It's about principle, not money — that's how officials from 28 counties explain why they have appealed a Utah State Tax Commission ruling to the Utah Supreme Court.

A hearing is scheduled Monday on the appeal of a tax settlement the commission struck with the electric utility PacifiCorp.

The settlement, county officials say, could set a dangerous precedent for giving special treatment to Utah's large corporations in paying property taxes. Tax officials maintain they were making a simple correction.

The state assesses and taxes the property of businesses that cross county lines, such as utilities, airlines and transportation companies.

When the Tax Commission discovered that PacifiCorp submitted incomplete numbers regarding the taxable value of its property for the company's 1999 taxes, the state's Property Tax Division, which handles property taxes for utilities, decided to take a closer look. It subsequently discovered that PacifiCorp had overdeducted its deferred federal income taxes each year from 1996 to 2000, resulting in "escaped" property value that was not taxed.

But that didn't result in PacifiCorp's tax bill going up. Instead, the tax owed went down, and that's when counties cried foul. The difference is not a huge amount of money, somewhere around $700,000 for various types of property located throughout the state, including substations, transmission stations and offices.

But it's not about the money, "it's about principle," said Salt Lake County Chief Civil Deputy District Attorney Carl Hendrickson. Hendrickson said had an individual citizen been caught overdeducting something on his taxes, he would have been penalized.

Instead, Hendrickson said the Tax Commission made a "tortured reading" of state tax law in order to allow PacifiCorp to skate by.

There were some other questionable issues as well. By law, PacifiCorp is required to submit an annual report to the Public Service Commission. In 1999, PacifiCorp failed to include a copy of that annual report to the Tax Commission. Hendrickson said counties discovered that PacifiCorp reported two sets of different numbers to the PSC and to the Tax Commission.

"The principle is that you shouldn't be able to maintain that one number is for Public Service (Commission) purposes and that another number is for property tax purposes," he said.

State Tax Commission spokeswoman Jodi Monaco said the commission would only refer to its 34-page legal brief submitted to the court as comment. When contacted, a PacifiCorp representative said the corporation's policy is not to comment on active litigation.

According to its brief, the commission actually corrected PacifiCorp's taxes when it reduced the property value. The commission says its property tax division improperly valued the utility's property, but when a previously upheld tax method was used, PacifiCorp's property value actually dropped.