Galloways Lose Property Tax Appeal

by Ken Toole | Jul 9, 2024 | Taxes

In November of 2023, the Department of Revenue issued a paper warning legislators and others that Montana was facing dramatic increases in property taxes because of the increase in property values across the state. This was not the first time Montana had seen dramatic increases in property values.  In the past, the legislature had avoided people’s bills going up by adjusting the state property tax rate multiplier in the residential property tax formula. It has been a simple fix.  For more details follow this link https://dailymontanan.com/2023/07/26/big-corporations-get-tax-benefits-while-montana-resident-get-higher-property-taxes/

 As legislators, both Lola Sheldon-Galloway and Steven Galloway were perfectly happy to let property taxes in Montana increase dramatically.  But now it seems they were none too happy with the tax they were paying on their own property. Maybe it’s just that all of the public outcry following the last legislature got them thinking they might be able to play the same game large corporations, like Calumet, play in filing appeals then negotiating a “settlement” with the Department of Revenue behind closed doors.  (See this editorial about property tax appeals:

https://dailymontanan.com/2024/06/26/there-is-a-way-for-montana-residential-property-taxes-to-go-down/ )

In case you didn’t know it, Galloway Investments owns the Dairy Queen located at 1651 Fox Farm Road. In late November of last year, the Galloways appealed their property taxes. Specifically, they challenged the Montana Department of Revenue’s appraisal of the value of the land the building sits on.  After reviewing the appraised value at the request of the Galloways, the Department of Revenue stood by its valuation of the land value of $245,187, rejecting the Galloways’  estimate of the land being valued at $70,882. The Galloways then appealed the Department of Revenue’s valuation to the County Tax Appeals Board. The hearing on the Galloways’ appeal was held in early April. The County Tax Appeals Board denied the Galloways’ ’ appeal and left the valuation of the land at $245,187.  On April 13th, WTF406 filed a public information request with the county requesting information on the Galloways’ appeal.  The County Attorney’s office provided the information on June 13th. 

Despite the fact that the Galloways have owned the property for at least 15 years and the property taxes have slowly increased overtime like many of the rest of us, suddenly they decided they just weren’t going to take it anymore and filed an appeal.  And they proposed a dramatic reduction in the estimated value of the land, from $245,189 to $70,882, amounting to a reduction of more than 70 percent ($174,305). Wow!

Their justification in the appeal was that the land valuation is “Ridiculous.”  They also argue that the Fox Farm Road Dairy Queen should be similar in value to the Dairy Queen on 9th Avenue, which they also own.  According to their appeal, the value per square foot of the Fox Farm property is $17.87, while the 9th Avenue store  is taxed at $5.16 per square foot.  

The problem for the Galloways is that the Dairy Queen on 9th is not comparable. The Department of Revenue appraises land value of the 9th Street property at $116,250. The locations of the two properties are very different. Specifically, The Fox Farm location is just off 10th Avenue South and faces Fox Farm Rd, one of the busiest intersections in Great Falls. It is across the street from The Heritage Inn. The 9th Street Dairy Queen is tucked away in a mixed use neighborhood with far less traffic than the Fox  Farm Road property. Many commercial properties have value based largely on the amount of traffic that can easily access the business.  

After hearing the Galloways’ appeal, the local tax appeals board agreed with the Department of Revenue and denied their request for a tax break.  They had thirty days from receipt of the local Tax Appeals Board decision to file an appeal with the State Tax Appeals Board.  They apparently decided not to appeal.  

It is ironic that both Galloways sat in legislative seats while the property tax crisis was tumbling through the 2024 legislature and did nothing.  Lola Sheldon-Galloway sat on the House Taxation Committee for two sessions of the legislature, and Steven Galloway sat on the House Business and Labor Committee.  They both had an opportunity to address Montana’s increase in property taxes.  They chose to ignore it.