-in are available. The 'Sign In' button is at the bottom, with additional links for help and account creation.

     

  6.  Okta will send a verification email to your email account. The email will come from the sender address noreply@okta.com with the subject line “Activate Account”. If you do not see the email in your inbox, it may have been sent to your spam or junk folder. Click the Activate Account button. You have successfully created an Okta account.  

     

     Screenshot of an email for account activation. The header reads 'Activation' in bold. The greeting 'Hi' is followed by a redacted name. The message continues with 'Welcome to mtgov! To verify your email address and activate your account, please click the following link:' Below this text, there is a stylized button labeled 'Activate Account' with a red arrow pointing to it. At the bottom, it states 'This is an automatically generated message from Okta. Replies are not monitored or answered.'

     

  7. The Okta Sign-in screen will display again. Enter your username (email address), password, and click the Sign-in button.

     

    Screenshot of the Montana state government 'Sign In' webpage. The logo at the top reads 'MONTANA.GOV OFFICIAL STATE WEBSITE.' Below the logo, the heading says 'Sign In' and notes 'FORMERLY EPASS MONTANA.' There are fields for 'Username' and 'Password' with a warning icon and text stating 'This field cannot be left blank' next to the username field. A checkbox option says 'Keep me signed in' with a padlock icon. Below is a blue 'Sign in' button. Links for 'Forgot password?' and 'Help' are provided, as well as an alternative 'Sign in with Employee Sign-In' option and a 'Sign up' link for new account creation.

     

  8. The income and expense survey you initially selected will display. Follow the instructions and complete a survey for each of your commercial property geocodes.

 

II. Submit a Paper Form

If you prefer to submit a paper form, download the appropriate income and expense survey provided below.

Submit a survey for each property you own. Before you begin, it will be beneficial to have the reporting letter mailed to you nearby as you will need the property geocodes listed on the back side of the letter.

 

Important! When reporting income, please do not include income associated with a business occupying the property. If you occupy the property, provide only the operating expenses.

 

Mail completed surveys to the local Department of Revenue field office servicing the county where your commercial property is located. Contact information can be found at MTRevenue.gov/contact.

 

Commercial Property Valuation

When determining the market value of commercial property, as defined in 15-1-101, MCA, department appraisers will typically use the income approach or the cost approach.

The income approach is the preferred valuation method for commercial property when sufficient and relevant income and expense data is available for the department to develop income models. Buyer demand for a commercial property is dependent on its ability to generate and maintain an income stream. In the income approach, the anticipated future benefits (income or rent) of property ownership are converted into an estimated present worth (current market value) by applying a capitalization rate to net income.

The department will use the cost approach when income and expense data is not available. The cost approach is also used to value unique properties or when an income model does not exist for a property’s use type. The cost approach is considered the appropriate approach to value when the department determines a property’s land value is the predominate factor of its overall land and building value.

The department generally does not develop sales comparison market models for commercial property due to the lack of similar sales data.

The final valuation method chosen will be the method which most accurately represents 100 percent of market value, as defined in 15-8-111, MCA.

For more information on the department's commercial property valuation process, refer to the Montana Residential, Commercial, and Industrial Property Classification and Valuation Manual.