Bills aimed at closing ag tax loopholes fall short

A push to address concerns that loopholes in Montana’s agricultural tax system allow luxury homes to claim benefits intended for working farms and ranches has fallen short, with the second of two bills advanced as potential reform measures this year failing on a 40-59 vote on the House floor Mar. 20.

That bill, House Bill 27 would have reworked the state tax code so it no longer automatically awards agricultural tax status to large properties without documented agricultural income. It also would have adjusted a policy that automatically grants a partial agricultural tax treatment to mid-size properties of at least 20 acres, instead classifying them as “idle” land if their owners don’t report income from farming or ranching.

The other bill, Senate Bill 4, would have changed tax calculations for land beneath homes on agricultural land to provide less tax benefit for lakefront parcels and other properties that would otherwise be taxed as high-value real estate. It was voted down by the Senate Taxation Committee Feb. 13.