W.Va. appeals Jefferson County tax ruling

March 27, 1997


Staff Writer, Charles Town

CHARLES TOWN, W.Va. - The West Virginia State Tax Commissioner has filed an appeal of a decision by the Jefferson County Commissioners that cut Halltown Paperboard Co.'s taxes by nearly $100,000.

Tax Commissioner Robin C. Capehart this week filed an appeal of the County Commissioners' decision, saying the county should not have lowered the company's appraisal by $10 million.

On Jan. 20, the County Commissioners, who sit as the Board of Equalization and Review, lowered the appraised valued of machinery and equipment from $16 million to $6.3 million at the company's request and over the objections of state and county tax officials, who had used the company's own numbers in making the assessment at the higher level.


The company would have paid $236,075 in taxes, but instead owed $143,029, a savings of $93,045 a year, officials said.

The Commissioners voted 3 to 2 to lower the appraisal, with Commissioners James G. Knode, Dean Hockensmith and James K. Ruland in favor of the decrease, and Commissioners R. Gregory Lance and Edgar R. Ridgeway against.

"These were figures presented by their own people," Lance said. "I thought it was a bit high, but the main reason I voted against it was these weren't numbers manufactured by the state. This was based on the company's own numbers."

Hockensmith said the company's comptroller made a mistake in the numbers he provided to the state.

Ruland said he was concerned about the size of the increase in the company's assessed value.

Knode said he could not recall the exact reason for the decrease.

Jefferson County Prosecuting Attorney Mike Thompson said the decision by the County Commissioners to lower the appraisal was "highly unusual."

Thompson represented the county assessor's office and tax office before the Board of Equalization and Review and had argued against the decrease.

Thompson said he's never seen an appraisal lowered by nearly $10 million by the County Commission since he started in 1985.

The state's action also was unusual.

"I can't remember a time when the state tax commission appealed a County Commission decision," said Lance said, who has been a commissioner for 11 years.

The state tax office had valued the property at just over $6.3 million before it was sold in 1995 to Republic Paperboard Co., which bought it for $28 million.

In September 1996, the company filed a property tax return that showed a value of $23 million attributable to the company's machinery and equipment, according to court documents.

The tax department's appraiser adjusted the company's assessment to give the company credit for pollution abatement equipment and for property that had been put in the wrong categories, lowering the company's assessment to $16 million, according to court documents.

Company officials still thought the new assessment was too high and appealed to the Jefferson County commissioners.

At the hearing, the state tax department's appraiser, Gearl Raynes, testified as an expert witness to the accuracy of the assessment, according to court documents.

The company's plant manager also testified. He told county officials that the values for the machinery and equipment on the property tax return were the values the company set for federal tax depreciation purposes and were not meant to be used for property tax value purposes, the documents said.

Thompson said the company wanted to list the same equipment as having two values: A high value to save on federal taxes through writing it off as depreciation, but a low value when it came time to be assessed for state taxes.

Company officials did not return calls seeking comment.

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