The Tooele County Commission settled a dispute with the county’s largest property taxpayer last week, resulting in a 62.5 percent reduction on the landowner’s 2017 tax bill.
The lower value will require taxing entities to refund a portion of ATI’s tax payment and may lead to an increase for the rest of Tooele County’s property taxpayers.
Allegheny Technologies Incorporated appealed its 2017 property tax assessment of $160,113,610 for its titanium plant at Rowley to the Utah State Tax Commission. The county commission approved a stipulated agreement at its Aug. 7 meeting, similar to an out of court settlement, that reduced ATI’s assessment to $60 million for 2017.
“We’ve been in a very tense negotiation with them,” said Jake Parkinson, commercial appraiser with the Tooele County Assessor’s Office. “They’ve appealed their value trying to lower their tax to a very small number, which we have tried to hold the line because when those numbers shift, basically they shift to the taxpayers.”
The county tried to hold the line on ATI’s appeal, contracting with outside legal counsel and hiring outside appraisers, according to Parkinson.
“A titanium plant isn’t like a home,” Parkinson said. “It takes specialized appraisers. There’s probably 15 appraisers in the United States that are qualified to appraise a titanium plant. There’s only two titanium plants in the United States.”
In addition to setting the assessed value for ATI’s Rowley titanium plant for 2017, the stipulated agreement also sets the 2018 value at $50 million and the 2019 value at $45 million.
ATI already paid $2,166,497 in property tax for 2017. With the reduction in value for 2017, ATI’s tax liability for 2017 will drop to around $812,000.
The taxing entities that receive property tax from ATI’s Rowley plant include Tooele County’s general fund and municipal services fund, the Tooele County School District, the Tooele Valley Mosquito Abatement District, and the North Tooele Fire District.
State law requires the taxing entities to refund a portion of ATI’s 2017 property tax, based on the new value, according to Tooele County Treasurer Mike Jensen.
Those refunds will total approximately $1,355,000.
Preliminary calculations show the Tooele County School District will owe ATI approximately $913,000. Tooele County will owe ATI $210,000 from the general fund and $127,000 from the municipal services fund. The North Tooele Fire District and the Tooele Valley Mosquito Abatement District will owe ATI $70,000 and $34,000, respectively.
Each taxing entity’s governing body may choose to adopt a one-time judgment recovery property tax levy to recoup their loss, according to Jensen.
Adopting a judgment levy would require a truth in taxation hearing, Jensen said.
ATI opened its Rowley titanium plant in 2009. Due to a property tax incentive, the company received a property tax refund of about 90 percent. That incentive had a cap on the total amount of the refund. The cap was reached in 2016.
ATI stopped production of titanium at Rowley at the end of 2016, claiming changes in the world titanium market made it less expensive to buy titanium on the open market than to produce it themselves.
Previously, ATI appealed its 2016 assessed value of the titanium plant to the Utah State Tax Commission. In April 2018 the Tooele County Commission approved an agreement with ATI that lowered the 2016 valuation of the titanium plant by $25 million.