Danville schools may have to reimburse taxes – again
The Danville Independent School District may be forced to repay a second corporation who claims it paid too much in tangible personal property taxes because of its own tax filing error. The total could be close to $300,000 that the district will have to pay back.
Corning Corporation recently sent a letter to the Boyle County PVA office and the school district stating that their case is “in protest” at the Kentucky Department of Revenue, according to PVA administrator Lacresha Gibson during a recent school board meeting.
“Because of their error, it’s going to cost Danville schools $200,000 to $300,000,” said board chair Steve Becker. “That would be salaries for five teachers.”
The district is still reimbursing Wasau Paper for property taxes it over paid because Wausau had wrongly classified its inventory as tangible property and paid taxes on it. Because the inventory turns over quickly — about every six months — it’s not considered taxable property. The school district was required by law to refund the overpaid taxes from 2014, ’15 and ’16 — for a total of $424,600. A plan was agreed upon and Danville will make its final payment to Wasau in July of 2022.
Gibson read from Corning’s letter which stated, “The location was originally purchased with plans to renovate and develop the property into a manufacturing facility. However, plans to develop the site were abandoned in 2014. … The financial records included capital projects for building and the 2016 and 2017 returns were filed by recording the costs” on the wrong line as “construction work in progress.”
“Additionally, 2017 reported $25 million was erroneously carried forward when filing the 2018 return and therefore was overstated.”
Gibson said, “They’re not even trying to say they’re not there. They’re just strictly saying, they erroneously listed it. … I think they just literally said they carried it over, they rubber stamped it.”
She added, “They pretty much filed their returns and just kept doing it previous year, previous year, previous year, just signing their name to it. They didn’t really know what they were signing it sounds to me. … What they have done, in my opinion, they have rubber stamped a figure that may not be correct. That is why they are in protest with the Department of Revenue.”
Gibson told the board, “It’s a huge impact if it ruled that they are allowed to do what they want to do.”
Board Chair Steve Becker said, “With the mood of the state as it’s been in, they always side with the corporations and we have no decision. We have no right to a decision concerning this. … It’s all dictated by the revenue department. … I don’t even think we have a right to sue.”
Becker added, “All of a sudden they have this awakening that they’re paying way to much money in taxes. They’re the ones that filled out the forms based on information they have. And now, all of a sudden that’s a loser property for them … so they want to recoup several hundred thousands of dollars from our school district. I just want to let the rest of the board know we’re in a no win situation here. … They’re (Department of Revenue) probably going to side with Corning. Their decisions are based upon jobs.” He said if the revenue department didn’t side with Corning, “they may decide to do something else with their operations.”
“I do look at it as they made the mistake, we didn’t. But guess who gets to pay for it? And it’s not just the Danville schools, it’s the library, it’s the fire department, it’s the health department. … We take the biggest hit, but the other entities also take the hit too.
Becker said, “We’ve been through this with Wasau. Wasau was horrible. They have absolutely no commitment to any of the communities that they’re in. Its all about the dollars.”
He added, “Now I’m hoping that Corning has a little bit more morality in their corporation than Wasua did. But unfortunately I don’t know that’s how it’s going to go. All we can do is sit back and wait and see what this decision comes down to.”
After the meeting, Superintendent Dr. Tammy McDonald said, “We are in the early stages of this situation and we will have to wait and see what happens before we can make discussions on how to move forward with our budget. … As a school district, It is out of our hands at this time.”