Nov. 21, 2002 – In its waning days, the 24th Legislature is being asked to enact a bill submitted by the governor to base commercial property taxes for last year, this year and next year on the government's 2000 assessments of property values.
Gov. Charles W. Turnbull is proposing to do this by way of an amendment to the V.I. Code. The bill also provides that the next assessment of commercial properties will take place in 2004.
In August, the governor signed a bill making property tax assessments an every-other-year ritual rather than a yearly one.
Tax Assessor Roy Martin said in September that his office would have to reassess all commercial property because of District Judge Thomas K. Moore's August ruling upholding the claim of some 25 commercial property owners that their properties were overvalued. (See "Commercial property taxes on hold for a few".)
Moore ruled that the plaintiffs did not have to meet the V.I. government's Aug. 30 deadline for paying commercial property taxes, pending the receipt of their tax bills and the court's determination of whether those bills were proper.
Martin said in September that his office was working on the reappraisals, to apply to 2002 taxes. As for the 2001 taxes, he said then that "it hasn't been decided" what commercial property owners would pay, or when.
According to a Wednesday release, Turnbull said in a letter to Senate President Almando "Rocky" Liburd concerning the new assessment proposal that "no 2001 commercial real property tax bills have been issued by the tax assessor" because of court-related actions that have "prohibited the government from issuing tax bills until such time as the tax assessor develops and correctly implements uniform appraisal standards."
Replacement value assessment triggered challenges
At issue in the initial court case, brought in 2000 by Gary Berne of Berne Corp., and others that have come before the District Court since, is the V.I. government's practice of assessing property on the basis of replacement value rather than market value. Taxes are calculated as a percentage of assessed value. The V.I. Code gives nine criteria to be considered in making assessments; replacement value is not among them.
Berne said the average independent appraisal done on his Charlotte Amalie property valued it at $1.3 million, while the government assessed it at $6 million.
Equivest St. Thomas Inc., which owns Bluebeard's Castle, Bluebeard's Beach Club and the Elysian Beach Resort, also went to court over its 2000 property assessment of $98.4 million. The combined properties had been appraised independently in 1999 for $38.2 million and actually sold that year for $22.5 million. Moore ruled largely in favor of Equivest.
In July, Martin told the Senate Finance Committee at a Fiscal Year 2003 budget hearing that the Tax Assessor's Office was in "serious trouble" because the December 2000 settlement of the Berne case had set precedent for other litigants to follow. In the settlement, the parties agreed to have the District Court name an independent "special master" to review the procedures and process of commercial property assessment. (See "Berne tax assessment case settled".)
Under the mandate, Martin said at the July hearing, the special master must see that the Tax Assessor's Office meets certain requirements before it can appraise commercial properties. He said the terms of the settlement were sealed and have not been made public — and that another 10 cases were pending.
Amendment seen as compatible with settlement
Turnbull said of his proposed amendment to the V.I. Code this week that "the attorney general is of the opinion that with this change in the law, there would be no violation of the current settlement agreement, and the government would still be able to continue with the process of sending out corrected commercial real property tax bills until such time as new appraisal guidelines are implemented."
He told Liburd, "Members of the Tax Assessor's Office and the Department of Justice are available to further explain the need for this special legislation."
Martin said at the budget hearing in July that there are about 1,500 commercial property owners in the territory. Commercial property tax revenues on the basis of replacement value assessment would have been between $9 million and $10 million this year, he said, but under the court order, they could be $7 million.
Meanwhile, payment of 2001 residential tax bills is due on Nov. 30, and any appeals must be filed by Dec. l5, according to a Sept. 30 Government House release. By law, residential tax bills are due out in June, but by August of this year some for 2001 still had not been issued, and the governor changed the due date by executive order.
According to Martin, there are about 34,000 residential property taxpayers.
In the Fiscal Year 2003 budget, the administration projected property tax revenues of $62.4 million. In FY 2001, it collected $50.7 million.

Publisher's note : Like the St. Thomas Source now? Find out how you can love us twice as much — and show your support for the islands' free and independent news voice … click here.


Please enter your comment!
Please enter your name here