AT&T successfully appeals cell tower tax appraisals
Local governments forced to refund tax revenue
BY LELAND ACKER

A recent sell out involving AT&T and Cingular Wireless resulted in paperwork errors and value disputes on the part of AT&T, which led to several local governments having to refund AT&T thousands of dollars in tax revenue.

Lee Flowers, chief appraiser of the Cherokee County Appraisal District (CCAD), said the refunds were a result of a legal settlement between several appraisal districts, appraisal companies and AT&T.

"I felt it was prudent to follow the advice of Capital Appraisal Group (whom the CCAD had contracted to appraise the cell phone antennas) and our law firm to settle the suit," Mr. Flowers said. "It would have cost more to prosecute the case and we still would have wound up on the short end of the stick."

The suit, which involved more than 43 appraisal districts statewide, came as AT&T reported (in a process known as "rendering") owning antennas and tower equipment they had sold to East Texas Cellular and disputed the value of the antennas they still owned.

Mr. Flowers said AT&T rendered the number of antennas they owned and later submitted an affidavit to the appraisal district which secured their right to take the case to district court.

AT&T protested their tax statements, claiming many of the antennas they were taxed for had been sold.

"We're behind the eight-ball here," Mr. Flowers said. He explained even though AT&T rendered having owned the antennas in question, that rendition was inadmissible in a court of law, thus leaving the CCAD and 42 other appraisal districts without defense.

"The law allows this to take place," he said. "This is not a failure of CCAD, Capital Appraisal Group, or our law firm. It is a failure of the rendition system in the State of Texas."

The rendition system is the method appraisal districts use for determining the value of commercial property. Businesses and commercial entities report, or "render" an inventory of property they own in that county. That document is known as a "rendition."

The appraisal district appraises the property and assesses a taxable value to it. The local governments use that value to set a tax rate and the CCAD sends the property owner a tax statement.

Recent legislation has strengthened rendition requirements by assessing penalties for businesses who fail to file a rendition.

However, with those renditions being inadmissible in court, problems like the one with the cell phone antennas can arise.

"We depend heavily on what is rendered," Mr. Flowers said. "When that is inaccurate, it causes big problems."

The problem for Cherokee County is that the tax rolls have lost $1.8 million in appraised property value due to the settlement between the CCAD and AT&T.

Taxes collected on that property must be refunded, which the Alto ISD Board of Trustees learned in November.

Alto ISD will have to refund $4,468.53 as a result of the settlement.

"It's a pretty tough pill to swallow," Dr. Ray DeSpain, superintendent of Alto ISD said. "We have to abide by the court decision. We don't have a lot of choice on this."

Dr. DeSpain said the school district would likely move money around to cover any shortfall in the budget.

The Cherokee County Commissioners Court had to refund approximately $10,000 in tax revenue due to the settlement.

"It shouldn't cause major problems," said County Judge Chris Davis. "We will get a lot of this back. You lose some money like this and you lose some money from people not paying their taxes. We have a buffer in our budget to account for stuff like this."

Mr. Flowers said East Texas Cellular, who now owns the antennas and equipment, will be sent a notice of the antennas' appraised value.

He said East Texas Cellular will have 30 days to appeal, either stating that they do not own the antennas or that the antennas are not as valuable as they are appraised.

After 30 days have expired, East Texas Cellular will be given a tax bill.

Mr. Flowers emphasized that the situation was not the fault of the CCAD or its contractors, but of the rendition system in Texas.

"No one has to work with us, but everyone expects us to do our job," Mr. Flowers said. "We have four people and 67,000 pieces of property. Our job is a very big job to do with limited resources."