West Virginia Record

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Bayer takes tax assessment plea to Supreme Court

By Kelly Holleran | Sep 3, 2008

CHARLESTON -- A Kanawha County business made its case for a lower tax assessment Wednesday to the state Supreme Court.

Bayer Material Science claims tax assessments on its building were erroneously reported. The company appealed a Kanawha Circuit Court finding with the hope that the Justices will find the company is eligible for a larger tax deduction in 2006 and 2007 than the county tax commissioner calculated.

In June 2006, Kanawha Circuit Judge Duke Bloom found Bayer should receive the $10.9 million deduction the tax commissioner calculated rather than the $21.1 million deduction Bayer's expert calculated.

Millions of dollars separated the two figures because of different approaches used in the calculations, according to the final order issued June 29, 2006.

Bayer initially contested the tax commissioner's calculations to the Kanawha County Commission, sitting as the Board of Equalization and Review, during a Feb. 23, 2006, meeting.

But the Board did not agree with Bayer's challenges.

When Bayer brought the case to Kanawha Circuit Court, it contested the Kanawha County Commission should not act as the Board of Equalization and Review, in addition to its previous argument.

Bayer claims that because the Commission collects a portion of the tax money the company was fighting to lower, there is a conflict of interest and an appearance of bias that violate its due process rights.

"The Commission is a politically elected body whose responsibilities include the control and oversight of the County's budgets and finances, an essentially executive role," an appeal to the West Virginia State Supreme Court of Appeals states.

"This type of tax proceeding is executive, not a judicial function," Chief Justice Elliot Maynard during during Wednesday's argument hearing.

"If you're going to give a hearing, you've got to give a fair hearing," Steven Broadwater of Rose Law Office, counsel for Bayer, replied. "You can't have the people who will benefit from the money hear the case."

But the state tax commissioner, the Kanawha County Commission and the assessor of Kanawha County state in their appellee brief that Bayer's claim would eliminate any governing body from presiding over legal matters.

"First, taken to its logical conclusion, Bayer's argument that the use of a county commission as a use of property tax equalization and review is unconstitutional would preclude any governmental entity from administering statutes over which they have been legislatively granted authority," the brief states.

Bayer also claimed the Board required it to prove by clear and convincing evidence that the tax commissioner's findings were in error.

The company claims it should have only been responsible for a preponderance of evidence, as stated in West Virginia law.

But clear and convincing evidence is the national standard used in tax assessment cases, the appellees state in their brief.

"Look at every other case this Court has considered in property tax," said Ancil Ramey, counsel for the Kanawha County Commission, said in Wednesday's hearing. "It has applied clear and convincing evidence."

In the Kanawha Circuit Court case, Bloom found Bayer failed to show the tax commissioner's assessment was erroneous by clear and convincing evidence and that the Board did not abuse its discretion.

Bloom relied on a finding in a 2000 case against American Bituminous Power Partners that stated, "Title 110, Series 1P of the West Virginia Code of State Rules confers upon the State Tax Commissioner discretion in choosing and applying the most accurate method of appraising commercial and industrial properties. The exercise of such discretion will not be disturbed upon judicial review absent a showing of abuse of discretion."

For Bayer, Broadwater and Herschel H. Rose of Rose Law Offices in Charleston are counsel. Ramey and Hannah B. Curry of Steptoe & Johnson are counsel for the Kanawha County Commission.

Stephen C. Sluss is counsel for the Kanawha County Assessor; Robert W. Schulenburg III is counsel for the Kanawha County Prosecuting Attorney's Office; and L. Wayne Williams is counsel for the State Tax Commissioner.

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