Lawsuit Accuses Department of Revenue of Conducting Unlawful Property Assessments
The lawsuit highlights two cases in which the DOR used comparable sales data from outside a designated 12-month valuation period for 2025 to determine property assessments, which resulted in heightened valuations and tax bills
By Mariah Thomas
The Montana Department of Revenue (DOR) is contending with the second lawsuit filed against it in as many weeks — this time, a potential class action alleging the department conducted unlawful property assessments statewide for 2025-2026.
The Feb. 2 filing in Madison County District Court claims that “residential property owners are overtaxed and will continue to be overtaxed unless this Court grants relief.”
Property taxes have been a point of concern for Montanans for years, as homeowners have seen rising valuations — and tax bills — during and after the COVID pandemic. The state legislature took a whack at a tax code rewrite last spring, aiming to bring down tax bills. But two weeks ago, a trio of lawmakers filed a lawsuit aiming to declare one of the bills the legislature passed unconstitutional.
The potential class action follows on its heels. But, it focuses on a separate issue: comparable sales data, which the DOR uses to determine property assessments.
The DOR uses a 12-month valuation period to determine property assessments. The comparable sales data they use to determine appraisals is supposed to fall within that time frame. For the 2025-2026 appraisal cycle, the DOR was supposed to use comparable sales data from July 1, 2023, to July 1, 2024.
But the lawsuit highlights two cases in which the DOR used comparable sales data from outside that period to determine properties’ valuations. It claims using the additional data resulted in higher assessed and taxable value on the properties, incorrectly raising property tax bills for those residences. It accuses the DOR of violating constitutional requirements that it must equalize property valuations by using the same time frame for all of them.
The lawsuit also aims to represent any other property owners who might be in a similar situation. But that information is difficult for taxpayers to know, due to state law requiring individual homes’ sale prices be kept confidential. Per Montana Code Annotated, the reason is because “the demands of individual privacy outweigh the merits of public disclosure.” The suit also alleges that the system violates taxpayers’ due process and equal protection rights.
“The only way Plaintiffs discovered DOR’s illegal and improper conduct in this case was by challenging the valuation and eventually receive the comparable sales from DOR in a document titled ‘Comparable Sales Information Packet,’” the suit states. “Because taxpayers have no way of knowing whether DOR has been utilizing illegal sales data in their valuations, taxpayers have had no reason to pay their taxes under protest as required by statute.”
If taxpayers pay taxes under protest, it means that, should they win their appeal, they receive a refund, plus interest. Joel Silverman, a Helena-based attorney representing the plaintiffs, said if the lawsuit is successful, the court would require the DOR to reassess properties statewide, and to issue refunds to anyone who overpaid on their taxes thanks to the issue.
“From the 183 appeals we filed during the 2025 appeal cycle, we know that many other property owners are also affected by this issue,” Silverman said. “Property owners who did not file appeals may never know whether they were impacted, because the DOR does not release its assessment data unless an appeal is filed.”
The Beacon reached out to the Department of Revenue for comment on the filing. Spokesperson Jason Slead said DOR doesn’t comment on pending litigation.
In order to move forward as a class action, the court must first certify the class. Class action status requires that a common policy or practice harmed a large number of people.
While individual home sales remain confidential, DOR data indicates Montana’s typical home values have skyrocketed by two-thirds since the COVID pandemic.
Flathead County has some of the state’s most-expensive home prices, with median home values sitting at $578,000, an increase of 95% from 2020 to 2024. Some Flathead homeowners have raised concerns about the way their valuations, combined with the legislature’s tax code rewrite that took partial effect this tax year, have impacted their property tax bills.