Summit County plans to appeal tax ruling
Siding with the private Summit Water Distribution Company, a judge in Third District Court ruled against Summit County in a long-running dispute about taxes.
But the Summit County Attorney’s Office will likely appeal the ruling in the Utah Supreme Court.
"The court decisions have left more questions than it answered," said David Thomas, the county’s chief civil attorney. "If the question is, if it’s personal property of the person who put it in, they are to pay taxes on it."
At issue was whether Summit Water should be taxed for personal property for infrastructure the private water company develops in the Snyderville Basin.
"Ultimately, the county is still going to get its money," Thomas said.
Summit Water attorneys argue that items like water rights, pipes, storage tanks and water shares constitute improvements to real property under state law, a decision issued by Judge L.A. Dever states.
County officials, however, counter that personal property includes "gas and water mains and pipes laid in roads, streets or alleys."
"Clearly, [Summit Water’s] facilities are included in the meaning of the terms ‘improvement’ and therefore, cannot lie within the definition of personal property," the judge stated in ruling against the county.
The decision could make homeowners responsible for paying property taxes on utility infrastructure that crosses their land, Thomas said, adding, "Who owns the infrastructure?"
"This has greater implications If they have to pay for it, do they own it?" he asked. "The law before this case was always thought to be fairly clear. This court decision fundamentally changes that."
Meanwhile, the judge considered with his ruling whether Summit Water’s system qualified for the state’s irrigation-tax exemptions.
"First, [Summit Water] provides irrigation water to its shareholders, although it provides culinary water as well," last month’s ruling states.
Because Summit Water distributes drinking water, though, the corporation doesn’t qualify for tax breaks reserved for irrigators, county attorneys contend.
Delivering water for irrigating landscaping qualifies Summit Water for the exemptions, the court ruled.
This week Summit County Assessor Barbara Kresser said she was "bewildered" by the judge’s ruling.
"There are 29 assessors who are going to be up in arms about this," she said. "All of the standards and rules and laws that we have used to assess property we’re now unsure of their validity."
According to Thomas, "this affects the way everybody assesses utilities throughout the state and Summit Water is just another utility."
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