Signed by Governor Greg Gianforte

Vote Smart's Synopsis:

Vote to concur with House amendments and pass a bill that exempts certain fiber optic and coaxial cables from property taxation.

Highlights:

• Defines "fiber optic or coaxial cable" as any fiber optic or coaxial cable, including all capitalized costs associated with installing and placing in service the fiber optic or coaxial cable, and other property that is normally operated when installing and placing in service fiber optic or coaxial cable to deliver digital communication and access to the internet (Sec. 2-3.b.i).

• Authorizes the recapture of abated taxes to be canceled, in whole or in part, if the local governing body determines that the taxpayer's failure to meet the requirements is a result of circumstances beyond the control of the taxpayer (Sec. 1-6.c).

• Specifies the term “fiber optic or coaxial cable” does not include routers, head-end equipment, central office equipment and other electronics, or hardware or software not directly associated with installing and placing in service fiber optic or coaxial cable or the buildings used to house equipment (Sec. 2-3.b.ii).

• Exempts fiber optic and coaxial cable from taxation for a period of 5 years starting from the date the fiber optic or coaxial cable was placed in service, after which the property exemption is phased out at a rate of 2 percent a year, with the property being assessed at 100 percent of its taxable value after a 10-year period. To maintain the exemption, the owner of fiber optic or coaxial cable must reinvest the tax savings from the exemption by installing and placing in service new fiber optic or coaxial cable in Montana within 2 years from the date the owner first claimed the exemption charging those costs to the consumer (Sec. 1-5.ii.a).

• Specifies fiber optic or coaxial cable installed using federal funds received resulting from the American Rescue Plan Act is not eligible for exemption from taxation under this law (Sec. 2-4.b.ii).

• Requires the fiber optic and coaxial cable owner to maintain adequate books and records demonstrating the investment the owner made when installing and placing in service fiber optic or coaxial cable in Montana. The property owners must make those records available to the department of revenue for inspection upon request (Sec. 3.j).

• Authorizes any local governing body to recapture taxes previously exempted in that jurisdiction, plus interest and penalties for nonpayment of property taxes during any tax year in which an exemption under the provisions of this law was improper upon notice from the department that the owner’s exemption has terminated (Sec. 3-2.b).

• Requires the department to create a page on its website to enable (Sec. 4):

• Owners of fiber optic or coaxial cable intending to take advantage of the tax abatement provisions to notify local governing bodies of the location or locations in which they intend to place in service fiber optic or coaxial cable; and

• Local governing bodies to post comments on such projects identified by owners of fiber optic or coaxial cable.

Full Bill Text

Vote Smart's Synopsis:

Vote to amend and pass a bill that exempts certain fiber optic and coaxial cables from property taxation.

Highlights:

• Defines "fiber optic or coaxial cable" as any fiber optic or coaxial cable, including all capitalized costs associated with installing and placing in service the fiber optic or coaxial cable, and other property that is normally operated when installing and placing in service fiber optic or coaxial cable to deliver digital communication and access to the internet (Sec. 2-3.b.i).

• Authorizes the recapture of abated taxes to be canceled, in whole or in part, if the local governing body determines that the taxpayer's failure to meet the requirements is a result of circumstances beyond the control of the taxpayer (Sec. 1-6.c).

• Specifies the term “fiber optic or coaxial cable” does not include routers, head-end equipment, central office equipment and other electronics, or hardware or software not directly associated with installing and placing in service fiber optic or coaxial cable or the buildings used to house equipment (Sec. 2-3.b.ii).

• Exempts fiber optic and coaxial cable from taxation for a period of 5 years starting from the date the fiber optic or coaxial cable was placed in service, after which the property exemption is phased out at a rate of 2 percent a year, with the property being assessed at 100 percent of its taxable value after a 10-year period. To maintain the exemption, the owner of fiber optic or coaxial cable must reinvest the tax savings from the exemption by installing and placing in service new fiber optic or coaxial cable in Montana within 2 years from the date the owner first claimed the exemption charging those costs to the consumer (Sec. 1-5.ii.a).

• Specifies fiber optic or coaxial cable installed using federal funds received resulting from the American Rescue Plan Act is not eligible for exemption from taxation under this law (Sec. 2-4.b.ii).

• Requires the fiber optic and coaxial cable owner to maintain adequate books and records demonstrating the investment the owner made when installing and placing in service fiber optic or coaxial cable in Montana. The property owners must make those records available to the department of revenue for inspection upon request (Sec. 3.j).

• Authorizes any local governing body to recapture taxes previously exempted in that jurisdiction, plus interest and penalties for nonpayment of property taxes during any tax year in which an exemption under the provisions of this law was improper upon notice from the department that the owner’s exemption has terminated (Sec. 3-2.b).

• Requires the department to create a page on its website to enable (Sec. 4):

• Owners of fiber optic or coaxial cable intending to take advantage of the tax abatement provisions to notify local governing bodies of the location or locations in which they intend to place in service fiber optic or coaxial cable; and

• Local governing bodies to post comments on such projects identified by owners of fiber optic or coaxial cable.

Full Bill Text