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Phillips 66 has taken its property tax protest involving its Billings refinery to court in Yellowstone County.

In a complaint filed in Yellowstone County District Court in mid-August, Phillips 66 said the Montana Department of Revenue illegally or improperly raised the refinery’s market value for 2010, resulting in a tax bill that was $623,715 higher.

The refinery’s market value in 2010 should be $379,718,534, the complaint said, not the department’s retroactive change to $508,333,155.

The oil company, formerly called ConocoPhillips, also asked Yellowstone District Judge Ingrid Gustafson to block its revised tax assessment, saying it will “suffer irreparable injury absent the issuance of a preliminary injunction.”

Phillips 66 officials in Houston declined to comment further, saying the company’s position was summarized in the complaint.

The complaint also said Montana is improperly trying to retroactively raise the refinery’s tax assessment from 2003 through 2010 in order to collect more taxes.

Revenue Department officials in Helena said Tuesday that they are reviewing the complaint and plan to file a response by the end of next week.

Under state law, the department has the legal authority “to secure a fair, just and equitable valuation of all taxable property …” because if one taxpayer fails to accurately report property, “all other taxpayers pay higher taxes,” according to department spokeswoman Mary Ann Dunwell.

After the department conducted a routine audit in July, it found Phillips 66 refinery property that had “either escaped assessment, been erroneously assessed or omitted from taxation” from 2003 to 2010, she said.

Billings attorney Robert Sterup and former Montana U.S. Attorney William Mercer of Holland & Hart are representing Phillips 66.

In addition to this tax dispute now being litigated, Phillips 66 appealed its 2010 and 2011 tax assessments to the Yellowstone County Tax Appeals Board, which sided with the company. The Revenue Department then appealed those decisions to the Montana State Tax Appeals Board, which has not ruled yet.

As of July, tax protests mostly by large corporations have tied up $30 million of Yellowstone County property taxes. That is 7.8 percent of the county’s total tax bill of $202 million and is more than double the taxes protested in 2009. Yellowstone County assessor and treasurer Max Lenington was not available for comment. 

The current tax protests are being filed mostly by oil refineries, cable television and telecommunications companies.

Last month, Gov. Brian Schweitzer told Billings businessmen that some 130 corporate taxpayers may try to cut their tax bills in half during the 2013 Montana Legislature. If they succeed, Montana small businesses and homeowners will see their tax bills rise sharply, he said.

Revenue Department Director Dan Bucks said last week that Yellowstone County homeowners would see $79 more in annual property taxes on a $100,000 home and that the owner of a $200,000 home would pay $158 more per year if the tax protests by the refineries and Cablevision, which owns Optimum (formerly Bresnan) prevail.

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Business editor for the Billings Gazette.