A new audit reports that an estimated $1.2 billion in market value from new construction in Montana went unaccounted for over the last six years.
The Legislative Audit Division found that the state Department of Revenue annually fails to identify around 14% of market value in new construction. That equates to more than $8 million a year in tax revenue.
The report says the inaccurate data leads to lower tax bills for new construction property owners, and a higher burden shifted onto residential and commercial property tax payers. Local governments are also impacted when they build their budgets using inaccurate data.
Auditors offered several recommendations to ensure the department identifies all new construction.
One suggestion is for state lawmakers to require local governments to send copies of all construction permits to the state revenue department. Other proposals would have the state formalize a collaboration on statewide permitting, appraise properties that haven’t been inspected in six or more years and boost staff retention.
The Department of Revenue concurred with the recommendations, but said not all may be logistically possible.
