Monday, December 17, 2012

PSC tallies impact of court ruling on cable TV property taxes

Posted By on Mon, Dec 17, 2012 at 1:17 PM

I wrote last week that a state Supreme Court decision held that Charter Cable had lost its challenge of the state's assessment of its intangible property (such as franchise agreements and good will) as part of the amount on which it pays property taxes. Charter no longer owns property in the state, but paid two years of taxes under protest.

The Public Service Commission, which assesses utility property, rounded up for me how much money is potentially at issue. These estimates are the amount that will be released in the appropriate counties when and if the Supreme Court decision becomes final. From the PSC:

Following is an estimate of the valuation of Charter’s property for ad valorem taxation purposes. In its pleadings before the Commission, Charter did not specify the amounts it is contesting. Therefore, these numbers are the Tax Division’s estimates of the differential in valuation amounts. In 2008 and 2009, Charter paid its taxes under protest as required by the statute. Those are the only tax years directly affected by the Court’s decision. Charter no longer has any property in the state, and its last assessment was in 2010.

In 2008, the assessed value was $4,689,000 and the Tax Division estimates that Charter would have claimed an assessed value of approximately $1,615,941 less. The estimated tax differential would be approximately $75,303. In 2009, the assessed value was $5,550,000 and the Tax Division estimates that Charter would have claimed an assessed value of approximately $1,370,818 less. The estimated tax differential would be approximately $63,880.

The Charter case applies only to Charter. But presumably the precedent is clear enough to apply to all cable companies eventually. And others have challenged their assessments and paid taxes under protest, meaning the money has been withheld pending resolution. That total amount is significantly larger on an annual basis. The PSC again, in a note from director John Bethel:

The Tax Division estimates that the remaining cable appeals from 2009, 2010, 2011 and 2012, represent an aggregate assessed value of approximately $149,151,090 and estimates a difference of approximately $73,379,621 in assessed value between the Tax Division and the cable companies. The estimated tax differential would be approximately $3,419,489. As with Charter, the other cable companies have not identified the amount of the assessed value under protest in any filings before the Commission.

When a company pays under protest, it must specify the amount protested to the counties. Neither the Tax Division nor the Commission sees the bills from the counties or the payments made to the counties.

I have not had a call returned by the lead lawyer for the cable company in this case, who practices in another state, about plans in light of the ruling.

Here's a list compiled by the PSC of counties where cable companies are contesting the higher assessment figures and potentially accruing a future windfall under this ruling for local taxing units, primarily schools.

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