Fiber Optic or Coaxial Cable Exemption

First, thank you for participating in Montana’s commitment to prosperity and growth, one aspect of which is providing accessible and affordable broadband to our citizens. 

Some things to know as you begin this process:

Requirements to obtain and keep the Fiber Optic or Coaxial Cable Exemption:

• With some exceptions, fiber optic or coaxial cable that is installed and placed in service on or after July 1, 2021 is exempt from taxation for a period of 5 years.
• After the initial five-year period, the property exemption is phased out at a rate of 20% a year. The property will be assessed at 100% of its taxable value in the 10th year after placing the cable in service. 
• To keep the exemption, the owner of fiber optic or coaxial cable must reinvest the tax savings from the exemption by installing and placing in service new fiber optic or coaxial cable in Montana within 2 years from the date the owner first claimed the exemption, but without charging those costs to the consumer. 
• The cost of installing or placing into service fiber optic or coaxial cable with the reinvested tax savings (without charging those costs to the consumer) must be equal to or greater than the value of the tax savings received from the tax incentive. 
• Fiber optic or coaxial cable installed using federal funds from the American Rescue Plan Act is not eligible for exemption from taxation under this section. 

Accounting details for the exemption:

• An entity that claims this tax exemption shall maintain adequate books and records proving the investment made by the owner during installation and placement into service of the fiber optic or coaxial cable in Montana. These records must be available to the department for inspection upon request. 
• The property taxes exempted from taxation are subject to termination or recapture if the department determines that the owner failed to install and place in service new coaxial or fiber cable in Montana as described the provisions of Senate Bill (SB) 51.
• If the department notifies the owner that their exemption has terminated, any local governing body may recapture taxes previously exempted in that jurisdiction, plus interest and penalties for nonpayment of property taxes. Tax recapture must occur within 10 years after the end of the calendar year in which the exemption was first claimed. 
• The recapture of abated taxes may be canceled, in whole or in part, if the local governing body determines that the taxpayer’s failure to meet the requirements is a result of circumstances beyond the control of the taxpayer. 

For the precise details and citations of SB 51, we invite you to read the full bill.

Please complete the form below to begin the process to obtain your fiber optic or coaxial cable exemption. 

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