OLIVIA -- Renville County and other local taxing entities will not have to refund the Southern Minnesota Beet Sugar Cooperative any portion of the property taxes it paid in the years 2004 and 2005.
The Eighth Judicial District Tax Court denied an appeal by the cooperative that challenged how the county assessed its sugar beet processing plant and land for taxing purposes, according to a decision filed Dec. 22 and authored by Chief Tax Court Judge George W. Perez.
In his ruling, Judge Perez affirmed the county assessor's estimated market values on the property for the taxes paid in the two years. The property was assessed for taxes based on estimated market values of $20,168,500 in 2003 and $20,134,000 in 2004.
In its lawsuit, the Southern Minnesota Beet Sugar Cooperative charged that the county had unequally assessed its property, placed too high a value on it, and included as taxable property tanks, silos and other equipment that should not be considered as taxable property.
In materials filed by the company's legal counsel, the cooperative placed an estimated market value on the property of $7.5 million.
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Had the tax court ruled in favor of the company and lowered the assessment, Renville County, the Renville County West School District and Emmet Township would have had to refund a portion of the property taxes they received for those two years.
A revised assessment could have potentially cost the taxing entities many thousands of dollars. The sugar processing facility is the second largest taxpaying entity in the county, led only by the Alliance Pipeline Company.
The sugar cooperative paid taxes totaling $578,746 in 2004 based on the 2003 valuation and $557,024 in 2005 based on the 2004 valuation, according to figures tabulated by County Recorder Barb Trochlil.
A call seeking comment from the cooperative was not returned.
The sugar cooperative has the right to appeal the decision or parts of it, according to Glen Jacobsen, assistant county attorney for Renville County.
"It is very gratifying to receive the decision. But it's too early to get too joyous,'' he said, referring to the possibility of an appeal.
Jacobsen said the county is also awaiting a court ruling on a second lawsuit filed by the cooperative. It challenges the tax assessment in 2005 for taxes payable in 2006.
In the course of collecting information to respond to this lawsuit, the county determined that its assessment of the cooperative's property had neglected to include all of the taxable property, said Jacobsen.
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As a result, the 2005 assessment for taxes payable in 2006 was revised to show an estimated market value of $38,200,000. The sugar cooperative's total taxes payable in 2006 totaled $983,098 with the higher assessment.
Jacobsen said the court's decision gives the county reason to believe that it is acting in an appropriate, fair and just manner in determining market value, and that it may prevail in the second case as well. He said he hopes both parties can put aside their differences and return to a more collegial relationship.
In the court decision denying the cooperative's challenge, Judge Perez pointed out that the Renville County plant is the largest sugar beet facility in the U.S. in terms of the total volume of beets it processes. He described the facility as "among the most modern and efficient sugar beet processing" facilities in the country.
The plant was originally constructed in 1973-74 but has seen substantial upgrades in recent years. In 1990 a molasses refinery was added. In 1998 through 2001 the cooperative invested approximately $103 million in plant and equipment improvements, according to the court's finding of facts.
Legal counsel and the parties involved in the lawsuit toured the sugar plant on May 15 and final arguments were presented to the court on Oct. 30. The court ordered its judgment stayed for 15 days after its Dec. 22 filing date.
