PacifiCorp wins property tax ruling

The Utah Supreme Court on Tuesday ruled against 28 Utah counties seeking about $700,000 in reduced property tax from PacifiCorp, saying the state's property tax division waited too long to act.

At issue was whether PacifiCorp, which operates as Utah Power in Utah and Idaho, was fairly taxed from 1996 to 2000 after the state's property tax division discovered PacifiCorp had furnished erroneous federal income tax deductions for those years. The counties had also taken issue with the Utah Tax Commission, which allowed a different taxation method and reduced the overall property value, eliminating most of the "escaped property" taxes owed.

The court ruled the counties could not use an "equitable tolling" principal to prolong the time period during which the tax division could issue an additional assessment.

"We vacate the escaped property tax as untimely and therefore void, and dismiss all other issues arising out of the commission's order as moot," Associate Chief Justice Michael Wilkins said, writing for the court.

Margaret Oler, spokeswoman for Utah Power, said "Utah Power is pleased with today's Supreme Court decision," which brought closure to a lengthy appeals process.

David Scofield, attorney for the counties, could not be reached for immediate comment. Attorneys for Utah, Davis and Tooele counties had not read the decision and had no comment. State Tax Commission officials who could be immediately reached also had not read the decision and had no comment.

The counties had argued that the "look-back time" started when the property tax division first learned about the escaped property on July 18, 2000. The Tax Commission had decided to equitably toll the limitations period in the interests of the counties.

In writing for the court, Wilkins said the Tax Commission acted improperly in using "equitable tolling" to extend the limitations period.

Wilkins wrote that under "traditional principals," the party seeking equitable tolling must first show he was "disabled, usually through a defect of knowledge for which he could not be held responsible."

Wilkins noted that the errors came to light in 2000 — two years before the look-back period expired.

"There is no dispute that the division was aware of the facts underlying the tax claim against PacifiCorp two years before the look-back period expired," Wilkins wrote. "The counties cannot argue that the division's failure to assert its right to issue the assessment arose from an excusable defect of knowledge of the underlying claim."

In a separate concurring opinion, Chief Justice Christine Durham wrote that the equitable tolling principals shouldn't be based solely on discovery.

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