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Minn. high court reverses Renville sugar plant tax ruling

OLIVIA -- The Southern Minnesota Beet Sugar Cooperative has won a partial victory in its appeal of its tax assessment in Renville County, but it may not translate into any significant tax reduction.

In a ruling released Friday, the Minnesota Supreme Court reversed a tax court decision that upheld Renville County's assessment of the beet sugar facility at more than $20 million.

The Supreme Court remanded the case to the Eighth Judicial Tax Court. It instructed the tax court that it was free to either revise or maintain the valuation, but that it needed to show its reasoning for it.

Based on the Supreme Court ruling, Renville County does not anticipate any significant changes in the valuation, according to Glen Jacobsen, assistant county attorney for Renville County.

While the high court agreed to reverse the tax court, it upheld the portions of the case that speak to how the county valued the sugar cooperative's property for taxing purposes, he explained. The high court agreed with the county and the tax court that 30 tanks, bins, and silos on the property are taxable as real property.

The high court also supported the county and tax court's decision that the sugar facility should be valued as a "special use'' facility.

The decision, authored by Justice Lorie Skjerven Gildea, also spelled out a three-step process that courts should use when determining whether property like bins, silos and tanks should be considered as real or taxable property.

The county based its approach on this three-step process.

Essentially, the court upheld the most important factors in how the county valued the property, Jacobsen noted.

The sugar cooperative had argued that the 30 tanks, bins and silos should be treated the same as manufacturing equipment for taxing purposes. Also, it sought to have the plant valued as if the property was no different than any other type of industrial or ag processing plant.

Based on that, private assessors hired by the company valued the sugar company's plant and land for taxing purposes at $7.5 million, as compared to the $20 million valuation placed on it by the county.

The tax court had rejected the conflicting values offered by private appraisers on behalf of both the cooperative and county. It accepted the county's valuation for taxing purposes as the default, but it did so without offering an explanation.

County Attorney David Torgelson told the Renville County Board of Commissioners on Tuesday that the tax court will determine the next step in this process. He said the court could decide to keep or change its valuation based on the evidence already submitted in the case, or hold another hearing and accept more evidence.

Either way, final resolution of the matter is still some time away, he said.

The case pertains to taxes paid by the beet sugar cooperative in 2004 and 2005. Jacobsen said the company has previously filed petitions challenging the taxes payable in 2006, 2007 and 2008.

The petition for taxes payable in 2006 was filed in tax court. The petitions for the taxes payable in 2007 and 2008 were filed in District Court, and assigned to District Court Judge Bruce Christopherson.

Attorney James Gilbert, former associate justice of the Supreme Court who represented the sugar cooperative, did not return a phone call seeking comment. The county was represented by attorney Marc Mandersheid of the Briggs and Morton law firm.