Montana Ranch Land

Definition of Agricultural Land Use in Montana.
The term "agricultural" for property tax purposes, refers to "the production of food, feed, and fiber commodities, livestock and poultry, bees, fruits and vegetables, and sod, ornamental, nursery, and horticultural crops that are raised, grown, or produced for commercial purposes." The term also refers to the raising of domestic animals and wildlife in domestication or a captive environment.
[Section 15-1-101(a), MCA)]

Methodology for Valuing Agricultural Land in Montana.
Land that is considered agricultural for property tax purposes is valued at 100% of the
productive capacity of the land. Forest land is assessed at 100% of its forest productivity
value and other land in Montana is assessed at 100% of the land's market value 1.
Agricultural land is classified according to its use, which, according Department of Revenue
rules, includes grazing land, continuously cropped hay land, nonirrigated farm land,
nonirrigated continuously cropped farm land, and tillable irrigated land (ARM 42.20.142
through 42.20.146). Within each of these classes, the land is subdivided further into
production categories or grades.
The Department calculates the per-acre productive capacity value in each production
category by dividing the per-acre net income of the land in each land use and production
category by a capitalization rate of 6.4% 2.
Per-acre productive capacity value = per-acre net income the capitalization rate Section 15-7-201(5)(a) provides that the net income used in the valuation formula be determined separately in each land use based on production categories. Section 15-7- 201(5)(b) requires that "net income must be based on commodity price data, which may include grazing fees, crop and livestock share arrangements, cost of production data, and water cost data for the base period using the best available data."


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