In accordance with the memo dated April 15, 2013 from the Montana Department of Revenue, the inflation factor for FY 2014 is 1.03%.

Per 15-10-420, MCA, “a governmental entity that is authorized to impose mills may impose a mill levy sufficient to generate the amount of property taxes actually assessed in the prior year plus one-half of the average rate of inflation for the prior 3 years.”

Additionally, the Department of Revenue shall,“calculate one-half of the average rate of inflation for the prior 3 years by using the consumer price index (CPI), U.S. city average, all urban consumers, using the 1982-84 base of 100, as published by the bureau of labor statistics of the United States department of labor.”

One-half the average rate of (compounding) inflation was determined by dividing the (U.S. All items, 1982-84=100 - non-seasonally adjusted) CPI for December 2012 (229.601) by the CPI for December 2009 (215.949), cubing the quotient, subtracting one, and multiplying the result by 50%.

One-half the average rate of inflation = (((CPI ₂₀₁₂/ CPI ₂₀₀₉) ^ (1/3)) – 1) * 50%
(((229.601/ 215.949) ^ (1/3)) – 1) * 50% = 1.03%

If you have any other questions, please feel free to contact me by way of email at JPatton(at)mt.gov or by phone at 406-444-6634.   (Posted 05/21/2013)

Cities and towns will receive checks this month (July) from the Department of Revenue as reimbursement for personal property tax reductions approved by the 2011 Legislature.  Beginning in September, these reimbursements will be added to quarterly entitlement share payments. Total business tax reimbursements will be about $6-million in each of the next two years for all cities, towns and counties.  This means that entitlement payments will go up about 7% to account for the loss of value on Class 8 Property.

Beginning in FY14, the entitlement growth formula will be reinstituted and cities should see increases of about 3% in their quarterly payments.   (Posted 7/10/12)