Administrative Rules of the State of Montana

(1) Oil and gas field machinery and equipment shall be valued using the cost approach to market value. The taxpayer must provide to the department the acquired cost, the year acquired, and an itemized description of each piece of machinery and equipment. The acquired cost will be trended to current replacement cost and then depreciated according to the schedule mentioned in (2).

(2) The department shall prepare a 15-year trended depreciation schedule for oil and gas field machinery and equipment. Trend factors and depreciation factors published in the Marshall & Swift Valuation Service Guide will be used to develop the trended depreciation schedules. The trend factors shall be the most recent available.

(3) The trended depreciation schedule referred to in (1) and (2) is listed below and shall be used for tax year 2018.

YEAR NEW/ ACQUIRED	% GOOD	TREND FACTOR	TRENDED % GOOD
2018	100%	1.000	100%
2017	95%	1.000	95%
2016	90%	1.011	91%
2015	85%	1.001	85%
2014	79%	1.009	80%
2013	73%	1.021	75%
2012	68%	1.023	70%
2011	62%	1.050	65%
2010	55%	1.079	59%
2009	49%	1.064	52%
2008	43%	1.101	47%
2007	37%	1.151	43%
2006	31%	1.219	38%
2005	26%	1.280	33%
2004	23%	1.389	32%
2003 and older	21%	1.438	30%

(4) All downhole equipment in oil and gas wells is exempt from taxation. Downhole equipment includes:

(a) sucker rods;

(b) tubing;

(d) submersible pumps.

(5) Downhole equipment which is not in an oil or gas well as of the assessment date, January 1, each year shall be taxed as class eight property.

(6) This rule is effective for tax years beginning after December 31, 2017.

History: 15-1-201, MCA; IMP, 15-6-135, 15-6-138, 15-6-213, 15-6-219, MCA; NEW, 1984 MAR p. 2036, Eff. 12/28/84; AMD, 1985 MAR p. 2032, Eff. 12/27/85; AMD, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1988 MAR p. 747, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1991 MAR p. 2043, Eff. 11/1/91; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1993 MAR p. 2972, Eff. 12/10/93; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3316, Eff. 12/18/98; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 2340, Eff. 1/1/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18.