Updated June 6, 2026
Published March 19, 2025
What is Senate Bill 117?
Property Tax Legislation Impacting Local Government
Senate Bill 117, introduced by Senator Daniel Zolnikov (SD 22) revises Montana’s property tax regulations, focusing primarily on local government.
SB 117 passed. Effective October 1, 2025.
Fact SheetFinal Bill TextResolution Guidance - Large Taxpayer Reserve Fund
Archived
Below is information distributed during the 2025 Legislative Session, saved for historical purposes.
SB 117 proposed amendment...
SB 117 as amended changes MCA 15-10-420 as follows:
- Provides for full inflation at the average rate of inflation for the prior three years, not to exceed 4%.
- Caps newly taxable property values at 75% for class four property.
- Class one and class two(net/gross proceeds from metal mines) remains at 100%.
- Provides that 100% of the taxable value of class eight property that receives an abatement under MCA 15-6-138(4)(b) is included.
- Provides that 100% of the taxable value of property that receives a new or expanding industry abatement under MCA 15-24-1402 or a historical property abatement under MCA 15-24-1603 from the time the abatement is granted through completion of construction is included.
- Caps newly taxable property values at 40% or 50% for all other property classes.
– 50% if the governmental entity creates a large taxpayer reserve account and meets certain deposit requirements.
– 40% if the governmental entity does not create a large taxpayer reserve account or does not meet the deposit requirements. - Deposit requirements means that 10% of revenue generated from newly taxable property in classes other than class one, two or four MUST be deposited into the large taxpayer reserve account.
- A portion of the revenue from newly taxable property generated from the 10% may be used to offset any required payment to the Department of Revenue for technology enhancing the assessment of newly taxable property.
- Except for the payment allowed for technology enhancements, money deposited into the account must remain in the account and may not be appropriated until a large taxpayer has permanently ceased operations or experienced a significant decrease in taxable value.
- If appropriation of these funds is triggered, there are several criteria outlined in SB117 on allowed uses of the funding.
- “Large Taxpayer” means an individual or entity with taxable value for all property owned that places the individual or entity among the top 20% of taxable value.
- “Significant decrease in taxable value” means a decrease in value for all property classes except class four that equals 25% or more of the prior year taxable value.
- Uses of the Large Taxpayer Reserve Account – If the reserve requirements to expend money in the Reserve Account are met, allowable uses are:
(a) pay for outstanding capital project bonds or other expenses incurred prior to the cessation of operations or significant decrease in taxable value;
(b) for up to 10 years, decrease mill levies of the city, county, or consolidated city-county that are directly impacted by the cessation of operations or significant decrease in taxable value;
(c) attract new industry to the impact area;
(d) provide cash incentives for expanding the employment base of the area impacted the cessation of operations or significant decrease in taxable value; or
(e) invest in infrastructure directly related to new development.
Questions?
Primary Contact
Jason Rittal
Deputy & Legislative Director
Phone: 406-441-5464
jrittal@mtcounties.org
Secondary Contact
Eric Bryson
Executive Director
Phone: 406-461-2084
ebryson@mtcounties.org
Budget & Finance Questions
Nancy Everson
Montana Association of Counties
Phone: 406-441-5486
neverson@mtcounties.org