- About Us
- Local Savings
- Green Editions
- Legal Notices
- Weekly Ads
County expects tax windfall
A state Department of Revenue decision could mean at least $640,000 in new money for Island County taxing districts.
American Eagle Northwest, LLC took control of housing on Navy property earlier this month, effectively becoming the landlord for 1,551 houses on Maylor Point, Crescent Harbor and Saratoga Heights.
Existing tax rules state that privately owned property on publicly owned land must be taxed as personal property, similar to a tractor or other equipment. The money collected from personal property taxes do not affect the amount of money a taxing district can collect, Island County Assessor Tom Baenen said.
But, under a state Department of Revenue ruling made this week, the homes on Navy land will be taxed as new construction in the future. This means that at least $643,000 in new money will be added to the budgets of various taxing districts in the county.
If I can get it on as new construction, it might go on (the tax roll) next year, Baenen said.
Realistically, however, Island County will not see the money until 2007.
Baenen said that he and assessors from other counties requested a review of a Sept. 17 state determination that the private portion of public property was taxable as personal property.
The new decision will affect properties across the state, said Peri Maxey, assistant director of the Department of Revenues property tax division.
It will allow districts additional money in the levy setting process, she said. It will also allow counties to pick up new money.
If the county had to tax American Eagles property as personal property, it would lower the levy rates, but not affect how much money a taxing district can receive. With the new rule in effect, taxing districts can adjust their budgetary requests and collect more money.
The land itself wasnt an issue, said State Tax Exemptions Specialist Mike Braaten, explaining the issue was whether or not the improvements built by the developer were real or personal property. The question is whether the improvements are privately owned.
The road to collecting the money is not without its hazards, however. Baenen said that American Eagle values its holdings in Oak Harbor at $77.5 million. The county, however, places the value closer to $117 million.
We do not agree with their capitalization rate, he said.
Representatives from American Eagle did not return phone calls to their regional offices.
Baenen also said that the company was able to avoid being placed on this years tax roll by delaying closing its deal with the Navy until Jan. 15.
Last year, Island County saw $220 million in new tax money from new construction. Island County Commissioner Bill Byrd said that the new money will be welcome, even though its effects will be thin and wide.
At the same time, thats no small thing because all the other tax districts would get their fair share, he said.
You can reach News-Times reporter Eric Berto at firstname.lastname@example.org