BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 42.21.113, 42.21.123, 42.21.131, 42.21.137, 42.21.138, 42.21.139, 42.21.140, 42.21.151, 42.21.153, 42.21.155, and 42.22.1311 pertaining to the trended depreciation schedules for valuing property

) ) ) ) ) ) )

NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

TO: All Concerned Persons

 

1. On November 19, 2015, at 1:30 p.m., the Department of Revenue will hold a public hearing in the Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, located at 125 North Roberts, Helena, Montana, to consider the proposed amendment of the above-stated rules. The conference room is most readily accessed by entering through the east doors of the building facing Sanders Street.

 

2. The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation advise the department of the nature of the accommodation needed no later than 5 p.m. on November 9, 2015. Contact Laurie Logan, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or e-mail [email protected].

 

3. GENERAL STATEMENT OF REASONABLE NECESSITY. The department uses data from the guides and valuation manuals listed in its rules to determine the trended depreciation schedules published in those rules. Personal property is valued annually and because the trend tables used to value personal property change from year to year, the department must provide taxpayers with notice of those changes and does so through the rulemaking process. The annual update to the trended depreciation schedules provides taxpayers with the current depreciation percentage for each of the personal property classifications for the upcoming year. The updates also clearly identify for the taxpayer how the department values and depreciates property over time.

ARM 42.21.157 requires the department to update the depreciation schedules of tangible personal property on an annual basis. The annual changes affect all businesses with tangible personal property. By annually updating the depreciation schedules the department accounts for the impact an additional year of wear and tear has on the value of tangible personal property. Small businesses would see a negative impact if these tables were not updated. Therefore, it is reasonably necessary to update the trend tables to reflect any changes for the upcoming year.

The department has considered the small business impact study requirements of 2-4-111, MCA, and determined that with the exception of ARM 42.21.123, the proposed amendments to the above-stated rules will not significantly and directly impact small businesses. For detail on how the proposed amendments to ARM 42.21.123 could significantly and directly impact some small businesses, see the supplemental reason statement for ARM 42.21.123 and also the department's small business impact analysis for this proposal notice, MAR Notice No. 42-2-946, located at revenue.mt.gov/rules.

This general statement of reasonable necessity applies to all of the following proposed rule amendments and has been supplemented as appropriate for any further amendments.

 

4. The rules proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

42.21.113 LEASED AND RENTAL EQUIPMENT (1) remains the same.

(a) For equipment that has an acquired cost of $0 to $500, the department shall use a four-year trended depreciation schedule. The trended schedule will be the same as ARM 42.21.155, category 1.

 

YEAR NEW/ACQUIRED	TRENDED % GOOD
2014 2015	70%
2013 2014	44%
2012 2013	19%
2011 and older 2012	9%
Older	5%

 

(b) For equipment that has an acquired cost of $501 to $1,500, the department shall use a five-year trended depreciation schedule. The trended schedule will be the same as ARM 42.21.155, category 2.

 

YEAR NEW/ACQUIRED	TRENDED % GOOD
2014 2015	85%
2013 2014	69% 71%
2012 2013	50% 53%
2011 2012	33%
2010 and older 2011	22% 23%
Older	18%

 

(c) For equipment that has an acquired cost of $1,501 to $5,000, the department shall use a ten-year trended depreciation schedule. The trended schedule will be the same as ARM 42.21.155, category 8.

 

YEAR NEW/ACQUIRED	TRENDED % GOOD
2014 2015	92%
2013 2014	85% 86%
2012 2013	77% 79%
2011 2012	70%
2010 2011	61% 62%
2009 2010	52% 53%
2008 2009	44% 42%
2007 2008	35%
2006 2007	28%
2005 and older 2006	26% 25%
Older	20%

 

(d) For equipment that has an acquired cost of $5,001 to $15,000, the department shall use the trended depreciation schedule for heavy equipment. The schedule will be the same as ARM 42.21.131.

 

YEAR NEW/ACQUIRED	TRENDED % GOOD
2015 2016	80%
2014 2015	65%
2013 2014	62% 60%
2012 2013	58% 57%
2011 2012	52%
2010 2011	49% 48%
2009 2010	43% 46%
2008 2009	40% 43%
2007 2008	37% 38%
2006 2007	34% 36%
2005 2006	33% 34%
2004 2005	32% 33%
2003 2004	29% 30%
2002 2003	27% 28%
2001 2002	25% 26%
2000 2001	23%
1999 2000	22% 23%
1998 1999	21%
1997 1998	21% 20%
1996 1997 and older	19% 20%

 

(e) For rental video tapes and digital video disks, the following trended depreciation schedule will be used:

 

YEAR NEW/ACQUIRED	TRENDED % GOOD
2014 2015	25%
2013 2014	15%
2012 2013 and older	10%

 

(2) through (4) remain the same.

(5) This rule is effective for tax years beginning after December 31, 2014 2015.

 

AUTH: 15-1-201, 15-23-108, MCA

IMP: 15-6-135, 15-6-138, 15-6-202, 15-6-219, MCA

 

REASON: The department proposes further amending ARM 42.21.113 to add a bottom row exclusively for older years in tables (a) through (c) to more precisely apply a 5 percent to 25 percent residual value as described in ARM 42.21.155(1).

 

42.21.123 FARM MACHINERY AND EQUIPMENT (1) remains the same.

(2) The market value for farm machinery and equipment shall be the "average wholesale" value most current quick sale as shown in the Iron Solutions, Northwest Region Official Guide, Fall Edition, for the year previous to online version of the Green Guide known as the Equipment Watch, as of October of the year prior to the year of the assessment appraisal. This online guide may be reviewed in the department or purchased from the publisher: North American Equipment Dealers Association, 1195 Smizer Mill Road, Fenton, Missouri 63026-3480 at equipmentwatch.com or Dataquest, 1290 Ridder Park Drive, San Jose, California 95131.

(3) For all farm machinery and equipment that cannot be valued under (2), the department has developed a manual to value the equipment. This manual will be used in conjunction with the depreciation schedule in (5) when valuing farm equipment and machinery. The purpose of the manual developed by the department is to arrive at values which approximate average wholesale quick sale value. The department's farm machinery manual is hereby incorporated by reference. Customers can contact the department to obtain copies.

(4) and (5) remain the same.

(6) A trended average wholesale quick sale value shall be applied to equipment if:

(a) the equipment cannot be valued under (2) but an average wholesale a quick sale value is available for the same make and model with a different year new; and

(b) the equipment cannot be valued under (4) or the value as calculated under (4) results in a higher value being placed on a piece of farm equipment than the last year listed in the current Official Guide mentioned guide cited in (2) for the same make and model. The trended average wholesale quick sale value for farm equipment shall be ascertained by trending the average wholesale quick sale as found in the guide in (2), for the same make and model with a different year new. The trend factors are the same as those mentioned in (4).

(7) If the methods mentioned in (2) through (5) cannot be used to ascertain average wholesale quick sale value for farm machinery and equipment, the owner or applicant must certify to the department the year acquired and the acquired price before that value can be applied to the schedule in (8).

(8) The trended depreciation schedule referred to in (2) through (6) is listed below and shall be used for tax year 2015 2016. The schedule is derived by using the guidebook listed in (2) as the data base. The values derived through use of the trended depreciation schedule will approximate average wholesale quick sale value.

 

YEAR NEW/ACQUIRED	TRENDED % GOOD AVERAGE WHOLESALE
2015 2016	80%
2014 2015	75% 54%
2013 2014	66% 48%
2012 2013	61% 47%
2011 2012	58% 46%
2010 2011	55% 44%
2009 2010	48% 43%
2008 2009	48% 41%
2007 2008	47% 40%
2006 2007	44% 39%
2005 2006	41% 38%
2004 2005	39% 38%
2003 2004	35% 38%
2002 2003	31% 36%
2001 2002	28% 35%
2000 2001	27% 34%
1999 2000 and older	21% 30%

 

(9) remains the same.

(10) This rule is effective for tax years beginning after December 31, 2014 2015.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-207, 15-6-219, MCA

 

REASON: The department proposes further amending ARM 42.21.123 to change the farm machinery valuation source. Each year the department performs valuation look-ups and calculates the depreciation trends for the coming year using values that are available at that time. The department has been using an online valuation guide for heavy equipment since 2010. That online guide now also includes farm machinery values.

Therefore, the department proposes transitioning to this single online source for valuing both heavy equipment and farm machinery beginning in 2016. The proposed transition to using the online Equipment Watch guide will save the department in excess of $20,000 in subscription fees annually because the proposed change eliminates the need for the department to separately purchase hard copies of the Iron Solutions Northwest Region Official Guide to use for valuing farm machinery.

Owners of farm machinery and equipment will notice a significant change, either up or down depending on the model year of the equipment, in the trended good percentage table during the first year of this proposed transition. For example, as proposed in the table amendments for 2016 using the online Equipment Watch guide, farm machinery and equipment acquired new in 2015 will see a trended percentage wholesale change from 75 percent good down to 54 percent good. At the same time, equipment acquired new in 2004 will have a trended percentage wholesale change from 35 percent up to 38 percent. However, after this initial transition year, the department expects future valuation differences to stabilize and the percentages in the chart to fluctuate minimally from year-to-year as they have historically.

 

42.21.131 HEAVY EQUIPMENT (1) The wholesale market value of heavy equipment shall be the most current quick sale as shown in the "Green Guide" and "Green Guide for Older Equipment" or the on-line online version of the Green Guide known as Equipment Watch, as of January 1 of October of the year prior to the year of assessment appraisal. This online guide may be reviewed in the department or purchased from the publisher and is incorporated by reference: Dataquest, 1290 Ridder Park Drive, San Jose, California 95131.

(2) For all heavy equipment which cannot be valued under (1), the department shall try to ascertain the original FOB (free on board value) through old heavy equipment valuation guidebooks. If an original FOB cannot be ascertained, the department may use trending to determine the FOB. The FOB or "trended" FOB will be used in conjunction with the depreciation schedule in (5) to arrive at a value which approximates wholesale value. The trend factors are calculated using the most recent Contractor's Equipment factors available in the Marshall & Swift Valuation Service Guide for the year of assessment appraisal. The Marshall & Swift Valuation Service Guide, published by Marshall and Swift Publication Company, 915 Wilshire Boulevard, 8th Floor, P.O. Box 26307, Los Angeles, California 90026-0307, is adopted by reference.

(3) and (4) remain the same.

(5) The trended depreciation schedule referred to in (2), (3), and (4) is listed below and shall be used for tax year 2015 2016. The values derived through the use of these percentages approximate the "quick sale" values as calculated in provided in the guidebooks listed in (1).

 

YEAR NEW/ACQUIRED	TRENDED % GOOD WHOLESALE
2015 2016	80%
2014 2015	65%
2013 2014	62% 60%
2012 2013	58% 57%
2011 2012	52%
2010 2011	49% 48%
2009 2010	43% 46%
2008 2009	40% 43%
2007 2008	37% 38%
2006 2007	34% 36%
2005 2006	33% 34%
2004 2005	32% 33%
2003 2004	29% 30%
2002 2003	27% 28%
2001 2002	25% 26%
2000 2001	23%
1999 2000	22% 23%
1998 1999	21%
1997 1998	21% 20%
1996 1997 and older	19% 20%

 

(6) This rule is effective for tax years beginning after December 31, 2014 2015, and applies to all heavy equipment.

 

AUTH: 15-1-201, 15-23-108, MCA

IMP: 15-6-135, 15-6-138, 15-6-219, MCA

 

REASON: The department proposes further amending ARM 42.21.131 to strike outdated references to hardcopy valuation guides in (1). The department has fully transitioned away from using the hardcopy guides to use of the online guide. This has improved efficiency and created subscription cost savings. The department further proposes amending (1) to clarify that heavy equipment assessments are based on values determined in the fall of the year prior to the year of appraisal and replacing the word "assessment" with "appraisal" to reflect the term currently used.

 

42.21.137 SEISMOGRAPH UNITS AND ALLIED EQUIPMENT (1) through (3) remain the same.

(4) The trended depreciation schedules referred to in (1) through (3) are listed below and shall be used for tax year 2015 2016.

 

SEISMOGRAPH UNIT
YEAR NEW/ACQUIRED	% GOOD		TREND FACTOR	TRENDED % GOOD		WHOLESALE FACTOR		WHOLESALE % GOOD
2015 2016	100%		1.000	100%		80%		80%
2014 2015	85%		1.000	85%		80%		68%
2013 2014	69%		1.009	70%		80%		56%
2012 2013	52%		1.010 1.021	53%		80%		42%
2011 2012	34%		1.038 1.023	35%		80%		28%
2010 2011	23%		1.066 1.051	25% 24%		80%		20% 19%
2009 2010-2006	18%		1.051 1.079	19%		80%		15% 16%
2005 and older	5%							5%
SEISMOGRAPH ALLIED EQUIPMENT
YEAR NEW/ ACQUIRED		% GOOD			TREND FACTOR		TRENDED % GOOD
2015 2016		100%			1.000		100%
2014 2015		85%			1.000		85%
2013 2014		69%			1.009		70%
2012 2013		52%			1.010 1.021		53%
2011 2012		34%			1.038 1.023		35%
2010 2011		23%			1.066 1.051		25% 24%
2009 2010-2006		18%			1.051 1.079		19%
2005 and older		5%					5%

 

(5) This rule is effective for tax years beginning after December 31, 2014 2015.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-219, MCA

 

42.21.138 OIL AND GAS FIELD MACHINERY AND EQUIPMENT (1) and (2) remain the same.

(3) The trended depreciation schedule referred to in (1) and (2) is listed below and shall be used for tax year 2015 2016.

YEAR NEW/ ACQUIRED	% GOOD	TREND FACTOR	TRENDED % GOOD
2015 2016	100%	1.000	100%
2014 2015	95%	1.000	95%
2013 2014	90%	1.009	91%
2012 2013	85%	1.010 1.021	86% 87%
2011 2012	79%	1.038 1.023	82% 81%
2010 2011	73%	1.066 1.051	78% 77%
2009 2010	68%	1.051 1.079	71% 73%
2008 2009	62%	1.088 1.064	67% 66%
2007 2008	55%	1.137 1.101	63% 61%
2006 2007	49%	1.204 1.151	59% 56%
2005 2006	43%	1.265 1.219	54% 52%
2004 2005	37%	1.372 1.281	51% 47%
2003 2004	31%	1.420 1.390	44% 43%
2002 2003	26%	1.449 1.438	38% 37%
2001 2002	23%	1.457 1.467	34%
2000 2001 and older	21%	1.471 1.475	31%

 

(4) and (5) remain the same.

(6) This rule is effective for tax years beginning after December 31, 2014 2015.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-213, 15-6-219, MCA

 

42.21.139 WORK-OVER AND SERVICE RIGS (1) through (3) remain the same.

(4) For self-propelled wheeled work-over and service rigs, an additional 80 percent wholesale factor shall be used in determining market value in conjunction with the schedules mentioned referenced in (2).

(5) The trended depreciation schedule referred to in (2) and (4) is listed below and shall be used for tax year 2015 2016.

 

YEAR/NEW ACQUIRED	% GOOD	TREND FACTOR	WHOLESALE FACTOR	TRENDED WHOLESALE % GOOD
2015 2016	100%	1.000	80%	80%
2014 2015	92%	1.000	80%	74%
2013 2014	84%	1.009	80%	68%
2012 2013	76%	1.010 1.021	80%	61% 62%
2011 2012	67%	1.038 1.023	80%	56% 55%
2010 2011	58%	1.066 1.051	80%	49%
2009 2010	49%	1.051 1.079	80%	41% 42%
2008 2009	39%	1.088 1.064	80%	34% 33%
2007 2008	30%	1.137 1.101	80%	27% 26%
2006 2007	24%	1.204 1.151	80%	23% 22%
2005 2006 and older	21%	1.265 1.219	80%	21% 20%

 

(6) This rule is effective for tax years beginning after December 31, 2014 2015.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-219, MCA

 

REASON: The department proposes further amending ARM 42.21.139 to make a grammatical revision in (4).

 

42.21.140 OIL DRILLING RIGS (1) Bids for new rigs will be solicited from manufacturers of oil drilling rigs to determine current replacement costs based on the depth rating listed below. For each depth rating listed below for oil drilling rigs, there will be two replacement cost categories. One category will represent current replacement cost of a mechanical rig and the second category will represent current replacement cost of an electric rig. Each rig as it is assessed will be placed in a value category based on its depth.

 

DEPTH CATEGORIES
Class		Depth Capacity
1	. . . . . . . . . . . . . . . . . . . . . . . . . . .	0     to 3,000 ft.
2	. . . . . . . . . . . . . . . . . . . . . . . . . . .	3,001 ft. to 5,000 ft.
3	. . . . . . . . . . . . . . . . . . . . . . . . . . .	5,001 ft. to 8,000 ft.
4	. . . . . . . . . . . . . . . . . . . . . . . . . . .	7,501 8,001 ft. to 10,000 ft.
5	. . . . . . . . . . . . . . . . . . . . . . . . . . .	10,001 ft. to 12,500 ft.
6	. . . . . . . . . . . . . . . . . . . . . . . . . . .	12,501 ft. to 15,000 ft.
7	. . . . . . . . . . . . . . . . . . . . . . . . . . .	15,001 ft. to 20,000 ft.
8	. . . . . . . . . . . . . . . . . . . . . . . . . . .	20,001 ft. and over

 

MANUFACTURER'S	ELECTRICAL	MECHANICAL
DEPTH RATING	RIG R.C.N	RIG R.C.N
0     -  3,000 ft.	$	$ 285,209
3,001 ft. -  5,000 ft.		432,135
5,001 ft. -  7,500 ft.	868,250	654,750
7,501 ft. - 10,000 ft.	1,167,210	998,750
10,001 ft. - 12,500 ft.	1,265,500	1,130,600
12,501 ft. - 15,000 ft.	1,720,400	1,538,500
15,001 ft. - 20,000 ft.	1,990,100
20,001 ft. and over	2,036,047

 

The depth capacity for drilling rigs will be based on the "Manufacturers Depth Rating." These replacement costs will then be depreciated to arrive at market value according to the schedule mentioned provided in (2).

(2) The department shall prepare a ten-year trended depreciation schedule for oil drilling rigs. The trended depreciation schedule shall be derived from depreciation factors published in the Marshall & Swift Valuation Service Guide. The "% good" for all drill rigs less than one year old shall be 100 percent. The trended depreciation schedule for tax year 2015 2016 is listed below.

 

YEAR NEW/ ACQUIRED	% GOOD	TREND FACTOR	TRENDED % GOOD
2015 2016	100%	1.000	100%
2014 2015	92%	1.000	92%
2013 2014	84%	1.009	85%
2012 2013	76%	1.010 1.021	77% 78%
2011 2012	67%	1.038 1.023	70% 69%
2010 2011	58%	1.066 1.051	62% 61%
2009 2010	49%	1.051 1.079	51% 53%
2008 2009	39%	1.088 1.064	42% 41%
2007 2008	30%	1.137 1.101	34% 33%
2006 2007	24%	1.204 1.151	29% 28%
2005 2006 and older	21%	1.265 1.219	27% 26%

 

(3) remains the same.

(4) This rule is effective for tax years beginning after December 31, 2014 2015.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-219, MCA

 

REASON: The department proposes further amending ARM 42.21.140 to correct a wrong number in the depth category table and to make a grammatical revision in (1).

 

42.21.151 LOCALLY ASSESSED CABLE TELEVISION SYSTEMS 

(1) through (3) remain the same.

(4) The trended depreciation schedules referred to in (2) and (3) are listed below and shall be in effect for tax year 2015 2016.

 

FIVE-YEAR "DISHES"
YEAR NEW/ ACQUIRED	% GOOD	TREND FACTOR	TRENDED % GOOD
2014 2015	85%	1.000	85%
2013 2014	69%	1.010	70%
2012 2013	52%	1.018 1.023	53%
2011 2012	34%	1.047 1.032	36% 35%
2010 2011 and older	23%	1.080 1.061	25% 24%

 

TEN-YEAR "TOWERS"
YEAR NEW/ ACQUIRED	% GOOD	TREND FACTOR	TRENDED % GOOD
2014 2015	92%	1.000	92%
2013 2014	84%	1.010	85%
2012 2013	76%	1.018 1.023	77% 78%
2011 2012	67%	1.047 1.032	70% 69%
2010 2011	58%	1.080 1.061	63% 62%
2009 2010	49%	1.072 1.094	53% 54%
2008 2009	39%	1.103 1.086	43% 42%
2007 2008	30%	1.146 1.117	34%
2006 2007	24%	1.209 1.161	29% 28%
2005 2006 and older	21%	1.265 1.225	27% 26%

 

(5) This rule is effective for tax years beginning after December 31, 2014 2015.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-219, MCA

 

42.21.153 SKI LIFT EQUIPMENT (1) and (2) remain the same.

(3)  The depreciation schedules shall be determined by the life expectancy of the equipment and will normally compensate for the loss in value due to ordinary wear and tear, offset by reasonable maintenance, and ordinary functional obsolescence due to the technological changes during the life expectancy period.

(4) The trend and depreciation schedule referred to in (2) and (3) is listed below.

YEAR NEW/ ACQUIRED	% GOOD	TREND FACTOR	TRENDED % GOOD
2014 2015	92%	1.000	92%
2013 2014	84%	1.010	85%
2012 2013	76%	1.018 1.023	77% 78%
2011 2012	67%	1.047 1.032	70% 69%
2010 2011	58%	1.080 1.061	63% 62%
2009 2010	49%	1.072 1.094	53% 54%
2008 2009	39%	1.103 1.086	43% 42%
2007 2008	30%	1.146 1.117	34%
2006 2007	24%	1.209 1.161	29% 28%
2005 2006 and older	21%	1.265 1.225	27% 26%

 

(a) and (b) remain the same.

(4)(5) This methodology is effective for tax years beginning after December 31, 2014 2015.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-219, MCA

 

REASON: The department proposes further amending ARM 42.21.153 to add new (4) to provide lead-in language for the depreciation schedule that follows.

 

42.21.155 DEPRECIATION SCHEDULES (1) remains the same.

(2) The trended depreciation schedules for tax year 2015 2016 are listed below. The categories are explained in ARM 42.21.156. The trend factors are derived according to ARM 42.21.156 and 42.21.157.

 

CATEGORY 1
YEAR NEW/ ACQUIRED	% GOOD	TREND FACTOR	TRENDED % GOOD
2014 2015	70%	1.000	70%
2013 2014	45%	0.986 0.979	44%
2012 2013	20%	0.934 0.966	19%
2011 and older 2012	10%	0.861 0.915	9%
Older			5%

 

CATEGORY 2
YEAR NEW/ ACQUIRED	% GOOD	TREND FACTOR	TRENDED % GOOD
2014 2015	85%	1.000	85%
2013 2014	69%	0.998 1.024	69% 71%
2012 2013	52%	0.960 1.022	50% 53%
2011 2012	34%	0.973 0.984	33%
2010 and older 2011	23%	0.977 0.997	22% 23%
Older			18%

 

CATEGORY 3
YEAR NEW/		TREND	TRENDED
ACQUIRED	% GOOD	FACTOR	% GOOD
2014 2015	85%	1.000	85%
2013 2014	69%	0.999 0.995	69%
2012 2013	52%	0.983 0.994	51% 52%
2011 2012	34%	0.955 0.979	32% 33%
2010 and older 2011	23%	0.921 0.950	21% 22%
Older			18%

CATEGORY 4
YEAR NEW/		TREND	TRENDED
ACQUIRED	% GOOD	FACTOR	% GOOD
2014 2015	85%	1.000	85%
2013 2014	69%	0.996 0.989	69% 68%
2012 2013	52%	0.995 0.985	52% 51%
2011 2012	34%	0.991 0.984	34% 33%
2010 and older 2011	23%	0.978 0.981	23%
Older			18%

 

CATEGORY 5
YEAR NEW/		TREND	TRENDED
ACQUIRED	% GOOD	FACTOR	% GOOD
2014 2015	85%	1.000	85%
2013 2014	69%	1.008 1.013	70%
2012 2013	52%	1.020 1.021	53%
2011 2012	34%	1.050 1.033	36% 35%
2010 and older 2011	23%	1.059 1.064	24%
Older			18%

 

CATEGORY 6
YEAR NEW/		TREND	TRENDED
ACQUIRED	% GOOD	FACTOR	% GOOD
2014 2015	85%	1.000	85%
2013 2014	69%	1.015 1.016	70%
2012 2013	52%	1.032 1.030	54%
2011 2012	34%	1.060 1.051	36%
2010 and older 2011	23%	1.097 1.088	25%
Older			18%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3) This rule is effective for tax years beginning after December 31, 2014 2015.

 

AUTH: 15-1-201, MCA

IMP: 15-6-135, 15-6-138, 15-6-219, MCA

 

REASON: The department proposes further amending ARM 42.21.155 to add a bottom row exclusively for "older" years in all of the tables to more precisely apply "a 5 percent to 20 percent residual" value as described in (1).

 

42.22.1311 INDUSTRIAL MACHINERY AND EQUIPMENT TREND FACTORS (1) The trend factors will be used to value industrial machinery and equipment for ad valorem tax purposes pursuant to ARM 42.22.1306. The department uses annual cost indexes from the Marshall & Swift Valuation Service Guide. The current index is divided by the annual index for each year to arrive at a trending factor. Each major industry has its own trend table. Where no index existed in the Marshall & Swift Valuation Service Guide for a particular industry, that industry was grouped with other industries using similar equipment. The department will utilize the machinery and equipment trend factors that are set forth in the following tables: tables in (2) and (3).

(2) remains the same.

(3) Tables 1 through 32 represent the yearly trend factors for each of the categories.

 

 

 

 

	YEAR		TABLE 26		TABLE 27		TABLE 28		TABLE 29		TABLE 30
			Refrigeration		Rubber		Steam Power		Textile		Warehousing
2014		1.000		1.000		1.000		1.000		1.000
2013		1.010		1.008		1.007		1.010		1.011
2012		1.017		1.009		1.007		1.015		1.027
2011		1.048		1.036		1.036		1.041		1.057
2010		1.084		1.066		1.073		1.067		1.087
2009		1.076		1.051		1.063		1.052		1.081
2008		1.113		1.089		1.099		1.085		1.115
2007		1.161		1.132		1.152		1.122		1.154
2006		1.229		1.192		1.229		1.170		1.196
2005		1.288		1.242		1.294		1.214		1.238
2004		1.389		1.332		1.411		1.300		1.325
2003		1.439		1.379		1.463		1.338		1.371
2002		1.468		1.407		1.493		1.357		1.387
2001		1.480		1.411		1.498		1.363		1.392
2000		1.494		1.423		1.510		1.374		1.400
1999		1.523		1.444		1.533		1.395		1.426
1998		1.529		1.450		1.535		1.397		1.428
1997		1.545		1.466		1.546		1.408		1.433
1996		1.570		1.486		1.562		1.432		1.456
1995		1.598		1.514		1.587		1.452		1.469
2015		1.000		1.000		1.000		1.000		1.000
2014		1.010		1.008		1.006		1.008		1.012
2013		1.024		1.020		1.017		1.020		1.026
2012		1.031		1.020		1.017		1.026		1.042
2011		1.062		1.048		1.046		1.052		1.072
2010		1.098		1.078		1.083		1.078		1.103
2009		1.091		1.063		1.073		1.063		1.097
2008		1.128		1.101		1.109		1.096		1.131
2007		1.177		1.144		1.162		1.134		1.171
2006		1.245		1.206		1.241		1.183		1.214
2005		1.306		1.256		1.307		1.227		1.256
2004		1.408		1.347		1.424		1.314		1.344
2003		1.458		1.394		1.477		1.352		1.391
2002		1.488		1.423		1.507		1.372		1.408
2001		1.500		1.427		1.512		1.378		1.413
2000		1.514		1.439		1.524		1.388		1.421
1999		1.544		1.460		1.548		1.409		1.447
1998		1.550		1.466		1.549		1.411		1.449
1997		1.566		1.482		1.561		1.423		1.454
1996		1.591		1.503		1.577		1.447		1.478
1995		1.619		1.531		1.603		1.467		1.491

 

 

 

AUTH: 15-1-201, MCA

IMP: 15-6-138, 15-8-111, MCA

 

REASON: The department proposes further amending ARM 42.22.1311 to correct a punctuation error in (1).

 

5. Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: Laurie Logan, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or e-mail [email protected] and must be received no later than December 1, 2015.

 

6. Laurie Logan, Department of Revenue, Director's Office, has been designated to preside over and conduct this hearing.

 

7. The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notice regarding a particular subject matter or matters. Notices will be sent by e-mail unless a mailing preference is noted in the request. A written request may be mailed or delivered to the person in 5 above or faxed to the office at (406) 444-3696, or may be made by completing a request form at any rules hearing held by the Department of Revenue.

 

8. An electronic copy of this notice is available on the department's web site at revenue.mt.gov/rules. The department strives to make the electronic copy of this notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. While the department also strives to keep its web site accessible at all times, in some instances it may be temporarily unavailable due to system maintenance or technical problems.

 

9. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

10. With regard to the requirements of 2-4-111, MCA, the department has determined that the amendment of ARM 42.21.123 will significantly and directly impact small businesses that own and pay property tax on farm machinery and equipment. The department has determined that the amendment of the remaining above-stated rules will not significantly and directly impact small businesses. The department's impact analysis is available at revenue.mt.gov/rules or upon request from the person in 5.

 

 

/s/ Laurie Logan                          /s/ Mike Kadas

Laurie Logan                               Mike Kadas

Rule Reviewer                             Director of Revenue

         

Certified to the Secretary of State October 19, 2015