Under pressure: Suit could require millions to be returned in taxes

By Richard Greene | Published Wednesday, February 13, 2019

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Wise County entities collectively could have to return $2.815 million in property taxes and interest to natural gas companies as a result of a court decision on the taxable value of large leased compressors.

The compressors are used by gas operators to move the gas into transportation lines at the pressure necessary for the product to be transported toward its destination.

In September, the Texas Supreme Court upheld a previous decision that compressors, which are valued around $500,000, are considered heavy equipment, allowing for inventory to be taxed at one-twelfth of the year’s rent. The court also granted situs, meaning taxes applied to where the owner conducted business rather than the county of the compressor’s location on Jan. 1.

“It’s $5 billion statewide,” said Wise County Chief Appraiser Mickey Hand. “We’re No. 2 in the state.

“It’s going to be a huge impact.”

Wise County trails only Tarrant County in potential loss due to the ruling.

USAC out of Austin is one of the main companies to file a claim for the back taxes from 2012 to 2017. Many Wise County entities, including Decatur ISD and the county, are required to cut six-figure checks to the company before a March deadline or face a 12-percent interest penalty on top of the principal.

Wise County Judge J.D. Clark met with USAC representatives Thursday to discuss options to pay back the amount, which could potentially be a “financial hardship” to smaller entities such as Alvord ISD and Slidell ISD.

“Discussions are ongoing. We’re going to work with our entities to see what solution may be available,” Clark said Friday morning.

Decatur ISD has allotted $162,174 to pay USAC but was waiting for Clark’s meeting before making the payment. The money will be pulled from its reserves, said Decatur ISD Superintendent Judi Whitis.

“We have until early March. We’re going to continue to monitor it,” Whitis said. “The appraisal district gave us a good background of what happened and how we got here. We appreciate the information that has been shared.”

Boyd ISD Superintendent Ted West said the district has been notified by some companies, including USAC and has allotted between $250,000 and $275,000 to pay back.

“We’ve made the budget amendment,” West said. “We’re in good financial shape to handle it, but we don’t want to ever lose that money.”

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