In this post we are focusing on the games large corporations play on property taxes and “appraised values.” We’ve already written about Calumet’s shenanigans in receiving reductions in property taxes with the help and support of local Republican legislator Steve Fitzpatrick and Attorney Kim Beatty, wife of the Director of the Department of Revenue. https://wtf406.com/2025/04/calumets-got-lawyers-and-politicians/
The Goal of All Property Appraisal is to Establish the Market Value Of The Property
The first step in determining how much you will owe in property taxes is determined by the appraised value of your home, land, business, or rental. That value is determined by the Montana Department of Revenue’s appraisal process. The most common way the Department of Revenue determines the value of your home is to identify comparable property in your area that has sold. It is determining the “market value” by looking at sales of similar property.
Three Methods of Appraisal to Determine How Much a Property Is Worth
It is harder to find “comparable sales” for large industrial facilities like Calumet, because they do not sell as often and there are far fewer of them to use as comparisons. There are other ways to establish the market value. In addition to the comparable sales method, there is also the “cost approach” which adds the cost of land, buildings and other improvements and adjusts for condition of facilities to determine the total value. The third method is the “income approach.” In this system the appraiser looks at the income and expenses generated by the property. Calumet and other refineries are generally appraised using the “cost approach.”
Here’s The Game They Play. . .
If a property owner does not agree with the Department of Revenue’s appraisal, there is an appeal process through the Montana Tax Appeals Board. That process allows the Department of Revenue and the appellant (say, Calumet) to negotiate a voluntary settlement. Calumet and other refineries in Montana routinely appeal their valuations and routinely enter settlements with the Department of Revenue which result in lowering their taxes. None of the negotiation meetings are public. And when their taxes are lowered, your taxes go up. For a complete explanation of how this works, follow the link below. https://dailymontanan.com/2023/07/26/big-corporations-get-tax-benefits-while-montana-resident-get-higher-property-taxes/
2012 Showdown In A Legislative Committee
Dan Bucks, the Department of Revenue Director under former Governor Brian Schweitzer, refused to play this game. Instead, he defended the appraised values by the Department of Revenue rather than entering settlements. Not surprisingly, big corporate taxpayers, like refineries, didn’t like Buck’s approach. In September 2012, three refineries attempted to set him up in front of the legislative interim committee on Revenue and Transportation in a failed attempt to apply political pressure.
At the same time, Connacher Oil and Gas Limited, the previous owners of the Great Falls refinery, reached a deal with Calumet to sell the refinery for $120 million. That purchase established the actual market value of the refinery. The Department of Revenue had appraised the value of the refinery at $70 million, and Connacher Oil had appealed that appraisal, arguing it was too high even though it was $50 million below the actual purchase price paid by Calumet. Below is an audio clip of Bucks explaining the issue to the legislative committee.
Our Local Elected Officials Need to Represent Us, not Big Corporations
Too often local elected officials pander to these big corporations. Beware of politicians who talk about the economic benefits of “industrial development.” Too often we get taxes shifting more and more to residential and small business and underfunded public services. We need more people in government like Dan Bucks. We won’t get them if we (the public) don’t demand that the tax system is equitable and transparent and companies like Calumet pay their fair share.