Supreme Court denies Bayer tax breaks

By Kelly Holleran | Nov 19, 2008


CHARLESTON -- A ruling issued Wednesday by the state Supreme Court confirmed a lower court's findings that denied Bayer tax breaks it was seeking and saved Kanawha County from losing more than $1 million in tax revenue.

Bayer first met with the Kanawha County Commission, which sits as the Board of Equalization Review, challenging a tax commissioner's 2006 and 2007 appraisals of their property value and claiming their properties were appraised at millions of dollars above their actual values.

The company claimed it was due a $30 million reduction in assessed value for 2006 and 2007.

After the Commission sided with the tax commissioner, Bayer appealed to Kanawha Circuit Court, complaining it was denied due process because the Commission sitting as the Board served a dual role -– it both receives a portion of the money from taxes Bayer pays and is allowed to determine the correct amount of the companies' appraisal. Therefore, the members of the Board were not impartial, Bayer contended.

"I was offended by that," Kanawha County Commission President Kent Carper said. "We are more than capable of being fair. We are elected. We have a constitutional duty. We have to protect the tax base of the county."

Once again, Bayer was denied relief after the Circuit Court Judges Louis Bloom and James C. Stuckey sided with the Board and the tax commissioner.

The circuit court found the tax commissioner's assessments were correct.

"The Tax Commissioner[']s use of the income method to calculate economic obsolescence was well within its discretion and the Tax Commissioner did not abuse its discretion in applying this approach to economic obsolescence," the Supreme Court wrote in its opinion.

It also concluded that Bayer was afforded due process.

"The legislatively mandated system to equalize and review the assessments is set forth in West Virginia Code, § 11-3-24, and the Board properly followed the statutes and properly applied the burden of proof to Petitioner's case," the Supreme Court wrote in its opinion.

When the circuit court released its findings against Bayer, the company appealed to the Supreme Court, claiming three errors.

First, it claimed the procedure through which taxpayers challenge tax assessments violates due process because the hearing is not in front of an impartial board.

But because Bayer was allowed to argue before the Board and before the circuit court, the tax commissioner and the Commission claimed it was allowed due process.

The Supreme Court agreed.

"In Foster, after conducting the requisite statutory construction and constitutional analyses, we determined that the procedure for hearing and deciding taxpayers' appeals adopted by the Legislature in W. Va. Code § 11-3-24 is constitutional: 'W. Va. Code § 11-3-24 (1979) (Repl. Vol. 2008), which establishes the procedure by which a county commission sits as a board of equalization and review and decides taxpayers' challenges to their property tax assessments, is facially constitutional,'" the opinion states. "Applying this holding to the decisions of the circuit court, which found that the subject statute had not deprived Bayer of due process, we find that Bayer is not entitled to relief on this issue because the statute of which it complains, W. Va. Code § 11-3-24, is constitutional."

Secondly, Bayer claims the burden of proof placed on a taxpayer violates due process because there is not a similar burden placed upon the assessor or the commission.

Bayer was forced to show through clear and convincing evidence that the tax assessments were erroneous, but the company claimed such a burden should not have been placed upon it.

However, the Supreme Court ruled that the burden of proof should be placed on the party bringing the suit.

"When a plaintiff comes into court in a civil action he must, to justify a verdict in his favor, establish his case. ... The burden of proof, meaning the duty to establish the truth of the claim ..., rests upon him from the beginning, and does not shift, as does the duty of presenting all the evidence bearing on the issue as the case progresses," the opinion states.

Finally, Bayer claims that its tax assessments were erroneous, and it contested the method the tax commissioner used for his calculations.

But the Supreme Court could find no abuse on the part of the tax commissioner and affirmed his appraisals.

The Supreme Court and Kanawha Circuit Court should be commended for saving taxpayers money, said Carper.

"For every dollar a taxpayer refuses to pay, all other taxpayers end up paying more," he said. "It's a taxpayers' fairness ruling."

On the other hand, Bayer should stop throwing around frivolous lawsuits that are wasting taxpayers' money, Carper said.

Carper said this lawsuit cost Kanawha County taxpayers $60,000 to defend their position. If various other factors are included, such as the prosecuting attorney's time spent on the case, the cost increases to more than $100,000, he said.

"You would think a company that needs critical emergency services like they do would be more respectful of taxpayers' money," Carper said.

The company has two similar lawsuits sitting in Kanawha Circuit Court now, he said.

Only three weeks ago, Bayer was on the losing end of another Supreme Court ruling in which it sought money from mistakes it made on its taxes.

"How many times will they have to lose?" Carper said. "It's just been one attack after another. A rational, responsible company would knock this off. They just don't get it. Maybe they will now."

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