Lake County finds more than $100,000 in back taxes

An investigation by Lake County officials found a handful of properties that had not been properly assessed by the Montana Department of Revenue for a number of years. Thus far more than $160,000 in revenue has been found, county officials said.

County Finance and Budget Director Scott Beggs said that in March he began using a combination of aerial maps and permits for home improvements to look into whether or not properties within the county were being properly assessed.

What he found was that there were buildings in the photos without a corresponding tax bill. He compiled a list of 600 properties that he thought might need to be reassessed. Of those, 140 or so were mobile homes that are taxed through a different method, but some others have turned out to have been undervalued. Lake County Commissioner Bill Barron said at the Polson Chamber of Commerce luncheon that one of the properties was a home with an approximate $1 million value that had not been assessed for a number of years.

“Some of these have been missed for over a decade,” Beggs said. “We had a structure that was built in 1995 and had never been taxed. By Montana law, we can only go back a 10 year window (to collect the taxes).”

The Montana Department of Revenue has started to issue re-assessments of the properties in question. The first round included seven properties worth more than $163,000 in taxes. Another 12 properties were identified last week, but Beggs did not have a total available for their value.

“We’ll probably end up proving somewhere between 200 and 250 properties,” Beggs said.

He noted that one of the properties in the first batch of re-assessments owed $111,000 in back taxes, so it is difficult to predict how much the reevaluation of the properties will produce. Beggs said six of the seven property owners in the first round of re-assessments have already paid off the taxes. County officials are giving people time to pay on the bill if they are impacted, Beggs said. Residents have 30 days after the Department of Revenue issues a notice of re-assessment to protest the taxes. If the taxes aren’t protested, collection responsibilities then fall to the county government.

Reactions to the tax bills have varied.

“It has been all over the board,” Beggs said. “Some are saying ‘I didn’t know I owed property taxes. I’ve never paid taxes since I got ownership of the building.’ Others are saying: ‘Hey, I know I had a good deal, it is my responsibility to go to the Department of Revenue and change the value.’”

Beggs said few people rarely question a low tax bill, but if someone is suspicious their bill is not accurate, people can contact the Montana Department of Revenue and Lake County’s budget office to try to get a re-assessment done.

Overall Beggs believes the found revenue will benefit taxpayers of the county because as more revenue comes in, the fewer the number of mils that need to be levied in order to get the county the amount of funds it needs.

Beggs said about 60 percent of the revenue goes to the county budgets, and around 40 percent goes to other taxable entities in the counties like school districts.

“The schools are saying gee, we’re getting some extra cash we didn’t plan on,” Beggs said.

Commissioner Barron said that the information has been forwarded to officials within the Department of Revenue and the Montana Association of Counties.

“We don’t think this is unique to Lake County,” Barron said. “They made other counties aware of it at our meetings and I think now (other counties) are looking at this.

Montana Department of Revenue Spokeswoman Mary Ann Dunwell said that she does not anticipate more revenue to be found in the original list Beggs submitted.

“We’ve looked at every single one of them,” Dunwell said. “Of the 488 we came up with, we found 15 that needed adjustment.”

Dunwell said the annual tax revenue generated by those 15 properties is $10,447. She said her list did not contain a home with a market value of $1 million, but that she did know that at least three of the properties had back taxes owed for more than one year.

Dunwell said that while local governments obviously can use every penny necessary, the found revenue represent a fraction of the total tax revenue in Lake County.

“Fifteen parcels that we found needed adjustment,” Dunwell said. “We work with 40,000 parcels in Lake County, and those propperties generate $37 million annually to the counties and other tax districts.”