Alliant tax refund overruled

The Utah Supreme Court has ruled that a $5 million tax refund given to Alliant Techsystems Inc. by the former Salt Lake County Commission was unconstitutional.

In its ruling issued Friday, the high court found that the commission, acting as the Salt Lake County Board of Equalization, violated "fundamental constitutional and statutory provisions governing tax law in Utah," when it bypassed Salt Lake County Assessor Lee Gardner's tax evaluation of Alliant for a special deal of its own.

Gardner has long argued against the settlement, to the point that he hired his own attorney to argue his case before the court — he was prepared to pay the attorney out of his own pocket, if necessary.

The County Commission, which reached the settlement with Alliant, excluded Gardner from most of the negotiations with Alliant, so Friday's court decision is sweet vindication for the assessor.

"The taxpayers won," Gardner said. "You're not going to see those unfair shifts from one taxpayer to another . . . It doesn't necessarily preclude settlements, but if you go through a settlement it has to be based on fair market value."

The conflict stemmed from Alliant's contest of the property value of its facility from 1995 to 1999. Alliant said that a portion of its property was used by the U.S. Navy to monitor the company's operations and the property was therefore exempt from property tax due to government use. Alliant appealed Gardner's valuation to the county board of equalization and the case wound up in court.

As an elected official himself, Gardner said he was barred from attending settlement discussions between Alliant and county commissioners.

In March 2001, the state Tax Commission rejected the county's deal, saying the decision was not based on any established fair market value on the land.

A district court judge, however, upheld the county's deal and allowed the agreement to proceed.

In Friday's ruling, the Supreme Court overturned the District Court's ruling, noting that the deal was indeed not based on a fair market value and is therefore unenforceable.

The decision ensures that Gardner will be able to examine and possibly appeal any agreements the Board of Equalization reaches with taxpayers in the future, since they will have to be based on fair market value.

The county will now have to revisit its agreement and strike a deal with Alliant based on specific property values.

Gardner said the decision also supports his authority as an elected official.

"The checks and balances remain in place. The Board of Equalization is a check on the assessor, and I'm a check on the Board of Equalization," he said.

Granite School District and local government entities were among those who lost tax revenue in the deal with Alliant.

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E-mail: gfattah@desnews.com; aedwards@desnews.com