The Billings ConocoPhillips refinery will protest a portion of its 2010 taxes, which will cost Billings Public Schools about $380,000, at least temporarily.
The refinery, which sits within Billings city limits, owes Yellowstone County $3.35 million for the first half of 2010. In an announcement Wednesday, the refinery said it would protest $807,100 of that amount.
“We believe this is a very reasonable settlement that will avert a prolonged appeal and litigation,” Bob Adair, a senior consultant on property tax for ConocoPhillips in Houston, said in a statement.
Roughly 47 percent of the tax ConocoPhillips pays goes to Billings School District 2. The protest would leave SD2 with $1.2 million instead of the full $1.58 million.
The announcement by ConocoPhillips means two of Yellowstone County's three refineries have protested their taxes.
Laurel School District lost $1.5 million after CHS Inc. protested its taxes last year. The protest by CHS Inc., which owns Cenex gas stations, is ongoing.
Last month, ExxonMobil pulled back from a decision to protest its taxes, which would have cost the Lockwood School District $900,000.
The state reassesses property values every six years, the most recent reappraisal coming last year. When property owners disagree with the reassessment or even just the amount, they have the option to protest, the first step in challenging the state's reassessment.
When companies — or city residents — file a protest, they are still required to pay the taxes due. But the payments, instead of going to schools and other county services, sit in an interest-bearing escrow account until the dispute is resolved, a process that can take years.
If the protester prevails, a portion of the taxes are returned to reflect the lower tax rate along with the interest earned in escrow.
If the government prevails, the tax money is then distributed to the various county services and schools. The interest is moved to a fund used by the county to cover shortfalls caused by ongoing protested tax adjudications.
Under state law, school districts can access the protested funds a year after the protest begins. Should the county lose the protested tax case, it can levy another tax on the community to collect the money it needs to pay back the protester.
The irony is that the company then pays the new tax to get the money it won by protesting its old tax rate.
Contact Rob Rogers at email@example.com or 657-1231.