Utility companies pay fewer taxes in 2020, Carlton County residents more
More utility cases have been finalized.
About eight years ago, the Minnesota Department of Revenue decided on a formula to find the value amount to assess taxes on several utilities around the state. The companies felt they had been valued too high since 2008 and had been paying higher taxes than they should have been. They went to court to challenge the formula. Several smaller companies have already settled.
In November, Lake County Power had three of its six years dismissed by the court. The years 2017, 2018 and 2019 were settled out of court. They were awarded an approximately 4% reduction for each year.
The reductions were shifted to the 2019 payable 2020 year to avoid local jurisdictions from having to issue refunds. They will be paying less than they usually would in 2020 so local areas can avoid issuing refunds. That also means residents will be paying the 4% share the utilities are not paying in 2020.
Enbridge Energy, LLC had an initial ruling in May 2018 that was appealed to the Supreme Court. It sent it back to the tax court. The most recent ruling in November reduced Enbridge's Minnesota market value by 4%, 7% and 13% for the tax payable years 2012-14.
It can be appealed by the state or company, but will not result in refunds plus interest.
Enbridge Energy, LP, for tax payable years 2015 and 2016, had an initial ruling in June 2019 that was appealed. The November ruling awarded the company an increased value of the company by 5% and 3%, respectively. This can also be appealed. However, if it is not, it will cause a payment by Enbridge to be made to Carlton County for the shortage of taxes paid.
These cases affect everyone in Carlton County, but Perch Lake, Twin Lakes and Silver Brook townships will be affected the most. They have the most utilities running through their area, so they make up the largest percentage of total tax base.
Besides the recent rulings, the Department of Revenue under new administrative appeal guidelines has reduced the utilities estimated market value for 2019 taxes, payable in 2020, which also affects residents. The benefits are that the companies have a chance to get their valuations corrected by the administrative appeal instead of filing through the tax court. This is more efficient and saves the taxpayers from issuing refunds plus interest to the utility companies.
The downside is the utilities will be paying less in taxes, which means taxpayers will need to pay more as it needs to be paid from somewhere.
Residents can see the changes on their 2020 proposed property tax statements.