Tax appeals
Several companies and individuals were heard on their appeals of real property tax assessments at a recent meeting of the Marshall County Board of Supervisors.
Valero was first to appeal, seeking a freeport tax exemption on crude oil held in storage tanks.
John Fletcher, attorney for Valero, objected to the county tax assessor’s rejection of a request for a freeport use tax exemption for warehousing. Crude oil comes to the storage facilities in Chickasaw Trail Industrial Park and then is pumped to the Valero refinery in Memphis, Tenn.
The tax office argued that Valero does not qualify because the refinery is not located in Mississippi, and must be to meet Mississippi’s standards for freeport exemption.
Shayne Tapp said the tax office looked into the matter and determined Valero does not meet the requirements, and it is at the board of supervisors’ discretion as to whether to approve the freeport exemption.
The main concern is that the refinery is not located in Mississippi and therefore does not qualify, Tapp said.
Valero already pays taxes on its real property, equipment and pipelines in Marshall County.
District 5 supervisor Ronnie Joe Bennett said “it all boils down to discretion.” Board attorney Amanda Whaley Smith said the statutory requirements are not at the discretion of the board of supervisors to apply, but for the court to decide.
“We have to follow Mississippi law,” Smith said.
District 3 supervisor Keith Taylor said he did not favor offering Valero freeport warehouse tax exemption.
“I want to keep it as it is. I think the law is on the county’s side,” Taylor said. “We have to be fair to other industries up there.”
Taylor made a motion to deny exemption and the board approved the measure by unanimous vote.
Property appraiser Greg Gresham, with Gresham Realty, came before the board to appeal a tax assessment on a 1.2-acre tract located in a flood zone that is owned by Brame and Wright.
Gresham argued that the property, that once was used as a used car lot and is now being used to operate Bad Boys Barbecue trailer and cooker, is assessed more per acre than a nearby property that is not located in a flood zone.
The 1.2-acre tract was assessed at $95,000 an acre, he said, while a 3.1-acre property that is partially in a flood plain is assessed at $35,000 an acre. Another property across the street is assessed at $17,271 an acre.
“I believe those two properties are a better indicator of value,” Gresham said.
He said to develop the Brame and Wright property, it would have to be built up above the flood plain.
“$95,000 is way too high,” Gresham said.
Zoning director Ken Jones said the property would have to be built up 18 inches above the flood plain to develop it.
“That property is 100 percent in the flood plain and the south property partially in the flood plain is valued at $35,000 an acre,” Gresham said. “The problem is there is no consistency.”
Hillmer said the property is assessed at current use, the property Gresham is representing is being used commercially, and the property he is comparing it to is zoned residential. He said the property was assessed at
market value compared to properties that recently sold to O’Reilly and Dollar General.
“How much do you use comparable sale price of close by properties?” Taylor asked.
“Mr. Gresham currently has it listed for sale for $165,000,” Hillmer said presenting a print out listing from Gresham Realty. “That’s all we have to go by.”
Gresham said there was no point to appraise a property in a flood plain.
“Dirt cost would be so high to raise it up for a buyer to take it,” he said.
“Did you take into consideration the cost to build it up?” Bennett asked. “How can you tell what it is worth with timber on it? You got timber on one and it’s not worth as much.”
Hillmer said a bridge would have to be built across a ditch to fix an access problem to the 3.1-acre property – another reason it is assessed at a lower rate.
Zinn asked what the actual value of the property would be.
Gresham said a property appraised at $17,656 was sold for $5,000.
Taylor said his only concern is the property is in a flood zone and it would cost so much to build the property up above the flood plain.
The board asked for time to develop some numbers that could be used to negotiate.
Taylor asked to table the matter to give the attorney time to look it over.
Later in the day, the board determined to adjust the total value of the 1.2 acres from the original assessors’ value of $114,000 to a new value of $85,000, discounting the assessed value by 25 percent due to the property being in a flood plain.
Hillmer said it went down from an assessed value of $95,000 an acre to $71,000 an acre.
Amazon
James Poliyanskiy, with Amazon, asked the tax office to lower its assessed value from $46.5 million to about $29.5 million, Hillmer said.
This is the third year Amazon is to pay taxes on the building, Hillmer said.
Poliyanskiy said Amazon reviewed the value last year. The building was appraised at $46.5 million.
Hillmer said Amazon said they had invested $50 million according to their building permits.
Poliyanskiy said the county did not appraise the property but looked at the cost.
Three approaches to assessing the value include cost, the sale price, and market value.
Hillmer said Amazon has been in the building only three years and depreciation usually takes place after five years.
Zinn made a motion to leave the assessment as is since there were no substantial changes since last year’s appeal. The motion passed by unanimous vote of the board.
Poliyanskiy said Amazon was not asking for a discount, but that the property reflects the market value – what it is really worth.
Hillmer said market values fluctuate up and down. He used Walter Place as an example. The buyer pays a little, makes improvements, and sells the property for a high price. After it sells, time passes and the market fluctuates, it could be worth less and the next buyer purchases the property at a bargain and repeats the cycle.