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3M wins decision on taxes
Ruling saves plant almost $1 million.

The Missouri State Tax Commission has ruled that Boone County overvalued 3Mís personal property tax in 2004 by more than $36 million, ending the companyís nearly four-year tax appeal and resulting in a refund of almost $1 million.

Schauwecker

The full commission in October upheld the decision of a senior hearing officer to set side Boone Countyís $56.8 million valuation of 3Mís personal business property, agreeing with the companyís estimate of about $20 million.

In November, the county collectorís office issued a refund to 3M for overpaid taxes and released taxes to various government entities, including Columbia Public Schools, that had been held in escrow during the appeal. In March, the collector sent another set of checks to the company and taxing entities after disputed real estate valuations from 2005 and 2006 were finalized.

Boone County refunded 3M $946,818 for personal business property and real estate taxes. Most of that money, about $730,000, came from a 3M appeal concerning its business personal property for 2004.

County records show the Columbia school district would have received about $937,439 with the original valuation. After the state tax commission lowered the valuation, the school districtís share of the tax revenue totaled $549,112, before county fees.

The dispute hinged on the methodology used to estimate the value of equipment in the 3M plant at 5400 Paris Road, which produces components for electronic equipment.

The county assessorís office based its estimate on the income the plantís equipment generated and had solicited information from the company about sales of products produced in Columbia. 3M argued the income approach was not appropriate for appraising personal property and based its estimate on what the equipment would sell for on the open market.

Boone County Assessor Tom Schauwecker this morning said that this particular area was ripe for appeals because unlike other states, Missouri does not have a defined methodology for valuing personal property taxes.

A law passed in 2005 provides for uniform assessment of personal property based on the original cost of the property, less depreciation as set forth by defined schedules. Businesses were to use the guidelines outlined in the legislation beginning in 2007 for property put into service after Jan. 1, 2006.

"This legislation effectively ended business personal property tax disputes because Missouri enacted a standard," Schauwecker said. "My local policy was net book value: Whatever you report to your stockholders as an asset, declare that as personal property. Unlike other states that defined standards, Missouri did not" have one "until this legislation."

The 3M property tax appeal began in 2004 when the company came before the countyís board of equalization to appeal the original assessment.

Schauwecker said he had met with 3Mís tax specialist in May, about a week before the tax rolls were closed. The 3M representative expressed concerns about the real estate valuation but never said anything about the business personal property tax, the assessor said. "Within a week or 10 days of closing the tax rolls, they assessed at $54 million," Schauwecker said. "Thirty days later, they said it should have been $20 million."

Representatives from 3M were not available for comment.


Reach Sara Semelka at (573) 815-1717 or ssemelka@tribmail.com.


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