Madison County may take a hit in its tax rolls, and face having to refund $85,000 or more in collected taxes, after a recent court ruling by the Texas Supreme Court regarding the definition of leased property.
Madison County Appraisal District’s Matt Newton informed the Commissioners’ Court on Monday that certain heavy equipment, particularly compressors, will be taxed at a lower rate because of the ruling.
Businesses pay personal property taxes on items; leased equipment, such as bulldozers, backhoes and the like fall under a special inventory category and is taxed less, Newton said.
However, things like compressors, mostly used by oil companies, were considered as special inventory; however, appraisal districts across the state sued as they thought the designation was wrong, he said.
In 2014, a court agreed, so the compressors in Madison County were added to the tax rolls, Newton said. However, the decision was reversed on appeal, and about two weeks ago the Supreme Court backed the appellate court.
That means that compressors, if set up in a lease fashion with a company, will be taxed at the lower rate, Newton said.
“Over the course of the years during this litigation, we have about three companies that could … get a refund amount of about $85,000,” he said.
Newton said that he won’t instigate a refund, but will wait for the attorneys involved to decide the next step.
“This is going to have implications across the state, more than it will here,” he said. “West Texas, Fort Worth, Galveston — there’s a lot of money in these (compressors). It’s not just the counties losing, but the school districts as well.”
In other business, the county:
•approved a contract with CHI St. Joseph Health Madison Hospital to retain a service coordinator and office manager for the Madison Health Resource Center and Senior Meals; and
•approved $5,000 from the Madison County Hotel-Motel Tax Fund for advertising for the Texas Mushroom Festival.