Montana Taxes – Trego's Mountain Ear

Taxes at Trego School

March 2, 2021March 2, 2021 Sam

School taxation is not a simple subject. Part of the school taxes go to Helena, and are returned, not dollar for dollar, but apportioned according to school enrollment. Another part of taxes are assessed and go from the county revenues into the school accounts. Each portion has minimum and maximum levels. It isn’t hard math, but it is a challenge to keep things straight.

At Trego, the board needs to begin funding a building reserve fund. That means adding a permissive levy to raise $5,232.32 – about 2.71 mills. The state allows us a “District Major Maintenance Amount” with a maximum of $16,500 – and to get to that maximum, we have to levy $5,232.32 – 2.71 mills. The school was built over 50 years ago, and more maintenance planning and effort is becoming necessary. Folks give some simple explanations – “that will be about three dollars on a 100,000 assessment” which are simplified, easy to understand, and wrong.

Where to find information:

MT Revenue instructs us on how to calculate taxes from mills – not a particularly challenging math exercise, but worth using so you can understand how each additional levy affects your tax bill. As we look at the numbers, we’ll see that, in Trego, where nearly half the taxable value is “Centrally Assessed” we need a bit more understanding.
MT Office of Public Instruction provides spreadsheets of the budget files for each school district in the state. They’re in pdf format, but provide a lot of information – and are only slightly confusing.
State Information Technologies Services Division provides information that shows how each district is valued – for example, as you look at the tables below, you will notice that Market Value and Taxable value vary significantly.

If you contrast Trego, District 53, with Fortine, District 14, you will note that Fortine shows a market value of $119,644,515 while Trego shows $114,462,957. Still, the taxable value leans in the opposite direction: Fortine 1,5436,104 vs Trego at 1,931,429. The difference is in the category shown as “Centrally Assessed.” Taxable value of Centrally Assessed” property is about 3% of market value, while taxable value of “Real Property” is slightly over 1% of market value.

Since centrally assessed property in the Trego School District will primarily be railroad property, and since it represents a significant proportion of the total taxable value ($932,774/$1,931,429 = 48.3%) taxpayers in Trego School District can thank the railroad for taking a significant portion of the tax burden.

Lincoln County

Property Type	Market Value	Taxable Value
Special Mobile	$1,312,670	$19,573
Manufactured Homes	$19,167,600	$227,521
Personal Property	$14,516,888	$205,961
Real Property	$2,492,594,586	$30,032,762
Centrally Assessed	$215,533,424	$7,005,541
Net & Gross Proceeds	NA	$0
Total	$2,741,812,498	$37,491,358
Newly Taxable	NA	$1,091,497
TIF Increment	NA	$172,806

Fortine Elementary District 14

Property Value	Market Value	Taxable Value
Special Mobile	$0	$0
Manufactured Homes	$754,480	$8,520
Personal Property	$159,180	$2,388
Real Property	$112,774,816	$1,355,638
Centrally Assessed	$5,956,039	$179,558
Net & Gross Proceeds	NA	$0
Total	$119,644,515	$1,546,104
Newly Taxable	NA	$45,931
TIF Increment	NA	$0

Eureka Elementary, District 13

Property Type	Market Value	Taxable Value
Special Mobile	$8,349	$180
Manufactured Homes	$6,301,850	$80,096
Personal Property	$3,794,072	$60,203
Real Property	$890,148,736	$11,267,169
Centrally Assessed	$66,745,926	$2,156,949
Net & Gross Proceeds	NA	$0
Total	$966,990,584	$13,564,597
Newly Taxable	NA	$374,513
TIF Increment	NA	$172,806

Trego Elementary School District 53

Property Value	Market Value	Taxable Value
Special Mobile	$0	$0
Manufactured Homes	$965,850	$12,244
Personal Property	$424,664	$6,371
Real Property	$83,469,474	$980,040
Centrally Assessed	$29,602,969	$932,774
Net & Gross Proceeds	Na	$0
Total	$114,462,957	$1,931,429
Newly Taxable	NA	$159,108
TIF Increment	NA	$0

Laws, Ordinances & Regulations

How Long do Gift Cards Last?

December 15, 2020December 14, 2020 Sam

Buying gift cards has some appeal, as a way to help out local businesses. Buy it now- giving the business some much needed cash, redeem later when business is better. What about using an existing gift certificate?

Does putting off redeeming a gift card actually benefit the business? It depends on the state, and how long you want to put off using the gift card.

When a gift card is purchased, the business gains cash and marks an IOU down on its ledgers, more or less. For a business, Cash is good, and an IOU that’s never redeemed would seem like a good thing.

This is where the government comes in. If a gift card sits around long enough, unused, it starts to run afoul of unclaimed property laws. Many states require that unclaimed property be transferred to the state, a process known as escheatment. This isn’t, as it happens, an issue for the chap with the gift card sitting under a pile of papers. It’s an issue for the business.

Businesses keep track of gift cards sold, and redeemed. In some states, the profit from an unredeemed gift card must be given to the state, so the business doesn’t profit from the sale. Instead of the customer getting value back, the customer has essentially made a donation to the state government, which the business has been required to keep track of for a while.

What about in Montana? In Montana, gift cards don’t expire. That doesn’t mean the state government doesn’t get involved though- after three years, it’s abandoned property, and the state would like the funds. Not all the funds- depending on the type of gift card, the state of Montana may only want 60% of the value. And for businesses that don’t make very much from gift cards (less than $200,000 in the past year), the gift card won’t be considered abandoned.

So- in short, even in Montana, whether putting off using a gift card for more than three years is a benefit to the business depends on how many gift cards the business sells. For your small town business, putting off using a gift card probably won’t leave them writing a larger check for their state taxes.

Community, Demography

Beer Taxes North and South

September 8, 2020September 8, 2020 michaelmccurryphd

I listened to a comment from north of the line about how cheap beer is south of the 49th parallel. So I decided to investigate – and a lot of the difference is alcohol prices is the governmental controls. Taxes do make a difference in what we drink – particularly when we look at alcoholic beverages.

A 2018 report titled “Beer Taxes – A Canadian – U.S. Comparison” makes the research easy. “Beer taxes in Canada are higher in both absolute value and when calculated as a percentage of selling price with an average government beer tax percentage of 47% (of retail price) in Canadian provinces versus an average government tax percentage of 17% in U.S. states.” Working the math is an exercise in keeping your units straight. In Canadian dollars, a case of beer is $2.09 taxes in Montana, and $17.32 in British Columbia.

Montana taxes beer at 14 cents/gallon, Wyoming at just 2 cents/gallon, and Tennessee at $1.29/gallon. It’s a little harder to calculate the Federal taxes on beer: $3.50 per barrel on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually; or $16 per barrel on the first 6 million barrels for all other brewers and all beer importers; and $18 per barrel rate for barrelage over 6 million. Wikipedia assures me that there are 31 gallons in a barrel of beer. So we’re looking at 72 cents on the gallon of a big producer’s beer going for taxes in Montana, while craft beers from small brewers are a little more than a dime per gallon.

Essentially, every time you buy a beer north of the line, you buy a beer for the government. South of the line, every time you buy a six-pack, you buy one for the government.

Next week – taxation of hard liquor differences.