Lawsuit claims illegal property assessments in Montana

A recent class-action lawsuit in Montana has alleged that the Montana Department of Revenue has engaged in illegal property assessment practices that have led to the artificial inflation of property valuations across the state. The lawsuit, filed by two Montana property owners, Lance and Lorissa Coyle and Homestead YC, LLC, on Feb. 2, claims that the DOR’s appraisal methods have resulted in many residents paying more in taxes than necessary.

According to Montana law, the Department of Revenue is required to appraise properties every two years using comparable sales data from the six months before or after a designated assessment date. For the 2025-2026 appraisal cycle, the assessment date was set as Jan. 1, 2024. However, the lawsuit alleges that the department violated this requirement by using sales data from outside the 12-month window and applying the rule inconsistently, at times using data spanning up to five years.

In the case of the Coyles’ property in Belgrade and Homestead YC, LLC’s property in Big Sky, the DOR relied on sales data from 2019 to 2023. An independent appraiser licensed by the Montana Board of Real Estate Appraisers determined that the Belgrade property should have been assessed at $2,296,000, but the DOR valued it at $3,833,800, resulting in an estimated tax overpayment of $12,285. Similarly, the Big Sky property was assessed by an independent appraiser at $17,509,024, but the DOR assigned a value of $33,578,400, leading to an estimated tax overpayment of $55,804.

While Montana law allows property owners to provide independent appraisals as evidence during an appeal of the state’s valuations, these appraisals are not considered unless they adhere to the same 12-month valuation window that the department failed to follow. This discrepancy limits the ability of taxpayers to challenge inaccurate property valuations effectively.

Joel Silverman, one of the attorneys representing the plaintiffs, stated that the Department of Revenue’s actions are outside their legal authority and hinder taxpayers’ ability to contest erroneous property valuations. The lawsuit seeks to compel the DOR to reassess properties statewide using accurate data, refund any overpaid taxes to affected taxpayers, provide an opportunity for taxpayers to appeal corrected reappraisals, and cease the use of unlawful appraisal practices. The proposed class-action lawsuit would encompass all impacted Montana property owners unless they choose to opt out.

Property owners seeking more information can contact [email protected] or visit the website https://mttaxlaw.com/ for further details.