Energy companies seek $7.2 million in refunds from Garfield County
December 18, 2017
Two energy companies say Garfield County owes them a combined $7.2 million in overpaid property taxes, and commissioners are weighing their options after a Supreme Court decision would seem to force their hand.
Encana and Caerus, which both operate in the Piceance Basin, say the county owes them $6 million and $1.2 million, respectively, after the companies erred and overpaid their property taxes.
Earlier this year the commissioners denied the companies' request for refunds and abatements, pending the Colorado Supreme Court decision, said Garfield County Assessor Jim Yellico.
Both companies then appealed that denial to the state Board of Assessment Appeals, and their appeals still stand.
Then, in November, the Colorado Supreme Court ruled in a Mesa County case, OXY USA Inc. v. Mesa County Board of Commissioners, that companies can request abatements on their own reporting errors. That precedent could now force Garfield County and other local property taxing districts to grant Encana and Caerus their refunds.
After meeting with commissioners in an executive session Monday, Yellico said he anticipates commissioners will soon approve the refunds and abatements.
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"The county has a track record of treating taxpayers fairly, so I believe they'll pay it. … They're not going to fight it," he said.
Since both companies filed for abatements in December 2016, the county has performed its own audit of their property tax payments. Yellico would not disclose what figures the county's audit came up with for the refunds, but he did say that it was lower than Encana's and Caerus' estimates.
If everything moves quickly, it will probably be the first part of the year when things will be finalized and the taxing authorities could start filing, he said.
That $7.2 million refund would end up being split among all the local property taxing districts, not just the county. That would include Grand River Hospital, the Garfield County Library District, two fire districts, the Parachute Recreation District, the RE-2 and Garfield County 16 school districts, Colorado Mountain College, and any other taxing district that receives property tax revenue from the energy companies.
However, Yellico says these types of refunds don't necessarily mean a net loss for the districts. On the other side of the coin, over the past eight years, Garfield County has had an audit program looking for the opposite of an abatement, which is property that is omitted from property tax payments.
Identifying those omitted properties then results in taxes distributed back to the local governments, Yellico said.
The county just finished an audit of Encana's property tax payments, which yielded about $700,000 in omitted payments from tax year 2011. Over the last eight years, identifying and collecting those omitted property tax payments has raked in about $17 million for Garfield County's taxing districts.
The state laws also favor the local governments in that the government can look back six years for omitted property, while taxpayers can only look back two years for an abatement.
"My standpoint on this as an elected official is that the focus of this office is just finding the right value," he said.