Calumet protests taxes, county tax appeal board lowers taxable value by more than $200 million

Calumet Montana Refining protested their 2017 taxable value from the Montana Department of Revenue that set the amount at $538 million.

The appeal went to the Cascade County Tax Appeal Board in February and the company asked that their taxable value be set at $190.7 million.

The appeals board voted to set the value at $312.5 million.

Calumet argued that the DOR hadn’t fairly assessed their property in comparison to other refineries in Montana, such as those in Billings and Laurel.

Philip Murphy, Calumet’s tax director, said the company was being valued improperly by DOR and received a much higher tax valuation than they were expecting.

Calumet bought the refinery in 2012 and Murphy said they paid $1.4 million in property taxes that year. Now their taxes are $9.6 million, Murphy said during the February hearing.

In the county tax appeals board’s determination, Pete Fontana wrote: “Based on the examination of the four refineries in Montana and supported by the testimony of the taxpayer it appears the DOR has failed to equalize the value assigned to these refineries. The Calumet property is the smallest refinery based on production yet carries the highest assessed value per barrel. The benchmark for a refinery in the industry is the number of barrels it can produce per day. The three refineries in Billings and Laurel have more than twice the capacity as the Calumet property. The values among similar tax types do not seem to have been equalized and places a significantly unfair tax burden to the Calumet property.”

Since Calumet bought the property, the company made roughly $500 million worth of improvements, which the DOR said caused the increased taxes.

In a statement provided to The Electric, DOR said: “The Montana Department of Revenue arrived at an appropriate market value for Calumet in accordance with Montana Code Annotated and administrative rules. The methodology that the department applies to oil refineries is the same methodology used to value all the industrial property in Montana. In certain circumstances, companies provide additional information to the department through the appraisal process or an informal review and we are able to develop additional approaches to value. The department is considering whether to appeal the County Tax Appeal Board decision to the Montana Tax Appeal Board with regards to Calumet.”

Both the DOR and Calumet have 30 days from the county board’s Feb. 20 decision to appeal to the Montana Tax Appeals Board.