In a previous article, I began examining Peretti v. State of Montana, Department of Revenue, 373 P.3d 447, 2016 MT 105. The case involves a Montana property taxpayer who had challenged her property tax but received unfavorable rulings from both the County Tax Appeal Board (“CTAB”) and the Montana Tax Appeal Board (“MTAB”), the administrative bodies which first determine property tax values in Montana. The taxpayer then appealed to the state district court in the county were the taxpayer resided and achieved a complete reversal, with the Montana Department of Revenue required to instate the taxpayer’s reduced property value.
However, for the taxpayer the victory was short-lived. On appeal, the Montana Supreme Court reversed and reinstated MTAB’s decision in favor of the Department of Revenue. In reinstating the Montana Department of Revenue’s assessed value, the Montana Supreme Court noted the following points of law concerning Montana property tax appeals:
- The Department’s property tax appraisal is presumed to be correct. at ¶ 14. The taxpayer has the burden to overcome this presumption. Id. The Montana Supreme Court described this as a “substantial burden.” Id. at ¶ 19.
- Courts should not act as authorities on property valuation since the tax appeal boards (CTAB and MTAB) are particularly suited to determine the value of property. at ¶ 14.
- On judicial review of a MTAB decision, the district court only reviews whether (i) the findings of fact are clearly erroneous and (ii) the conclusions of law are correct. at ¶ 14.
- A district court may not (i) substitute its judgment for the judgment of MTAB as to the weight of factual evidence; (ii) engage in a “wholesale substitution” of its opinion for the opinion of the Department; and (iii) re-weigh the evidence on questions of fact. at ¶ 15.
- Assessment formulations by MTAB should be upheld unless there is a clear showing of an abuse of discretion. Peretti, 2016 WL 2689464 at *3, 2016 MT at ¶ 19.
Practice Points: The taxpayer (or tax practitioner representing the taxpayer) in a Montana property tax appeal must develop a thorough and detailed factual record before the CTAB and MTAB. Since the Department of Revenue’s property assessments are presumed correct, the taxpayer must have solid, credible valuation witnesses to support the taxpayer’s proposed assessment values. Taxpayers should not expect to rely upon the district court, after exhausting their administrative remedies, for vindication since the court cannot easily overturn the MTAB’s decision concerning property values.
Taxpayers with questions about property taxation are encouraged to contact Jared Le Fevre to discuss property taxation and possible tax appeals.
Jared M. Le Fevre is a tax attorney and partner in the Tax, Trusts and Estates Practice Group of Crowley Fleck PLLP. Mr. Le Fevre represents taxpayers before the IRS, IRS Independent Office of Appeals, Tax Court, Federal District Court and state tax agencies throughout Montana, Wyoming, North Dakota, Idaho, and Utah. Mr. Le Fevre is involved in federal and state and local tax audits, appeals, and tax resolution throughout these western states. Mr. Le Fevre also advises clients on the tax effects of business and real estate transactions.