NAPOLEONVILLE — Seven companies operating on the Napoleonville Dome in Assumption Parish must pay a combined $15.6 million in property taxes and penalties under protest by early next week while they fight tax bills in court, a state district judge ruled Tuesday.
The ruling is an early skirmish in a bigger legal fight over whether unreported salt dome caverns in Assumption Parish should be assessed as land or commercial improvements but halts a bid by the salt dome companies to delay upfront payment of the sizeable tax bills for nearly 10 months.
The bigger, unsettled legal question has a significant impact on how much tax the companies will pay annually to the parish Police Jury and other government entities in Assumption.
Parish Assessor Wayne “Cat” Blanchard uncovered tens of millions of dollars in unreported salt dome caverns and other infrastructure last year after news accounts about the Bayou Corne-area sinkhole brought the salt dome operations to light.
For commercial improvements, companies are relied upon in Louisiana to report their assets voluntarily.
After hiring a special auditing firm, Blanchard has said, he documented dozens of salt dome caverns that went unreported for years. In other cases, assets for salt dome companies were reported but under valued.
Dow Hydrocarbons Resources, Bridgeline Storage Co. and other companies have been fighting the assessments at the Louisiana Tax Commission and sued Blanchard and Sheriff Mike Waguespack late last year in 23rd Judicial District, alleging the assessments were improper.
The taxes in dispute are beyond what the salt dome operators — many of which are the largest taxpayers in the parish — normally pay and came through a special procedure known as a supplemental assessment.
Waguespack is trying to collect taxes and 10 percent penalties for four years, 2010 to 2013.
In the ruling Tuesday at the Assumption Parish Courthouse, Judge Guy Holdridge ratified an agreement proposed by attorney Cheryl Kornick, representing salt dome operators: the companies would pay the taxes under protest if the sheriff would agree to hold the taxes in escrow.
Kornick told the judge that her clients were concerned about paying under protest without the commitment.
“Because if we pay this money and the sheriff disperses it, we are without any remedy, no ability to get it back, and that’s the problem,” she said.
Waguespack, who had already made that commitment during a Tax Commission hearing earlier this month, did so again Tuesday through his attorney, Mary Olive Pierson.
“The short answer is the sheriff is going to do exactly what you’ve asked him to do, and we’ve already said that on the record at the Tax Commission,” Pierson told the judge.
This time, the commitment comes with the backing of a judge’s order.
Kornick brought up the offer to pay the taxes after Holdridge opened up the hearing Tuesday in a pointed discussion with her over the companies’ separate push to delay payment until Dec. 31.
One of the companies, Occidental Chemical Corp., had paid taxes under protest, but Dow, Bridgeline and other companies had filed suit Feb. 12 seeking the delay.
Two days earlier, on Feb. 10, Waguespack and Blanchard successfully got the state District Court in Assumption Parish to halt proceedings before the Tax Commission, which was reviewing assessments tied to the bills.
Waguespack sent out the bills Jan. 20 and had given the companies 30 days to pay after receiving the bills, roughly Friday or Monday, attorneys said.
Holdridge asked Kornick on Tuesday whether the sheriff could set a date that the taxes were due for a supplemental assessment or must he wait until the end of the year when normal property tax bills are due.
Kornick contended the sheriff should wait, arguing the law does not distinguish between annual tax bills and supplemental tax bills as far as the due date.
Holdridge then countered with the example of a business that intentionally does not pay taxes when they are due.
“Is that your legal argument that, hypothetically, that it’s better not to pay taxes because then you always will get an additional year to pay taxes because all taxes are always going to be due at the end of the year?” he asked.
Kornick backed off the push for a delay and sought the commitment from Waguespack to hold the money in escrow. With the ruling, Kornick promised another round of suits as part of the tax protest.
Under the tax bills, Dow owes the most, $9.3 million over the four-year period. The company has a large cavern complex near Grand Bayou but left 32 wells and 26 caverns unreported, bills say.
Bridgeline, which is part of Chevron Pipe Line Co., owes the next most, $2.3 million for the four-year period for a large gas storage cavern, tax bills say.