Montana
Questions and answers about Montana’s new second-home tax

In an effort to lower property tax bills for homeowners and landlords who provide long-term rental housing, the state Legislature and Gov. Gianforte passed major tax relief legislation this year. As it’s implemented this year and next, the package will scale back taxes on most houses being used as primary residences while offsetting those cuts with higher taxes on most other residential properties starting in 2026.
As we cover the new tax policy, which the Montana Department of Revenue expects to boost second-home taxes by 68% on average, the MTFP newsroom is fielding many, many questions from readers. We’re compiling the most frequent ones — and the best answers we currently have — below.
We’ll update this story periodically as other questions roll into our inboxes and as officials release additional information on how the specifics of the new tax policy will work. As always, we’d love to hear comments and questions at news@montanafreepress.org.
Q: When will the second-home tax take effect?
Interim rates will lower taxes for many residential properties on the tax bills sent by county treasurers this fall. However, the second-home tax won’t be implemented until 2026 tax bills, when it will raise taxes on most residential properties that don’t qualify for a “homestead” exemption.
Proponents had initially wanted to make the second-home tax effective this year, but added provisions for an interim year after negotiations on it dragged into the final days of the legislative session, missing the February deadline Gianforte had initially said would be necessary for the revenue department to implement the full policy this year.
Q: Who is eligible for the lower residential homestead rates?
A: Two types of residential property owners: Homeowners who live in their homes at least seven months a year and landlords who rent homes out on long-term leases for at least seven months a year. Long-term means leases that last at least a month, like the leases used for resident rental housing but unlike the terms for Airbnb-style short-term rentals.
Q: Will there be more property tax rebates?
Yes. The Legislature also authorized a round of $400 rebates for homeowners, which will be available this year and apply against last year’s tax bill. Those follow the $675 rebates the Legislature authorized for homeowners in each of 2024 and 2023.
The new tax law requires the revenue department to mail a notice about the rebates to potentially eligible property owners by June 30. Eligible homeowners who meet the same seven-month occupancy standard that will be used for the eventual homestead exemption will be able to claim the rebate by applying between Aug. 15 and Oct. 1 this year.
Q: Do I need to apply to avoid paying the second-home tax?
Yes. When it takes full effect in 2026, the new law will assess higher taxes on any residential property that doesn’t qualify for the homestead exemption. Homeowners and landlords will need to apply to the revenue department for the exemption that will qualify them for lower rates.
Once homeowners are qualified for the homestead exemption, they will remain qualified until they sell the property, move elsewhere or apply for a homestead on a different residence. Landlords will need to periodically reapply to certify properties are still being used as long-term rentals.
Additionally, homeowners who qualify for a property tax rebate this year will be automatically qualified for the homestead exemption going forward.
Q: How do I apply?
As of May 2025, the revenue department hasn’t yet published the necessary forms, but homeowners and landlords will be able to apply either by mail or online. The new law specifies that the application deadline for 2026 tax bills will be March 1, 2026.
The applications will ask property owners to formally declare that they’re using a property as either a principal residence or long-term rental. If the department discovers a taxpayer has fraudulently claimed the benefit, the law specifies that they will have to pay a penalty of three times the amount saved and be subject to potential criminal prosecution under a state law that can n result in a $500 fine and a jail term of up to six months.
Eligible homeowners and landlords who fail to apply for the homestead rates initially may be able to receive refunds if they appeal successfully after receiving higher tax bills.
Q: I’ve heard there’s an exception for homes on agricultural land?
Yes. The tax package’s long-term rates place residential structures on agricultural land at their current levels regardless of whether they qualify as principal residences, an exemption intended to shield worker bunkhouses and other secondary residences in farm complexes from the second-home tax. That provision also means that second homes — including many high-value ones — located on qualified agricultural properties will be largely shielded from the second-home tax.
Separately from the second-home tax debate, revenue department officials and some lawmakers have expressed concern that it may be too easy to qualify undeserving properties for an agricultural status under current law, a process that currently requires reporting only $1,500 a year in agricultural income. A bill that would have tightened the qualification requirements for the agricultural designation, introduced separately from the property tax relief package, failed to pass the Legislature this year.
Q: What if I run an Airbnb out of part of my home? Will that keep me from qualifying for the homestead exemption?
You’ll probably be fine. The bill doesn’t explicitly address this situation, but the definition of “principal residence” included in the law focuses on whether a taxpayer owned and occupied a given residential property for at least seven months of the year. It also says you can’t claim more than one property as a principal residence, but doesn’t say anything about what you’re doing with a property other than living on it.
Q: Will family cabins pay the second-home tax?
A: Unless they qualify for the homestead reduction, yes. The new law doesn’t distinguish between family cabins owned by Montana residents and luxury real estate owned by out-of-state residents.
Q: Why doesn’t the second-home tax apply only to out-of-state residents?
Because that would likely be struck down by the courts as unconstitutional discrimination. As legislative attorneys studying tax issues for lawmakers have noted in the past, the U.S. Constitution includes several provisions that have been interpreted as limiting how much power states have to discriminate against nonresidents, particularly with regards to freedom of movement and economic activity. For example, a 1975 ruling by the U.S. Supreme Court barred New Hampshire from imposing higher income taxes on nonresident commuters.
There is some legal nuance involved — the Supreme Court, for instance, ruled in 1978 that Montana could charge nonresidents higher hunting license fees because hunting is a recreational activity involving a state-owned resource. Even so, most legal analysts seem to think lawmakers are on much firmer ground by pegging their definitions to how much time a property owner spends living on or renting a given property, rather than their state of residence.
Q: Will the tax relief force local government budget cuts?
No — at least in theory. The way the state’s property tax system works means that most local taxes “float” to collect a given budget amount. As such, tax bills will generally shift around so lower homeowner taxes are offset by higher taxes on other types of property, primarily businesses under the interim rates for this year, then a combination of businesses and second homes in future years.
The legislation also includes a provision intended to avoid short-term revenue reductions for taxes defined in terms of non-floating mills, a category that encompasses voter-authorized local taxes in some parts of the state.
The other wrinkle is that two of Montana’s municipalities, population-121,000 Billings and population-350 Sunburst, have provisions in their charters that could keep taxes from floating to accommodate the downward valuation shifts produced by the relief legislation. That’s caused particular angst in Billings, the state’s largest city, and spurred lawmakers to include a provision in the tax legislation that purportedly overrides those charters to keep revenues constant. It’s unclear, however, whether that override attempt would survive a court challenge, so the bill includes another provision specifying the state will backfill municipal revenues to 2025 levels if the override clause is struck down.
Q: Where can I read the full second-home tax legislation?
This is actually quite tricky. The new tax policy was passed as two conjoined bills with some redundant language and convoluted coordinating clauses for reasons that have to do with arcane legislative politicking.
If that doesn’t scare you off, start with Senate Bill 542 (text here). However, disregard SB 542’s sections 4 and 14, which were adjusted by provisions in House Bill 231 (its sections 29 and 27, respectively). Note that other coordinating language in HB 231 (its section 31) nullifies most of HB 231’s other contents to avoid redundancy with SB 542.
Q: I tried reading the bills and … how exactly do they provide me with tax relief?
We feel your pain.
Here’s a short answer: Lawmakers are adjusting statewide property tax rates to dial back the tax values for homestead-eligible residential properties. Montana’s property tax math translates your taxable value to your share of the collective bills for schools, roads, law enforcement and other local government services. So scaling down tax values for primary residences while boosting them second homes will shift taxes away from homeowners without defunding services.
The shift will also raise taxes for some business properties — particularly this year, as the interim rates reduce taxes for primary residence before the second-home tax revenue is available next year. The measure does include a provision intended to limit the impact on smaller business properties.
As for a longer answer? Stay tuned — we’re working on something.
Q: How much will my taxes change?
By the time the second-home tax is fully implemented in 2026, projections from the revenue department estimate the average owner-occupied home will see taxes decrease by 18% and the average long-term rental property will see a 22% decrease.
However, actual changes will vary place to place depending on factors including the composition of the local tax base and how specific counties, cities and school districts are managing their budgets. Bills for individual properties will also depend on shifts in the formal tax valuations due from the revenue department in the coming weeks.
We wrote a separate story about the department’s projections, including visual breakdowns for different property types and county-by-county figures. It’s available here: How Montana’s new second-home tax could shift your property tax bill.
Have questions about the second-home tax and homestead? We’d love to hear from you — and plan to update this piece as new questions pop up and new information becomes available. Reach out at news@montanafreepress.org.
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Questions and answers about Montana’s new second-home tax
In an effort to lower property tax bills for homeowners and landlords who provide long-term rental housing, the state Legislature and Gov. Gianforte passed major tax relief legislation that will scale back taxes on most homes being used as primary residences while offsetting those cuts with higher taxes on most other residential properties starting in 2026. The MTFP newsroom is fielding many, many questions about new tax law from readers. Here are the most common ones — and the best answers we currently have.
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Montana
Tiny extinct crocodyliform with unusual teeth discovered in Montana

About 95 million years ago, a juvenile crocodyliform nicknamed Elton lived in what is now southwest Montana at the edge of the Western Interior Seaway.
Measuring no more than 2 feet long from nose to tip of tail, young Elton was about the size of a big lizard, according to Montana State University professor of paleontology David Varricchio. Had it lived to be full grown, Elton would have measured no longer than 3 feet, far smaller than most members of the Neosuchia clade to which it and its distant relatives belong.
The clade includes modern crocodilians and their closest extinct relatives, almost all of them semiaquatic or marine carnivores with simple, conical teeth.
Elton, by contrast, lived on the land, probably feasting on both plants and insects or small animals with its assortment of differently shaped and specialized teeth. Its unique anatomy reveals that it was part of a new, previously unrecognized family of crocodyliforms endemic to the Cretaceous of North America.
If not for the sharp eye of Harrison Allen, a 2023 graduate of MSU’s Department of Earth Sciences in the College of Letters and Science, Elton’s ancient remains may never have been discovered. But during a dig in the summer of 2021 in the Blackleaf geological formation on U.S. Forest Service land near Dillon, Allen—then a student in Varricchio’s field paleontology course—noticed a fossil the size of the tip of his pinkie with a “weird texture on it.”
“I brought it to Dr. Varricchio and knew it must be something good, because he said, ‘Take me to where you found this,’” said Allen, who is now studying croc paleontology as a doctoral student at Stony Brook University in New York.
It was an exciting moment for Allen, originally from Kentucky, who chose MSU because it offers a paleontology track for undergraduates majoring in earth sciences.
Four years and hundreds of hours of study later, he is the lead author of a paper published in the Journal of Vertebrate Paleontology that describes the morphology and scientific significance of the creature whose remains he found in the Blackleaf Formation.
“After the dig, Dr. Varricchio told me why he was so excited the day I found the initial specimen. It had so much visible anatomy to explore, and he could see it was a tiny, tiny croc skull, fully articulated and preserved—it was a special thing,” Allen said.
“We have found dinosaurs (in the Blackleaf) before, but this was the second known vertebrate animal we’d ever found in this formation.”
The extinct animal, which Allen and the paper’s co-authors later named Thikarisuchus xenodentes for its strange, sheathed teeth, has provided new information about the paleoecology of the Blackleaf ecosystem and about patterns of evolution in the croc family tree.
It also provided the ultimate undergraduate research project for Allen, who delved into the painstaking process of excavating, sifting and reconstructing the Thikarisuchus remains with the help of some fellow students.
“As an undergraduate student new to research, I nervously went up to Dr. Varricchio and asked if I could study this specimen,” Allen said. “It led me down the rabbit hole into this amazing world of prehistoric, extinct crocs and their evolutionary niches.”
The day after Allen recovered the first piece of skeleton, he and his classmates scooped up several bags of sediment from the mound where it was found.
Back in Bozeman, Allen and his friend Dane Johnson, who graduated in 2022 and is now a paleontology lab and field specialist at MSU’s Museum of the Rockies, spent between 10 and 20 hours sifting out fine particulate matter and dirt, eventually recovering dozens of tiny pieces of the Thikarisuchus skeleton that collectively fit into the palm of Allen’s hand.
As they worked, they listened to music, including Elton John’s 1970s hit “Crocodile Rock.” The nickname “Elton” stuck, long before the specimen was assigned the scientific name that reflects its physical traits.
Allen and Johnson recovered bits of bone from almost all areas of the animal’s body, including its limbs, vertebrae, jaw and 50-millimeter-long skull. Because the fragments were tiny and exceptionally fragile, the students didn’t attempt to physically reassemble them.
Instead, they took them for a series of CT scans, including some at MSU’s Subzero Research Laboratory. Allen estimates that he spent well over 100 hours coloring the digital, 2D segment slices that the scans produced, a process necessary to visually distinguish the bones from the rocks they were embedded in.
“Harrison worked super hard to digitally reconstruct the animal, and it came out beautifully,” said Varricchio.
During the process, Allen discovered that the bones of Thikarisuchus were densely concentrated and organized in a manner consistent with fossils of organisms found in burrows in the Blackleaf Formation and the nearby Wayan Formation in Idaho.
He said this suggests that Thikarisuchus was likewise preserved within a burrow, further supporting the notion that fossils recovered from these formations are biased toward those that were preserved in burrows.
The specimen also presented clues about Thikarisuchus’ newly named family group Wannchampsidae and a similar group found in Eurasia known as Atopasauridae.
Both groups were tiny and terrestrially adapted, and they shared certain cranial and dental features found in another more distantly related group from the Cretaceous of Africa and South America.
“It suggests that during the same time period, we’re seeing convergent evolution between two distantly related groups due to similar environmental conditions, prey availability and who-knows-what that prompted crocs on opposite sides of the planet to develop similar features,” Allen said.
As he works toward his Ph.D. and a career as a paleontology professor, Allen said his experiences with Elton cemented his research interest, which has since broadened to include extinct crocs from all over the world.
“The majority of diversity of crocodyliforms is in the past. There were fully marine crocs, fully terrestrial crocs, herbivorous crocs, omnivores and some that cracked shells,” he said. “That amazed me and made me want to get into this more specific realm of paleontology.”
Varricchio said he feels fortunate that students like Allen choose to study at MSU.
“It was a true pleasure to have Harrison as a student here—so much positive enthusiasm, followed up with great research,” he said.
More information:
Harrison J. Allen et al, A new, diminutive, heterodont neosuchian from the Vaughn Member of the Blackleaf Formation (Cenomanian), southwest Montana, and implications for the paleoecology of heterodont neosuchians, Journal of Vertebrate Paleontology (2025). DOI: 10.1080/02724634.2025.2542185
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Montana
‘It’s what you dream about’: No. 5 Montana gelling rapidly after showcase victory

MISSOULA — The Montana Grizzlies got their revenge on the North Dakota Fighting Hawks with a thrilling 24-23 win Saturday afternoon, and as this team continues to gel, a win like this one is a big step forward.
WATCH THE VIDEO:
‘It’s what you dream about’: No. 5 Montana gelling rapidly after showcase victory
In a game where every yard had to be earned for Montana, the Griz had a hard-fought comeback after trailing by nine points in the fourth quarter.
The victory was set up by a 42-yard field goal by Ty Morrison, which put the Griz within one score of the Fighting Hawks.
Then on their next drive, quarterback Keali’i Ah Yat made the two biggest plays of the game, converting a fourth-and-12 to tight end Josh Gale and finding Brooks Davis wide open in the end zone to take the lead with less than two minutes left in the game.
“It’s what you dream about, it’s what great players are made of,” Ah Yat said. “You play in the backyard and you dream of this stuff, so like, I mean, just grateful for the opportunity. And we had a similar opportunity last year to go ahead and win the game, and I just tried to make the most out of this one.”
Photos: No. 5 Montana surges past No. 16 North Dakota in thriller
Not to be outdone, Montana’s defense also stepped up big in this one, forcing multiple stops throughout while holding North Dakota to 6 for 18 on third down and 0 for 2 on fourth, and only giving up seven points in the second half.
The Griz defense also added an interception by Peyton Wing in the third quarter, which led to a Griz touchdown, bringing a spark to the rest of the team.
It was an impressive showing from a defense that’s just two games into playing with one another.
“I love all our guys and we all spent a lot of time together getting to know each other, and I think that really is what starts to show, especially towards the end of the game,” linebacker Elijawah Tolbert said. “Just the chemistry that we are building week in and week out, I think that is what’s most important and shows.”
Grizzly Replay: No. 5 Montana vs. No. 16 North Dakota
As the team continues to build that chemistry, head coach Bobby Hauck and the Griz saw this win as a key learning experience for the new faces and up-and-coming players who are still figuring out their roles on the field and alongside each other.
“We have inexperience on our team all across the board. We probably are not ready to win a game of that magnitude, but we did,” Hauck said. “I think as we get into the latter part of this season, if we can keep finding ways to win, we’re going to have a terrific football team.”
The Grizzlies now look forward to their next game against Indiana State at Washington-Grizzly Stadium at 1 p.m on Saturday, Sept. 20.
Montana
Smoke cloud from meth seized by FBI sends Montana animal shelter workers to hospital

The future of a Montana animal shelter remains uncertain after a cloud of smoke from two pounds of methamphetamine seized by the FBI and incinerated filled up the building and sent workers to the hospital.
The smoke started to fill the building of the nonprofit Yellowstone Valley Animal Shelter in Billings on Wednesday while the FBI used an incinerator at the animal shelter to burn the drugs, city officials said.
Assistant City Administrator Kevin Iffland said Friday that the smoke was sucked in apparently because of negative pressure. A fan was supposed to be on hand in such situations to reverse the pressure so smoke would flow out of the building, but it wasn’t readily available.
The incinerator is used primarily to burn carcasses of animals euthanized or collected by the city’s animal control division. But every couple of months, local law enforcement or FBI agents use it to burn seized narcotics, Iffland said.
Fourteen animal shelter workers were evacuated and went to the hospital. The shelter’s 75 dogs and cats were relocated or put into foster homes, said Iffland and shelter director Triniti Halverson.
The shelter shares space with Billings’ animal control division. When smoke started filling parts of the building, Halverson assumed it was from burning carcasses because she said they had never known about the drug burns.
Halverson said she had a very intense headache and sore throat, and others had dizziness, sweating and coughing.
“Not a party,” she said.
The workers found out it was methamphetamine smoke through a call from a city official while they were in the hospital, Halverson said. Most of the staff spent several hours in an oxygen chamber for treatment.
Symptoms have lingered for some workers, Halverson said.
They were also closely monitoring four litters of kittens that got more heavily exposed because they were in a closed room with lots of smoke, she said.
The FBI routinely uses outside facilities to conduct controlled drug evidence burns, agency spokesperson Sandra Barker said. She referred further questions to Billings officials.
A city animal control supervisor who was present for Wednesday’s burn declined to go to the hospital, Iffland said. The FBI agents were told to go to the hospital by their supervisor.
The incinerator is meant to operate at a certain temperature, so it doesn’t emit toxins. Iffland said officials were trying to determine if it was at the appropriate temperature on Wednesday.
The shelter will remain closed until it can be tested for contamination. Shelter workers were tested for potential exposure, and Iffland said he did not know the results.
“We have no idea of how much we’ve lost,” shelter board member and attorney Frans Andersson told CBS affiliate KTVQ. “We don’t have inventory at the moment of what was in there.”
The company hired to assess and clean up the building told the station that they are doing air quality tests before any remediation can happen.
“This is a unique situation and project,” said Andrew Newman, owner and CEO of Newman Restoration. “Typically, what we’ll see is more on the residential side with, you know, kind of a meth lab that either caused a fire or triggered some type of needing remediation. With this being a larger commercial facility and what the intentions were, it makes it a unique situation and cleanup.”
Newman expects the lab results to come back by next week.
Billings resident Jay Ettlemen went to the shelter on Friday to donate dog food and said he was angry when he found out about the drug burns.
“Why the hell are they destroying drugs inside the city limits?” Ettlemen asked. “There’s so many other places in the middle of nowhere.”
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