County ordered to pay Avista Utilities $564,108

By Soncirey Mitchell
Reader Staff

The Bonner County board of commissioners confirmed a $564,108.71 payment to Avista Utilities during the Jan. 14 business meeting, following the 2023 ruling by the Idaho Supreme Court in Idaho Power Company v. Idaho State Tax Commission. Due to a new interpretation of state and federal law, counties must now repay a portion of the two utility companies’ property taxes collected in 2020, 2021 and 2022.

“That was a court order at a state level, so it’s not anything that Bonner County did wrong,” said Commissioner Brian Domke.

Idaho Power and Avista brought lawsuits against ISTC over its 2020, 2021 and 2022 property tax assessments, basing the challenge on the Idaho Constitution’s Uniformity Clause and the federal Railroad Revitalization and Regulatory Reform Act of 1976.

According to an ISTC publication, “The Uniformity Clause requires all operating property to be taxed uniformly. This means that if the property of one operating property is taxed at market value, then all operating property is taxed at market value.”

The plaintiffs argued that the Uniformity Clause worked in tandem with the 4R Act, which stipulates that “if commercial property is assessed at less than 95% of its market value, then states must either increase the value of commercial property or lower the value of railroad property to match commercial property,” according to the ISTC publication.

ISTC claimed that the 4R Act only applied to railroads — not utility companies — and that the Uniformity Clause did not extend the act’s jurisdiction. The district court initially sided with ISTC; however, the Idaho Supreme Court reversed the decision, ruling that when railroad property tax assessments drop, “operating property” assessments should as well.

The state calculated the amounts the utility companies overpaid in property taxes and required that counties pay back the money by issuing a cash refund, giving the companies a tax credit or a combination of the two. 

Bonner County Clerk Michael Rosedale clarified at the Jan. 14 meeting that Assessor Dennis Englehardt was not involved in the state’s new appraisal.

“Avista disputed property taxes for a few years back, so this was the final court settlement. This is Bonner County’s portion of it — some of that will be recouped from other taxing districts throughout the tax turnover process,” said County Comptroller Jessica Stephany, who presented the bill at the Jan. 14 meeting.

Bonner County is required to charge a proportionate share of the $564,108.71 refund to each taxing district. To make up for the loss, the districts will be able to issue an additional property tax levy within two years of the payment.