Court tells Columbia County to repay $3 million to NW Natural

Coffers are $3 million lighter following Oregon Supreme Court decision

By Erica Ryberg

The South County Spotlight, Feb 24, 2010, Updated Feb 24, 2010 (2 Reader comments)

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Columbia County is refunding NW Natural nearly $2 million plus another $1 million in interest following a Jan. 29 Oregon Supreme Court decision.

The county is one of 16 affected by the court’s policy-setting finding that centrally assessed companies — utilities and similar entities spread out over more than one county — are exempt from paying taxes on their inventory. From 2002 through 2006, the utility had been paying the Columbia County taxes on the natural gas it stores in the depleted Mist gas fields.

This is the third time the issue has been in court since 2004; each time the courts decided in NW Natural’s favor, but as the case wound its way through the legal system the utility continued to pay the county taxes at the level the revenue department had assessed and the county continued to distribute the cash.

Merri Seaton, a manager with the valuation section of the Oregon Department of Revenue, said in the next few days the revenue department will be notifying the counties with the taxable value of NW Natural’s holdings under the Supreme Court ruling, which centered on two conflicting pieces of Oregon legislation over the taxability of those gas stores, one of which said that the inventories of centrally assessed entities are taxable and one that business inventories are not.

Repaying the utility has impacted the bottom lines of more than three dozen strapped tax districts, including schools, fire districts, cities and even the county itself, whose budgets rely in part on property taxes.

But several representatives from those entities said that because they budget anticipating the possibility that not all residents who owe taxes will pay them, there’s enough play in their budget to absorb all or most of the shortfall.

Enough, that is, if most residents actually do pay their taxes.

“It’s a day-by-day process, because you never know how much taxes are going to be paid,” said Marit Nelson, finance director for Columbia River Fire & Rescue. “If people pay their taxes, and the money we expect to come in, comes in, then, yes, we will do OK. I hope for the best, I expect the worst.”

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