OIL AND GAS: Refineries challenge property taxes  (Monday, March 19, 2012)

In Montana, two local refineries are challenging $17 million in property taxes.
Cenex, a refinery owned by CHS Inc., is challenging $13 million in property taxes dating back to 2009. That money accounts for half of the Laurel, Mont., school district's budget.
And ConocoPhillips is disputing $4 million in back taxes it paid to Billings, Mont. The company said officials raised their taxes by 36 percent in 2009 and 10 percent in 2010. Officials said the tax hike was based on company investments and was not a change to the standard formula.
"Wherever possible, we try to work with state and local tax officials to reach tax valuations without going through a formal appeals process," said Richard Johnson, a ConocoPhillips spokesman. "Billings is an exception where we were not able to reach an agreement."
Other refiners have raised similar efforts across the country as oil industry officials say refinery values have plunged since the recession. Chevron Corp. is in the middle of a dispute over whether it is owed a property-tax refund that could total more than $150 million, while Exxon Mobil Corp. appealed a property-tax assessment in Torrance, Calif., last year. Valero Energy Corp. is disputing property taxes at three of its 16 refineries in the West.
But the tax pushback presents a paradox in Montana. The region escaped the worst of the recession because an oil boom kept unemployment low, and property tax revenues have risen without any increase to tax rates. Yet the state could suffer if the tax appeals are successful.
Gene Walborn, administrator of the Montana Department of Revenue's division of business and income tax, said the tax protests will probably take years to resolve (Joel Millman, Wall Street Journal [subscription required], March 19). -- JE