Lawsuit over tax exemption appealed to Supreme Court

BUCKHANNON — The West Virginia Attorney General’s office will represent the Upshur County assessor in a case involving corporate tax relief that has been appealed to the state Supreme Court. 

At its Feb. 15 meeting, the Upshur County Commission voted to approve appointing attorney Wayne Williams with the attorney general’s office to represent assessor Dustin Zickefoose in a consolidated case involving a company that is suing Zickefoose, Randolph County assessor Phyllis K. Yokum, Barbour County assessor John M. Cutright, state tax commissioner Dale Steager and director of state forestry of the Division of Forestry Charles Dye for more than $500,000 in tax relief.

The case was originally filed by Penn Virginia Operating Co. in Upshur County March 24, 2016, against then-Upshur County assessor Donald Rice prior to Zickefoose being elected assessor. The case was later consolidated in Randolph County Circuit Court on June 15, 2017, according to Randolph County Circuit Court records.

Penn Virginia Operating Co. — for which no address was listed in Randolph County Circuit Court — filed the appeal for tax relief under the managed timberland exemption. If a private individual or company owns land that qualifies as “managed timberland,” the taxpayer pays less in taxes than it would on normal property, according to Zickefoose. A company or individual must submit an application for certification as managed timberland by Sept. 1 of each year to qualify or maintain the reduced tax status.

However, for the tax year 2016, Penn Virginia Operating Co. missed the application deadline, according to records in the Upshur County Circuit Court. The state, which determines managed timber eligibility, denied the late application, which led the company to file a lawsuit for relief, which was denied in Randolph County Circuit Court in late 2017. On Jan. 8, 2018, Penn Virginia filed an appeal with the West Virginia State Supreme Court, Randolph County Circuit Court records indicate.

Zickefoose said the majority of the land Penn Virginia wants to claim as managed timberland is within the bounds of Randolph County, but they did pay some additional tax in Upshur County as a result of missing the Sept. 1 deadline.

“Penn Virginia owns 2,500 acres in Upshur County, but they filed the managed timberland exemption late,” Zickefoose explained. “Their bills [in Upshur County], that have been paid, totaled $20,500. That’s $16,000 more [than they owed] in the 2015 tax year.”

Zickefoose explained that his office has had little involvement in the litigation thus far.

“They have to apply with the Division of Forestry by Sept. 1, and the Division of Forestry then sends the assessors’ offices a list of approved people under that program,” Zickefoose said last week. “By them missing the deadline, they paid $16,000 more in taxes in Upshur County.”

But that amount pales in comparison to the total amount in Randolph County — approximately $500,000, Zickefoose said.

“The majority of this falls in Randolph County,” he said. “It totals upwards of $500,000 actual tax dollars for Randolph County. There’s not much [land] in Barbour and Upshur, but they still missed the deadline.

“As far as any hands-on involvement on the part of our office, it just comes through the state tax department and the division of forestry,” Zickefoose added. “We don’t physically take these applications, but this is a big deal for them. It’s a big deal for this company.”

At the commission’s Feb. 15 meeting, county prosecuting attorney David Godwin said he had received notice from the attorney general’s office that it was willing to represent Zickefoose in the appeal to the state supreme court. Commissioner Terry Cutright made a motion to approve Williams with the state attorney general’s office representing Zickefoose, which was seconded by commissioner Troy “Buddy” Brady.

The attorney general’s office declined to comment on the case when contacted by The Record Delta last week.

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