Ruling takes silos off county tax rolls

April 23, 1993|By Darren M. Allen | Darren M. Allen,Staff Writer

With the stroke of a pen, almost $4 million worth of property was taken off Carroll County's tax rolls.

The Court of Special Appeals last Friday upheld a Carroll Circuit Court ruling that declared several silos owned by Lehigh Portland Cement Co. to be tax-exempt. The judges said the silos were an integral part of the cement manufacturing process and, therefore, not subject to property taxes.

While the ruling from the state's second-highest court made Lehigh officials happy -- they stand to save at least $93,960 in county property taxes next year -- officials at the state Department of Assessments and Taxation and in the town of Union Bridge were less enthusiastic.

"It's hard to say what the impact of this ruling is," said Lumen F. Norris Jr., an official in the Carroll County office of the Department of Assessments and Taxation. He said the silos have a market value of about $7 million and an assessed value of about $4 million.

Union Bridge officials yesterday were unsure if the silos are even inside town limits.

Mayor Perry Jones said he didn't think the silos were inside the town, while Clerk/Treasurer Kathy Kreimer didn't know how much of the sprawling Lehigh plant was within town limits.

If the silos are completely within the town, the ruling could wipe out $27,190 in property tax revenues for Union Bridge. The town's total budget hovers at $400,000.

"We haven't had a chance to look at the impact," Ms. Kreimer said yesterday.

The impact on Lehigh -- which has operated the cement plant since the early 1900s -- was clear. The company first challenged the tax status of the silos in 1988, according to company attorney Joseph S. Kaufman. Lehigh has continued to pay taxes while the case was being decided.

"Lehigh was sort of an anomaly," the Baltimore attorney said yesterday. "Most of these types of silos in Maryland are tax-exempt."

The exemption stems from a General Assembly bill in 1914 giving companies tax breaks for tools used in the manufacturing process.

The bill has consistently been upheld by the state's appellate courts since the case of County Commissioners of Carroll County vs. B. F. Shriver Co.

In that 1924 decision, the Court of Appeals held that the three Shriver vegetable canneries were manufacturing concerns, and much of their equipment and buildings were exempt from taxation.

Mr. Kaufman said that since 1988, he has successfully argued with state tax officials to exempt nearly $5 million worth of Lehigh's total $10 million tax assessment.

"The company took advantage of what it should have been taking advantage of for a long time," Mr. Kaufman said. "The legislature, in 1914, intended to provide an incentive for manufacturing companies. Those silos are part of the manufacturing process."

State officials didn't know yesterday whether they would appeal the decision to the Court of Appeals. But Mr. Norris of the assessments office and Mr. Kaufman downplayed the ruling's impact statewide.

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