Back taxes owed by energy giant Kinder Morgan have begun flowing into Montezuma County coffers.
In December, the company cut a check for $1.38 million to the county owed from 2011, reports assessor Leslie Bugg. Of that, approximately $639,000 went into the county general fund, and $349,000 went to the Re-1 School District, with the remaining spread out amount special districts.
The money is the result of the county’s 2017 victory in a nine-year court battle over the correct taxable valuation of carbon dioxide produced by Kinder Morgan.
The Colorado Supreme Court ruled that Kinder Morgan did not qualify for a transportation tariff deduction because it is a majority owner in the pipeline that delivers the gas. The decision meant that Kinder Morgan had been undervaluing its true taxable value of produced gas, and was therefore underpaying its fair share of property tax.
Since 2008, the county has been auditing the company to determine additional taxes owed without the misapplied tariff deduction. Audits for 2008 and 2011 are complete, and the additional taxes owed paid. Audits for 2009 and 2010 are ongoing.
Bugg said the county will conduct one audit per year for the company’s 2012-2017 property tax reports.
Until the court decision came down, Kinder Morgan continued to claim the disputed transportation tariff, but has now ended the practice.
Assessor’s office on the huntIn the past few years, the county Assessor’s Office has been very committed to finding structures not listed on the tax rolls.
Bugg said since 2015, the office has found 500 new structures previously not on the tax rolls, but now are.
“Google Earth has been a big help because it was recently updated,” Bugg said. “Also we have been working closely with the county planning and mapping to identify new construction.”
But adding on property to the tax rolls is not necessarily the cash cow people think it is, Bugg said.
That’s because the taxable rate for vacant property is 29 percent of its assessed value, but for property with a home on it the rate is 7.2 percent residential rate.
When a modestly valued home is not recorded on the tax rolls, the county had been taxing it at the higher vacant property rate. Correcting it to the 7.2 rate for a modest home often lowers taxes for the homeowner and the county gets less revenues from it.
“Finding homes or new garages left off the tax rolls does not hinder the county, but it does not necessarily mean a huge increase in revenues either,” Bugg said. “What it does do is make sure everyone is treated fairly and the same.”
She pointed out that finding large, high-value homes not on the tax rolls could generate more revenues for the county.
Bugg said a small staff and a limited building permit system in the county makes it challenging to track new homes, barns, garages and major remodels, so they don’t always get added to the tax rolls.
To help fill in the gaps, the Assessor’s Office has teamed up with the county planning and mapping departments to be notified when driveway and septic permits are issued for new homes.
Besides using Google Earth and watching septic permits to flag new properties, Bugg said her staff also spends time driving around looking for new homes and upgrades. She said “tattletales” are another common way they find out about a home or new barn is not on the tax rolls.
“People will say why am I paying taxes but my neighbor is not,” she said. “When we drive out and look, for every one we find, there are two more so we feel we’re still missing a lot.”