Tax Abatements

A property tax abatement reduces the taxable value of property or applies a reduced tax rate to a property. The State of Montana Department of Revenue offers several different types of tax abatements, but the City of Great Falls most often hears requests for a reduced rate for remodeling, reconstruction, or expansion of commercial property; as well as for new and expanding industry.

Tax Abatement for Remodeling, Reconstruction, or Expansion of Existing Commercial Buildings or Structures

If a property owner in Great Falls is undertaking a project that involves remodeling, reconstruction, or an expansion of an existing commercial building that increases its taxable value by at least 5%, the owner may qualify for the property tax exemption during the construction period, and up to 5 years following. The building also must not have been used for business for at least 6 months immediately preceding the date of application.

The exemption only applies to the increase in property value, and the reduced rate is phased out over time according to the following schedule:

Tax Abatement for New and Expanding Industry

Projects eligible for this tax benefit must be adding, or have added, at least $50,000 worth of qualifying improvements to an existing property within the City; or must involve an investment of at least $125,000 into a new property within the City. Applications must fit the State statute definition of “Industry”, which generally encompasses, but is not limited to, manufacturing, extraction and processing of raw materials, and distribution and storage of products.

Under the abatement schedule below, in the first 5 years after a construction permit is issued, qualifying improvements or modernized processes that represent new industry or expansion of an existing industry are taxed at 50% of their taxable value. Each year thereafter, the percentage is increased by equal percentages until the full taxable value is attained in the 10th year. In subsequent years, the property must be taxed at 100% of its taxable value.

Tax Abatement Process

Tax abatements are evaluated by the City Commission. Once an applicant has submitted the appropriate materials to the Planning and Community Development Department, the request is noticed in the Great Falls Tribune, and heard through a public hearing process at a City Commission meeting. Persons interested in applying for tax abatements may either obtain the appropriate application form from the Montana Department of Revenue website or by contacting staff at the City’s Planning and Community Development Department. In addition to providing the information required on the application form, applicants are also required to address the City Commission’s criteria for tax abatement consideration outlined in Resolution 10119. In order to receive the benefit, the taxpayer must have applied for the exemption by March 1st of the year it is first applicable.

Tax abatements follow State code procedures that are fully outlined in 2021 Montana Code Annotated 15-24-1401 and 15-24-1501. Any specific questions can be directed to the Planning and Community Development or the State of Montana Department of Revenue.