HOUSTON (CN) - Texas' largest appraisal district sued Valero Refining, claiming the oil company is not paying enough taxes for its Houston refinery because a review board reduced its appraised value by $123 million.
The refinery on the Houston Ship Channel takes in crude offloaded from ships. It can process up to 160,000 barrels a day, the San Antonio-based refiner says.
The Harris County Appraisal District pegged the refinery's value at $423 million for 2015, but Valero appealed and persuaded an appraisal review board to reduce the valuation to $300 million.
Appraisal district staff said that based on the county's 2014 tax rate, Valero would pay $7.2 million in taxes on the higher valuation and $5.1 million on the lower. The county tax office has not yet set the 2015 tax rate. The tax office said it will be set this month after two public hearings.
The appraisal district's chief appraiser Sands Stiefer sued Valero on Oct. 8, asking a Harris County judge to reverse the reduction.
"The 2015 tax year appraised value as determined by the ARB was far lower than the actual market value of the subject property as of January 1, 2015. If allowed to stand, such value would permit the property to escape its fair share of the tax burden in Harris County," the complaint states.
Appraisal district spokeswoman Mabel Menefee said the district has no criterion to use on when to challenge an appraisal review board decision.
"Determinations are made on a case-by-case basis, but appeals are extremely rare," she said in an email.
Menefee said the district is not backing off from its original appraisal: "Based on the information we have to date, we believe the $423 million value is appropriate."
The district is represented by Andrea Chan with Olson & Olson in Houston.
A Valero spokesman said the company does not comment on pending litigation.
In 2014, the district appraised the refinery at $396 million.
All kinds of companies and homeowners go to court each year to ask for reductions of their property taxes. The cases dominate the Harris County Court docket each fall as businesses scramble to appeal their property valuations.
In the past two weeks Continental Airlines, Halliburton Energy, Target Corp., Best Buy and JPMorgan Chase Bank have all filed suit in Houston, challenging their property appraisals.
Since 1982, more than 40,000 appraisal appeals have been filed in Harris County, court records show.
The cases are heard by three-member panels of the Harris County Appraisal Review Board, which is independent from the appraisal district. Its members are appointed by a Harris County judge.
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