ND companies protest coal taxBISMARCK, N.D. (AP) — Two electric utilities have paid almost $5.2 million in coal taxes under protest, arguing they won't owe the money if North Dakota voters decide to abolish property taxes in the state.
By: DALE WETZEL, Associated Press
BISMARCK, N.D. (AP) — Two electric utilities have paid almost $5.2 million in coal taxes under protest, arguing they won't owe the money if North Dakota voters decide to abolish property taxes in the state.
Basin Electric Power Cooperative, of Bismarck, and Minnkota Power Cooperative, which is based in Grand Forks, are challenging whether they owe a "coal conversion" tax.
The monthly tax is assessed according to how much power is produced by power stations that Basin and Minnkota operate in western North Dakota's coal country.
The tax is also applied to Basin's Great Plains Synfuels Plant, which is the only commercial-scale factory in the country that converts coal to synthetic natural gas.
The coal conversion tax is a type of property tax. Next month, North Dakotans will vote on a proposed constitutional amendment that would abolish property taxes. The amendment specifies that if voters approve the change, it will be retroactive to Jan. 1.
Spokesmen for Basin Electric and Minnkota told The Associated Press on Tuesday that by protesting their tax payments, it should make it easier for them to recoup the money if the constitutional amendment is approved.
Both Basin and Minnkota have been paying their coal conversion taxes under protest since January, the state Tax Department said. Neither company announced it was doing so, and spokesmen for the companies said they initially had not been aware of the strategy.
The $5.2 million paid by Basin Electric and Minnkota Power represents taxes owed for January, February and March. During the state's last complete budget year, companies paid $23.1 million in coal conversion taxes.
Great River Energy and Montana-Dakota Utilities Co., both of which also own stakes in power plants in western North Dakota, have not protested their tax payments. They have paid $1.1 million in coal conversion taxes since January, Tax Department records show.
"Currently, this is a valid tax, and we're paying it. That is what it comes down to," said Lyndon Anderson, a Great River Energy spokesman.
Gary Spielman, Minnkota's vice president for finance and administration, called the tax protest "pre-emptive" and necessary given what may happen if North Dakota voters agree to abolish property taxes.
"This is not an effort to say Measure 2 is right or wrong," Spielman said. "But the current taxing system is working, and we have concerns that Measure 2 might upset that status."
Copyright 2012 The Associated Press.