Most ITA members should have received the final property tax assessments
distributed by the Iowa Department of Revenue on or about October
15th.
ITA urges all members to consider filing a formal protest/appeal of your
property tax assessment within the 30 day deadline, which is November 14,
2011. This is something you must do individually, or with the assistance
of legal or financial counsel.
Background Some companies have seen wide fluctuations in their assessed values compared to
past years. Some of these may be due to improvements in your plant (fiber
upgrade, switch upgrade, etc.) Other fluctuations may have been caused by
the Department’s elimination of the "Adjustment Factor,” a slight change
to the equity rate, removal of deferred taxes from the formula, and the equity
to debt ratio was standardized at 85/15. ITA understands that these
impacts vary widely among companies.
In ITA’s September 7, 2011 Special Report on Property Taxes
we previewed action our Task Force and identified some options for ITA members
to take. ITA’s August 26th Special Report analyzed the
ruling by Polk County Judge Novak in favor of Qwest in its claim that it is
unconstitutional to assess personal property.
ITA Action ITA is actively pursuing property tax relief on several fronts. During
this month’s ITA Legislative Roundtables, Joe Hrdlicka and Dave Duncan are
meeting with ITA members and key legislators to discuss ways we can implement
real property tax reform.
ITA has met with Department of Revenue Director Courtney Kay-Decker and new
central assessment director Julie Roisen. During that meeting, ITA
notified the Department that it should expect most or all ITA members to file
formal protests relating to the constitutional issue of taxing personal
property.
ITA Member Options While ITA helps distribute information and options, we cannot make individual
filings on behalf of companies because the characteristics of each company
differ. ITA’s general counsel, the DavisBrown law firm, has advised that
it is handling the individual appeals/protests for many of ITA’s members.
Each ITA member must decide on its own how to proceed, including whether to
hire counsel, or which counselors to use.
There are some similar property tax issues amongst RLECs. First is the
objection to assessments based on personal property. This is the dispute
that Qwest is litigating, and which ultimately may be decided by the Iowa
Supreme Court. Any other taxpayer (i.e.,all ITA members) who wishes to
preserve the right to dispute the assessment of personal property on the
current tax year assessments must do so by filing a protest by November
14th.
The Davis Brown firm advises that its clients will be raising a number of
objections in addition to the personal property assessment. These
objections/protests depend on individual company characteristics. These
other issues include assessment of purchased goodwill, the treatment of the
income approach when income is <0 and the use of an improper equity rate.
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