Chevron tax appeal could cost Davis County millions in refunds

May 12 2013 - 11:09pm

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FARMINGTON -- Chevron says it was overassessed personal property taxes for two years and has filed an appeal that, if successful, could cost Davis County millions of dollars in refunds.

Chevron U.S.A. Inc. claims it was overassessed when it came to its 2009 and 2010 personal property taxes on its Davis County refinery.

To defend its position in the property tax appeal, the Davis County Commission has hired an independent expert appraiser at $175 per hour to work for its side.

The commission has approved a contract with Brent Eyre, with ASA - Expert Appraisal Services. Eyre will help represent the county in evaluating the appraisals to be submitted on behalf of Chevron.

The case is to be heard in November by the Utah State Tax Commission.

"My services would primarily include assisting the (Davis) County Attorney's Office in property tax appeal proceedings filed by the Chevron Refinery located in Davis County," Eyre said in a letter to the commission.

The appeals stem from the refinery's payment of personal property taxes on audited total value assessments of $271.2 million in 2009 and $340.1 million in 2010, said Paul Wood, Davis County deputy assessor.

Wood said the personal property tax evaluation assessed the company in 2011 remains under review.

Based on the evaluations, Wood said, the personal property taxes the refinery is contesting are in the millions of dollars.

"It will impact our budget" if the refund is granted, said Davis County Commissioner Louenda Downs.

But like any other appeal, regardless of the refund amount, county leaders want to get it right, Downs said.

However, in this particular case, she said, "we feel like we have done it right."

"We don't frequently have (appeals) of this magnitude," she said.

Chevron U.S.A. can confirm it has appealed its property tax evaluations to the county for those two years and that it has been discussing the evaluation issue with county and state officials since 2008, said Greg Hardy, Chevron spokesman.

"We don't discuss details of these types of matters that are under appeal with government agencies," Hardy said of providing any further public comment.

Bill McGuire, Davis County chief civil deputy, said company officials want its property assessment to be based on an "income methodology."

"(Chevron officials) want to modify the method of calculating the (value of the) property," he said.

"That is where the fight is. That is why we need some expert help."

The county contends that it followed state mandates in assessing the refinery property, McGuire said.

If Chevron is successful in its appeal, he said, it will have an impact on the amount of taxes the refinery paid to the county in 2009 and 2010 -- tax revenues that have technically been spent.

The Chevron Refinery is on 346 acres in southern Davis County, near the North Salt Lake city border, according to the Davis County Recorder's Office.

Chevron has experienced a series of spills from ruptured pipelines in the state. Last month, a pipeline ruptured at Willard Bay State Park, spilling diesel fuel into marshes. It was Chevron's third pipeline leak in Utah in the past three years.

Another pipeline leak sent crude oil rushing down into a Salt Lake City creek in 2010. Months later, the same pipeline ruptured again.

Each pipeline leak involved a spill of 21,000 or more gallons of crude oil or fuel.

State officials are crediting a beaver dam for helping contain the fuel spill at Willard Bay, but it left a family of beavers with petroleum burns.

Chevron paid a $4.5 million settlement to Utah and Salt Lake City and spent millions more cleaning up the first of three oil spills in 2010 that fouled Red Butte Creek.

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