Flathead Electric is county's biggest taxpayer

Flathead Electric Cooperative is far and away the biggest property taxpayer in Flathead County and will pump more than $5.2 million into Flathead County tax coffers for the 2016 tax year.

The electric utility’s tax bill includes assessments on pipelines and the non-electric generating property of electric utilities, according to the Montana Department of Revenue.

No. 2 on the top-10 list of taxpayers in the county is CenturyLink, which will pay $2.8 million in taxes.

Flathead County sent out 58,632 tax bills for 2016 real estate taxes. Taxes levied for the year totaled $156.5 million, county Treasurer Adele Krantz said. The first installment of the tax bill was due Nov. 30, with the remainder due May 31, 2017.

Utilities and telecommunication companies rank high among the county’s biggest taxpayers. Third on the 2016 list is NorthWestern Energy, whose taxes on transmission and distribution total $2.6 million for the year.

BNSF Railway Co. is fourth on the list, at $2.3 million, followed by Charter Communications, $1.1 million; Plum Creek (now Weyerhaeuser Co.) Medium Density Fiberboard plant, $932,555; Plum Creek Northwest Plywood, $613,529; Verizon Wireless, $577,699; Winter Sports Inc., $506,096; and Semitool Inc., $497,193.

Many of the same companies have remained in the top 10 for Flathead County for years.

In 2000, Flathead Electric Cooperative was at the top, paying $2.3 million in property taxes.

Plum Creek Timber Co. was second on the 2000 tax year list at $1.7 million, followed by Columbia Falls Aluminum Co. (CFAC) at $1.6 million in real estate taxes. CenturyTel, Montana Power Co., BNSF Railway Co., Cavanaugh’s Partnership, Winter Sports, Semitool and Northwest Healthcare Corp. rounded out the 2000 top 10 taxpayer list.

The total county real estate and personal property taxes for the year 2000 was $66.7 million, well less than half the current amount of taxes levied.

For tax year 1999 Northwestern Telephone Systems-CenturyTel topped the list with $2.97 million in property taxes. Flathead Electric was second on the 1999 list, at $2.5 million. CFAC was No. 4 in 1999, paying $1.5 million in taxes.

According to the county Treasurer’s Office, this year CFAC will pay only $73,862 on the defunct aluminum plant and property — now a Superfund site. In 2010 owners of the aluminum plant paid $462,000 in property taxes.

“It’s not worth much anymore,” Department of Revenue spokeswoman Mary Ann Dunwell said about the CFAC plant that is being demolished. Its taxable value is just $114,455.

Taxable value is the value of property that is subject to mill levies, according to the Department of Revenue. It is calculated by applying the tax rate and any relevant exemptions to the market value.

Therefore, taxable value is typically a fraction of the property’s market value.

In some instances, taxable value is easy to calculate, a state revenue biennial report notes. For example, telecommunication property has a tax rate of 6 percent. If the telecommunication property’s value is $100,000, then its taxable value is $6,000.

Determining the taxable value for residential property, commercial property and agricultural property is a more involved calculation, the report notes.

“Taxable value is calculated differently for different types of property because all taxable property is classified into one of the 14 classes of property that have been determined by the Montana Legislature,” the report states. “While each property within a class is valued in the same manner, not all classes of property are treated the same. Tax rates, exemptions and valuations differ among classes of property as determined by the Legislature.”

A portion of Flathead Electric Cooperative’s property taxes includes Class 9 property, which includes lines and poles that cross county lines.

“Because one section of pipe or one span of power line has no value without the sections attached to it, Class 9 property is centrally assessed if it crosses county boundaries,” Flathead Electric spokeswoman Wendy Ostrom Price said. “The market value of property in local jurisdictions is determined by the portion of property that is located in the local jurisdictions.”

Class 9 property also applies to items such as substations and office buildings, Ostrom Price said, adding “the difference comes in that these items are associated with a specific piece of property.

“It is also noteworthy that due to Flathead Electric Cooperative being in both urban (cities) and rural (country), our Class 9 property has either a 12 percent taxable value (Cities) or 3 percent taxable value (rural).

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com