Keila Szpaller

(Daily Montanan) Montanans who qualify for a $675 property tax rebate but didn’t apply this year are out of luck.

The Department of Revenue said Tuesday the plain language of the law prohibits any extension, and because each year’s rebate period “stands on its own,” people who missed out this year can’t get double next year.

“To minimize the number of citizens missing the statutory deadline, we endeavored to educate (and later remind) people all across the state of the application period through a series of mailers, press releases, radio and television advertisements, along with other outreach,” said DOR Division Administrator Derek Bell in an email.

This year, the Montana Legislature passed a bill that offered property tax rebates to qualified homeowners. A supplemental bill kicked up the total rebate to a maximum $675 this year and a chance for the same amount next year.

Applications closed Oct. 2, and the Department of Revenue said it approved 207,528 rebates for a total $136.9 million — but not everyone who applied received money. According to those figures, the average rebate was near the maximum of $675.

The DOR said it stopped 2,723 fraudulent claims for $1.75 million, and it denied 10,538 other applications.

In an email, DOR Division Administrator Derek Bell also said the data will change because the department is still processing paper applications and some people may appeal the denials.

Any application postmarked by Oct. 2 will be processed, even if it doesn’t arrive in a timely fashion, the DOR said.

However, some people who qualify for those dollars might not receive them.

The state started the year with an estimated $2.5 billion budget surplus, and the bill to offer rebates, House Bill 222, was one of the contested proposals from Republicans to provide tax relief to people and businesses in Montana.

During the session, Democrats argued the GOP’s approach left too many people behind. They advocated for fixes that addressed Montana’s housing crisis and opposed the rebate legislation because it excluded households such as renters.

In a letter this month to the Department of Revenue, Rep. Laura Smith said she wanted to know why some Montanans were denied rebates and how the application process affected people’s ability to receive the money.

The DOR earlier estimated the potential number of eligible homeowners at 292,200 based on U.S. Census data, or some 85,000 more than the rebates provided so far. Tuesday, the DOR said it had adjusted total eligible homeowners to closer to 250,000, or some 43,000 more than approved so far, and the estimate is “one that we may be able to refine further.” At the maximum $675 rebate, the total not disbursed at least so far would be $29 million.

The DOR said it made the downward adjustment to eligible homeowners based on limits in the bill, such as properties owned by LLCs or trusts, and other factors such as a single geocode with multiple dwellings but just one that was occupied by the owner (the census figure would have included all the dwellings, but just one was eligible for the rebate).

Smith, a Helena Democrat, said in an interview others who are “boxed out” of the rebates include people in the process of building a home or those who haven’t lived in their residences for at least seven months.

In her letter to the DOR, Smith said many of her constituents “expressed concern about how many hoops they had to jump through” to apply for the rebate.

The letter is a records request that asks the department to provide specific information about denials, the application process, and the help the DOR provided to people who called with questions.

“This information request really came from constituents reaching out with all types of frustrations about the application process,” Smith said.

She said some people didn’t know they were eligible, and many were confused about the type of information they needed to provide, such as a geocode.

“It felt like this impossible scavenger hunt for people to get their own money back,” Smith said.

She said it made her wonder how many people started to apply for the rebate only to abandon the application because of red tape — one of her questions to the Department of Revenue.

Since the legislative session ended, Montanans have received record high residential property tax reappraisals, 46% on average.

Some Republican and Democratic counties recently have decided to levy fewer mills — a rate applied to property value — than the state believes they should, prompting a lawsuit from the state. The lawsuit alleges the state won’t be able to adequately fund public schools.

A Beaverhead County Commissioner earlier told the Daily Montanan levying fewer mills still means more dollars to taxing jurisdictions given high reappraisals, and in her letter to the DOR, Smith also asks questions about where additional property tax dollars are going.

Smith said she wanted to know how much of a benefit taxpayers such as NorthWestern Energy, Charter Communications, AT&T and other “corporate and/or centrally assessed” entities stand to gain in reductions. Centrally assessed properties are those such as railroads and telecommunications companies that do business in more than one place in the state.

At a recent presentation in Missoula, former head of the Department of Revenue Dan Bucks said large entities such as telecommunications received a tax break last year worth $107 million, and the shift to residential property taxpayers has been by design.

The DOR did not yet have a response to the questions in Smith’s letter, but Republican Gov. Greg Gianforte earlier praised the rebate.

“Property taxes are too high, which is why we prioritized and secured immediate property tax relief for Montanans this legislative session,” Gianforte said in a statement. “Now, it’s time to build on reforms to reduce the burden of property taxes over the long term.”

In November 2022, the DOR informed the legislature of the amount it would need to lower tax rates for residential (and other) properties to keep taxes neutral given expected reappraisals. The legislature didn’t make the adjustments.

Smith said the rebate doesn’t make up for the problem: “$675, with a requirement of a complex application to get it, isn’t a long-term solution and isn’t enough to make Montanans whole from this failure from the supermajority.”

However, in a recent news release criticizing Democrats for taking rebates they didn’t support, Senate Republicans praised the rebate and HB 222 as part of their work this year. Republicans held a supermajority in the 2023 legislature.

“Republicans passed over $1 billion in tax relief in the 2023 legislative session, the largest tax cut in state history, including over $500 million in property tax relief over the next five years,” the news release said. “Democrats fought Republican efforts to reduce taxes every step of the way.”

In an email, the DOR’s Bell said the department did “extensive outreach” to try to minimize the number of households that didn’t apply this year, and next year is a separate round.

“Pursuant to House Bill 222, each rebate period stands on its own; next year’s rebate focuses upon an applicant’s 2023 eligibility,” Bell wrote. “In other words, applicants will need to meet the principal residence requirements for 2023 and the rebate is evaluated in light of the property taxes paid in 2023.”