Residents of Silver Bow and Gallatin counties have taken legal action to compel the Montana Department of Revenue to reassess residential property taxes. They claim the Gianforte administration has breached legal and constitutional duties, allowing homeowner taxes to soar while many business categories enjoyed reductions. A lawsuit was filed in Butte-Silver Bow County District Court seeking class-action status and a halt to further residential tax collection until tax rates are balanced.
Residential property taxes became a heated topic post the 2023 Legislature as bills started coming due. The increase in taxes followed a COVID-19-induced population surge, driving property values up. Despite Governor Gianforte proposing a rebate of up to $675 for homeowners, critics argue it failed to adequately counterbalance the tax hikes.
The Republican-led Legislature faced backlash for not revising residential taxes during the 2023 session, despite warnings from the Montana Department of Revenue about potential shocks for homeowners. Governor Gianforte criticized local governments for excessive spending, sparking disagreement within his own party.
The lawsuit asserts the administration and Department of Revenue neglected their duty to equalize property tax rates, a vital constitutional and statutory responsibility. Lawyers argue this failure shifted hundreds of millions in tax burdens unfairly onto residential taxpayers.
The lawsuit highlights discrepancies in tax assessments, noting that while Montana has accurate residential market data, business assessments are less comparable. This creates a system where businesses negotiate tax reductions, leaving homeowners without similar opportunities.
Residential tax rates, as per the Department’s calculations, should have decreased from 1.35% to 0.94%, but no adjustment was made, leading to an unfair tax shift. The lawsuit provides evidence of changing tax burdens, showing residential taxes rose from 51% to 59% of the state budget, increasing revenue by $900 million.
Centrally-assessed businesses, whose taxes are determined in Helena, saw a decrease in their contribution from $864 million to $809 million. NorthWestern Energy, the largest taxpayer, experienced a 20% tax reduction.
The lawsuit seeks class-action certification and invokes the “private attorney general doctrine,” which could result in the state covering attorney fees if the plaintiffs win. The residents, represented by lawyers including John M. Morrison and Allan McGarvey, claim the state has overcharged them by over $100 million.
No comments were available from Governor Gianforte’s office or the Montana Department of Revenue at the time of publication.
ACFrOgB-zUFQAq_xzSPAAE1kyFF8YuSjvrHMDbmo5LWHpNYplW49PWsgp2xwx_ETTe8NdWYZXwERns-uYs2TvChLOwQpuhKdj8gCKHXbFf-_We0vCw4wVemTNChGFAl4cKcUzMlXv0sg6VXpF0lw
—
Read More Montana News
