Duchesne County commissioners are considering going after hundreds of thousands of dollars worth of "escaped property" owned by local oil and gas companies but not listed on tax rolls.
County commissioners aren't saying that oil and gas companies are intentionally cheating the county out of preperty tax revenue, but they say because of the way the reporting system is set up there's a lot of "lag time" and often improvements or the addition of new equipment may never end up on the tax rolls."It's not really the oil companies' fault," said Commissioner Clint Peatross. "They report to the Division of Oil, Gas and Mining who then report to the Tax Commission. There's a lot of lag time and changes are made. It's not intentional. It's something that's impossible for the Tax Commission to keep up with."
He said much like the oil and gas companies that petitioned the Tax Commission late last year to accept a more equitable but less costly formula for assessing their property, the county "just wants to make sure we're getting our fair shake."
"We're not singling out any one company. They wanted to be treated fair on the new Discount Cash Flow method of property tax assessment, and we just want what's fair. We feel it's our responsiblity to have someone take a look at this."
Duchesne and four other major oil- and gas-producing counties in Utah expect to lose millions of dollars in property tax revenue due to the implementation of a discounted cash flow method to the state now uses to assign value to oil and gas related property.
In addition, the counties will have to pay out thousands of dollars in back tax appeals to oil and gas companies who say they've been overassessed for the past five years.
While no specific figures have been set, commissioners believe Duchesne County could recover hundreds of thousands of dollars in property tax revenue that is being lost because of unknown status, changes at certain wells and improvements such as the addition of tanks, batteries and transfer pipe.
The whole idea of tracking down oil and gas companies with holdings not on the tax rolls surfaced last month when former State Tax Commission employee Arlo Faucett approached the commission contending there were millions of dollars in "escaped property" statewide that has never been assessed that should be bringing in revenue for the counties.
Faucett proposed going after the unknown property. His payment? Half of everything he would be able to bring to county coffers. While commissioners say they like the idea, they don't like the thought of losing 50 percent of the tax revenue that belongs to the county.
Peatross says they've asked Joe Kemp, of Mountain Home, to submit a proposal to track down escaped property. Kemp has worked as a trouble-shooter and consultant for oil companies. Other area residents with knowledge of Duchesne County's oil and gas industry will also be asked about submitting proposals.