The Gallatin County Tax Appeal Board on an undated hearing upheld the Montana Department of Revenue's valuation of a residential property at 738 Cougar Drive, denying an appeal by homeowner Justin Miller.

The decision, announced by Jeff Green with the Gallatin County Tax Appeal Board, leaves the combined land and improvement valuation at $1,277,400, the figure the Department presented after an internal AB-26 review reduced an earlier appraisal. Miller asked the board to lower the valuation to $850,000.

The appeal centered on whether the Department used appropriate comparables and whether a new house rebuilt after a 2023 fire should be valued on the Jan. 1, 2022 lien date and adjusted from the applicant's reported construction costs. Justin Miller, the appellant and property owner, told the board he rebuilt after a fire and supplied contractor invoices and an insurance payout, saying, “they gave me $475,720,” as evidence of his replacement costs. He also provided a base builder price of about $594,600 and said his total out-of-pocket cost was about $656,069.

Mandy McClurg, lead appraiser for the Montana Department of Revenue, and Colton Pike, area manager, explained the department's mass-appraisal process and reliance on closed sales with the lien date of Jan. 1, 2022. McClurg cited a recent Montana Tax Appeal Board decision (Ziegler v. State of Montana Department of Revenue) to justify applying an economic condition factor — an adjustment that converts construction cost figures to an estimated market value as of the lien date. McClurg told the board the department "must value the property as of the lien date, Jan. 1, 2022," and that using nationally recognized cost manuals and an economic condition factor is standard practice in mass appraisal.

Department staff also described an AB-26 review they conducted after the appellant's submission. That review remeasured the house, corrected square footage errors, adjusted bathroom counts and added site improvements such as asphalt, producing the $1,277,400 total (land $401,008; building/improvements $876,392) reflected in the department's current records. The Department noted that some comparables cited by Miller were not sales (or were qualified agricultural parcels) and therefore not usable under the department's market-sales approach.

Board members questioned both sides about comparables, the lien date, insurance proceeds and how the department applies the economic condition factor. Colton Pike explained the department does not perform a dollar-for-dollar “cost in, cost out” adjustment for every upgrade; rather, appraisers seek comparable properties with similar features and then apply standardized adjustments. The department further said applying the ECF to Miller's submitted costs would produce a market value at or above the department's revised appraisal, so the board relied on the department's sales-comparable results after the AB-26 adjustments.

After deliberation, Jeff Green announced the board's determination: "our determination at this time is to uphold the department's valuation and not to reduce the value of the land or the improvements." The board said a written decision will follow and reminded the parties that either may appeal to the Montana Tax Appeal Board within 30 days of receiving the county board's decision.

The hearing record reflects that the valuation dispute involved (1) whether replacement construction costs incurred in 2023–2024 can be used without an ECF adjustment for the Jan. 1, 2022 lien date; (2) whether the department's chosen comparables met statutory market-sales criteria; and (3) results of the AB-26 field review that changed the property's measured characteristics.

The board's action ends the county-level appeal. The transcript indicates Miller may pursue the statutory appeal process to the Montana Tax Appeal Board if he wishes to continue the challenge.