Many of you are writing checks around this time of year to cover your property taxes in Louisiana, based on the millage rate in your particular locale and what your assessor values your residential or commercial holdings. There’s a process for what happens if you don’t agree with that value, and it’s at the heart of an ongoing feud between a group of parish assessors and the Louisiana Tax Commission.
The fight came to a head at a tax commission meeting last week, and there will likely be more rounds in the bout. But to understand what both sides are squabbling about, we need to look back a few years at another dispute that led to where we are today.
In 2012, D90 Energy LLC purchased two oil and gas wells in Jefferson Davis Parish. For tax years 2013 through 2016, the company claimed the value of the wells was based on their purchase price, citing Louisiana Tax Commission guidelines. The parish assessor rejected that calculation, instead coming up with a value based on the wells’ age, type, depth and output. He, too, cited tax commission rules.
D90 Energy unsuccessfully challenged the assessor’s valuation before the Jefferson Davis Board of Review and then appealed to the Louisiana Tax Commission. The company provided additional documentation to show its wells had not increased in value since their purchase. The tax commission used this information to come up with new valuations that the Jeff Davis assessor challenged in court.
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The issue ultimately landed before the Louisiana Supreme Court, which sided with the Louisiana Tax Commission in 2020. Afterward, the parties involved agreed it was time to iron out conflicts in state law that define the powers of parish assessors and the tax commission.
Assessors point to the section of the Louisiana Constitution that gives them authority to determine property valuations, while the tax commission notes it makes the rules assessors must use to come up with those numbers. A bill in the 2021 session of the Louisiana Legislature would attempt to hammer out the differences and codify them in state law.
But the original form of the proposal only added more fuel to the fire. House Bill 573 provided additional appeal options beyond the tax commission. It would have allowed an additional challenge to the Louisiana Board of Tax Appeals, which only handles disputes over sales taxes, or the state district court where the property assessment was being disputed.
“It would have gutted the authority of the tax commission and denied property owners due process,” Louisiana Tax Commission chairman Lawrence Chehardy said in an interview. He attributed the original language of the bill to the Louisiana Assessors’ Association.
Through multiple amendments, the bill’s final version ended up more palatable to Chehardy, who was the Jefferson Parish assessor for 34 years. It was approved and became Act 343 of the session. The next step involved the tax commission updating its assessment and appeal rules, which was on the agenda of last Wednesday’s meeting. The changes included requirements for assessors to respond in a timely fashion when their valuations are questioned and documents the tax commission can consider on appeal.
The assessor’s association wasn’t pleased with those rules and wanted the tax commission to delay its vote on putting them into effect. Its president, Union Parish Assessor Lance Futch, asked Chehardy if its members could instead meet separately with commissioners to discuss their differences. Chehardy refused, explaining that there had been three prior hearings through which the assessors could have added their input on those rules.
“And now the association wants to come in at the end and request a delay?” Chehardy asked Futch, who struggled for words. “I don’t understand.”
Brian Eddington, attorney for the assessors’ group, was seated next to Futch at the meeting. He told the Louisiana Illuminator afterward that Chehardy was “so duplicitous” to imply the assessors opted out of the rule-making process. The format isn’t a typical public hearing where opposition can be presented, Eddington said.
Currently, the Louisiana Assessors’ Association is “actively reviewing all options” with regards to challenging the new rules, its attorney said. A lawsuit is one of their choices, and another would be if the Legislature chooses to exercise its oversight power.
Cherhardy insists only a few assessors are behind the dispute. Eddington noted that around 45 parish assessors out of 64 were at the Capitol last week for the tax commission meeting.
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It’s seldom that the average homeowner takes a property tax dispute to the Louisiana Tax Commission, much less to the level of a court appeal. That’s more typical of large commercial property owners with more at stake and greater resources to fight that protracted battle.
So why should the average homeowner who pays property taxes in Louisiana care?
Chehardy used an analogy to answer that question. Imagine a busload of people go out to dinner, but half of them leave in the middle before the bill is paid. The tax commission chairman said this is the scenario if large property owners are allowed to forum shop when it comes to their valuation appeals, leaving the other half of property owners to pay a larger share of taxes.
Eddington says the rules put too much power in the hands of the tax commission, explaining that parish assessors are best equipped to make sound valuation decisions based on their local knowledge.
Both parties in this fight argue they are looking out for the best interests of property owners in Louisiana. You might want to pay close attention to this fight to see that they do.
Greg LaRose is editor of the Louisiana Illuminator. He can be reached at [email protected]
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