By Wayne Allen
On Sept. 15, the Supreme Court of Ohio is scheduled to hear a case involving the Pike County Auditor and its efforts to collect $23 million in back taxes from Lockheed Martin Energy Solutions.
Lockheed Martin Energy Solutions is a former United States Department of Energy Contractor involved with the former Portsmouth Gaseous Diffusion Plant in Piketon.
“It is the position of the Pike County Auditor and Pike County (Government) that the Ohio personal property tax should have been applied to the property that was being used by the contractor (Lockheed Martin Energy Solutions) at the Portsmouth Gaseous Diffusion Plant,” said Kevin Shoemaker, the Attorney representing the Pike County Auditor.
He said personal property taxes should have been applied over the years Lockheed Martin Energy Solutions used the property on the DOE Reservation.
“The property was owned by the federal government, but it was used by the operators to do business,” Shoemaker said.
He said the Pike County Auditor had attempted to get clarification from the state on this issue with no resolve.
“Essentially everybody kind of ignored the issue. In about 2011, they (Pike County Auditor) got some traction with a department that took a look at the issue, saying to Lockheed Martin, we think taxes could be due back into the 1950s,” Shoemaker said.
Shoemaker said the case currently before the Ohio Supreme Court is only looking at one year — 1993 — of personal property. He said the way Ohio’s Personal Property Tax works, “if you’re have personal property within your taxing district, it would apply.”
If the Pike County Auditor is successful in recovering personal property taxes, Shoemaker said portions of it would go to any agency that had a tax levy at the time, such as a school district, township and city to name a few.
“We’ve determined the value could be $23 million dollars for the one year,” Shoemaker said.
He said the situation has been through various legal bodies, before it was taken to the Ohio Supreme Court.
Shoemaker said the Auditor of Pike County filed an assessment for 1993 tax year and later filed for all of the other years. He said the reason 1993 was selected was because they had a clear number as to what the acquisition costs or personal property was for that particular year.
Once the auditor filed an assessment, Shoemaker said Lockheed Martin Energy Solutions filed an appeal to the Ohio Tax Commissioner.
“The tax commissioner ruled against the auditor and we then appealed it to the state board of tax appeals,” Shoemaker said. “The board of tax appeals ruled against us (Pike County Auditor) and even though Lockheed Martin Energy Solutions won, they appealed to the Ohio Supreme Court.”
Shoemaker said the auditor would have had the right to take the case before the Fourth District Court of Appeals after the board of tax appeals. He said when you look at the details of the contract between Lockheed Martin Energy Solutions; the federal government would be responsible for paying the taxes.
“All of the operators at the facility (DOE Reservation) sign an agreement with the Department of Energy. As a part of the agreement the Department of Energy agreed they would indemnify them of any state or local taxes they would have to pay. This was a cost plus contract, all of the costs were paid by the federal government,” Shoemaker said. “Theoretically the federal government should be the ones paying these taxes.”
Shoemaker said once the case is heard by the Ohio Supreme Court, they could make a ruling or refer it to the Fourth District Court of Appeals for a ruling.
Wayne Allen can be reached at 740-353-3101, ext. 1933 or on Twitter @WayneallenPDT