Supreme Court: CHS dispute must go through tax appeal process

2013-04-17T12:45:00Z 2014-08-25T07:43:32Z Supreme Court: CHS dispute must go through tax appeal processBy JAN FALSTAD jfalstad@billingsgazette.com The Billings Gazette

The Montana Supreme Court has ruled in favor of the state Revenue Department in a property tax dispute with CHS Inc.

Yellowstone County Treasurer Max Lenington said that since 2009, CHS has disputed the way Montana assessed its property taxes, chiefly on the Laurel refinery. CHS has appealed nearly $14.6 million in property taxes from 2009 through 2012, he said.

The Supreme Court ruling was procedural. The court ruled that CHS' challenge must be raised through Montana’s administrative tax appeal process before resorting to the courts.

CHS began disputing its case administratively and then sued in Yellowstone County District Court. When that court ruled against it, CHS appealed to the Montana Supreme Court.

CHS said it filed its protest in District Court so the issue would be resolved more quickly, but it will pursue an appeal administratively as soon as possible.

"We continue to believe that the Laurel refinery has been assessed millions of dollars in excess property value in comparison to other area refineries, as much as twice as much," said CHS spokeswoman Lani Jordan. 

While protests are being resolved, individuals and companies must pay their property taxes into an escrow account.

Laurel Superintendent Tim Bronk said in 2009 the district spent the protested money and had to pay it back when CHS won a legal round.

Since then, the district has been spending protested tax funds conservatively, he said, including delaying technology purchases, using textbooks longer and cutting travel expenses.

"I would be happy to have this protest over with and resolved," Bronk said.

In addition to the Laurel refinery, CHS operates marketing facilities in Gallatin and Missoula counties.

Gene Walborn, division administrator for the state Revenue Department in Helena, welcomed the court's decision.

"I don't think they can effectively appeal this to the U.S. Supreme Court," said Revenue Department spokesman Mary Ann Dunwall.

Some other major corporations doing business in Montana also have disputed the Revenue Department’s methods and procedures. Phillips 66 is protesting some of its taxes administratively, so it won't be affected by this ruling, Walborn said.

Verizon, Bresnan Broadband, now called Optimum, AT&T and Puget Sound Energy are also protesting their property taxes in Yellowstone County. After several years of protests by large companies, the county is holding about $35 million in disputed taxes, Lenington said.

Meanwhile, the Montana Legislature has passed at least one bill calling for interim studies of the tax appeal process.

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