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Montana

For the complete text of Montana statutes please refer to the Montana Department of Revenue and for property tax information please refer to the Montana Department of Revenue - Property Taxes.

Property Classification:

Montana divides its real and personal property into twelve distinct classes (class one through ten, class twelve, and class thirteen). Each class is taxed at a different percentage of market value, gross proceeds, or productive capacity.

All "land" is classified according to its use or uses and graded within each class according to soil and productive capacity.

Forest land is classified as "class ten" property. Class ten property is taxed at 0.35% of its forest productivity value. (MCA 15-6-143 ).

Criteria for Forestland Classification:

"Forest land" is defined as contiguous land of 15 acres or more in one ownership that is capable of producing timber that can be harvested in commercial quantities and that is producing timber unless the trees have been removed by man through harvest or by natural disaster. ( MCA 15-44-102)

Forest land includes land that has not been converted to another use and on which the annual net wood production equals or exceeds 25 cubic feet an acre at the culmination of mean annual increment.

The phrase "capable of producing timber that can be harvested in commercial quantities" means forest land that (1) can produce 25 cubic feet or more of stemwood per acre per year in live softwood trees at the culmination of the mean annual increment for fully stocked, natural sands and (2) meets the stocking requirements set forth by an administrative rule. (ARM 42.20.701)

A landowner may apply for a 20-year reduction in value for forest lands upon which trees have been destroyed by fire, disease, insect infestation, or other natural disaster, such that the lands affected will not meet minimum stocking requirements. (MCA 15-44-104)

Valuation and Assessment:

Forest productivity value - means the value of forest land for assessment purposes, which is determined only on the basis of its potential to produce timber, other forest products, and associated agricultural products through an income approach. In applying such value, the Department of Revenue has divided the state into appropriate forest valuation zones and established a uniform system of forest land classification that takes into consideration the productive capacity of each site to grow forest products and furnish other associated agricultural uses (MCA 15-44-103 ).

The Montana Department of Revenue assigns all forest land to one of the following forest site productivity classes.

Class I - (excellent productivity): > 85 cubic feet of wood per acre per year

Class II - (good productivity): 65 - 84.90 cubic feet of wood per acre per year

Class III - (fair productivity): 45 - 64.99 cubic feet of wood per acre per year

Class IV - (poor productivity): 25 - 44.99 cubic feet of wood per acre per year

Noncommercial: < 25 cubic feet of wood per acre per year

Forest Valuation Zones (ARM 42.20.166)

The Department of Revenue has divided the state into forest valuation zones, with each zone designated to recognize the uniqueness of marketing areas, timber types, growth rates, access, and other pertinent factors that affect value. The designated forest valuation zones and the counties contained within each zone are:

Zone 1 - Northwest: Flathead, Lake, Lincoln and Sanders counties;

Zone 2 - West Central: Granite, Mineral, Missoula, Powell and Ravalli counties;

Zone 3 - South Central: Beaverhead, Deer Lodge, Jefferson, Lewis and Clark, Madison and Silver Bow counties;

Zone 4 - Central: Broadwater, Cascade, Gallatin, Glacier, Meagher, Park, Pondera and Teton counties; and

Zone 5 - Eastern: Blaine, Big Horn, Carbon, Carter, Chouteau, Custer, Fallon, Fergus, Garfield, Golden Valley, Hill, Judith Basin, Liberty, Musselshell, Petroleum, Phillips, Powder River, Prairie, Rosebud, Sweet Grass, Stillwater, Toole, Treasure, Wheatland and Yellowstone counties.

Forest Land Valuations by Zone (ARM 42.20.170)

The following is the schedule for the classification and valuation of forest land

Productivity Class	Zone 1 $/acre	Zone 2 $/acre	Zone 3 $/acre	Zone 4 $/acre	Zone 5 $/acre
1	1,259.05	1,145.39	982.23	1,168.96	611.46
2	969.92	882.57	765.03	915.02	476.30
3	680.79	619.74	547.83	661.08	341.14
4	391.66	356.92	330.63	407.14	205.98

Example:

Assume that you have 120 acres of forest land located in zone 3. Of that 120 acres 40 fall in productivity class 2 (good productivity) and the rest under class 3 (fair productivity). Further assume that the mill levy is 390 mills.

40 acres x 765.03 = $30,601.20 (appraised value)
80 acres x 547.83 = $43,826.40 (appraised value)

Total Forest Land Appraised Value = $74,427.60

Taxable Value: $74,427.60 x .0035 (tax class 10) = $260.49

Tax: $260.49 x .390 = $101.59

Special Circumstances: A landowner may apply for a 20-year reduction in value for forest lands upon which trees have been destroyed by fire, disease, insect infestation, or other natural disaster, such that the lands affected will not meet minimum stocking requirements. If a landowner shows to the department's satisfaction that the landowner's forest lands have been destroyed the department shall reduce the value of the forest land by 50% of the original forest productivity value per year. (MCA 15-44-104 ).

Severance Tax:

Montana has a severance tax of 15¢ per MBF. The tax is administered through the Department of Natural Resources and Conservation, Forestry Division as part of their slash disposal program. The proceeds from the severance tax go to the cooperative extension service for the state.