And in Utah County, the bite could be as much as $2 million out of the pocketbooks of local taxing entities.The money is needed to pay tax refunds to centrally assessed properties. Mainly utility companies, the centrally assessed properties sued the Utah State Tax Commission claiming they were unfairly taxed for the past 10 years.
A settlement was reached requiring taxing entities to refund to utility companies a portion of past tax payments. The Tax Commission is allowing entities to impose a judgment levy to raise revenue for the refund. The money will mostly come from homeowners.
Jim Sutherland, deputy county auditor, said Thursday that taxing entities throughout Utah County could suffer as much as a $2 million hit.
Utah County alone is facing the prospect of having to refund $290,000.
"It affects every entity, and we're not the only county looking at this," Sutherland said.
Nebo, Alpine and Provo school districts are in the same boat as the county. They also need to find money to repay past tax collections to centrally assessed properties, and most plan to use the judgment levy. However, some of the money might have to come from budget cuts.
"We'll need to open up the budgets and see where we can pull the money back out," Sutherland told county commissioners Tuesday.
He said last year the county taxing entities paid back between $700,000 and $800,000.
"Some big ones are being resolved at this point," he said, referring to US WEST's claim of unfair taxation.
"I would hope they (the State Tax Commission) would come up with another solution than refunding, maybe an escrow or something."
Sutherland said the situation is creating confusion and a sense of limbo for his office and cities and counties around the state.
"I'm still not sure I understand it. We've never had anything like this."
As it is, Utah County cannot move forward and finalize valuation notices - due out July 22 - or set the certified tax rate.
"Even without this refunding situation, we can't go ahead because we don't have the information we need," he said. "It's frustrating."
If notices are late, hearings for the public to protest valuations before the Board of Equalization will be pushed back and deadlines for payment will be missed. Delays backlog the system and trigger a number of headaches for the county and for taxpayers, Sutherland said.