Montana House Bill HB25

Montana 2025 Regular Session

• Introduced: 12/6/24
• Refer: 12/20/24
• Failed: 5/20/25

Caption

Require exempt entities to report beneficial use of property

Summary

HB 25 would require certain tax-exempt entities that lease property for the benefit of a nonexempt person or organization to file an annual report with the Department of Revenue. The report would have to describe the leased property and include a copy of the lease agreement. The bill also states that property owned by an exempt entity and leased for the beneficial use of a nonexempt entity remains subject to property taxation, except where another statute already provides otherwise. The bill amends Montana’s property tax exemption statute, 15-6-201, to add this reporting requirement and to clarify that failure to properly report beneficial use triggers the revised assessment procedures in 15-8-601. In practical terms, it would tighten oversight of exempt property by making sure property used by taxable parties does not remain untaxed simply because title is held by an exempt owner. It also reinforces existing limits on exemptions for churches, charities, tribal property, health care facilities, cemeteries, museums, water associations, and other listed exempt categories. The overall sentiment appears neutral to mildly supportive in committee, with no recorded opposition in the available discussion. The only recorded vote was a 21-0 motion in the House Taxation Committee to table the bill, which indicates unanimous agreement at that stage, though not necessarily support for enactment. The bill ultimately died in process. There is little direct evidence of controversy in the available record, but the bill’s core policy issue is whether exempt entities should have to disclose and potentially lose exemption treatment when property is leased to nonexempt users. That could affect churches, charities, tribal entities, nonprofit health care providers, and other exempt owners that lease land or buildings to private tenants. The reporting burden and the possibility of revised assessment for nonreporting are the main likely points of concern, while supporters would likely view the measure as a tax compliance and transparency tool.

Impact

HB 25 would amend Montana property tax law by adding a new reporting obligation for exempt entities that lease property for nonexempt use and by clarifying that such property is taxable unless another exemption applies. It would also tie noncompliance to the state’s revised assessment process, giving the Department of Revenue a clearer enforcement mechanism. The bill would not eliminate existing exemptions, but it would narrow how they operate when exempt property is put to taxable use by others.

Sentiment

The available record suggests a largely procedural and noncontroversial reception, with no committee transcript debate and a unanimous 21-0 vote to table in House Taxation. Because the bill died in process, it did not advance, but the recorded vote does not show active opposition in the committee materials provided. Overall, the sentiment appears neutral, with the bill treated as a technical tax administration measure rather than a high-profile policy fight.

Contention

The main policy tension is between preserving tax exemptions for qualifying entities and preventing those exemptions from shielding property that is effectively used by taxable private parties. Exempt owners such as nonprofits, churches, tribal entities, and charitable organizations could view the annual reporting requirement as an administrative burden and worry about broader tax exposure if leases are scrutinized. Supporters would likely argue that the bill improves fairness and transparency by ensuring beneficial use is reported and taxed appropriately when exemption status is being used to cover nonexempt activity.