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HomeMy WebLinkAbout28. 15-402AUGUST 25, 2015 15-402 RESOLUTION (CARRIED___7-0_____ LOST________ LAID OVER________ WITHDRAWN_______) PURPOSE: DIRECT CORRECTION OF ASSESSMENT ROLL FOR TAX EXEMPTION FOR TIME WARNER CABLE & CHARTER COMMUNICATIONS INITIATED BY: ASSESSMENT SERVICES DIVISION WHEREAS, Section 70.111(2) Wis. Stats. exempts digital broadcasting equipment owned and used by a radio station, television station, or video service network, as defined in section 66.0420(2)(zb); and WHEREAS, Section 66.0420(2)(zb) Wis. Stats. defines “video service network” to mean wireless facilities, or any component thereof, located at least in part in the public right-of-way that deliver video service, without regard to delivery technology, including internet protocol technology or any other technology including a cable system; and WHEREAS, the Wisconsin Department of Revenue issued guidance related to the exemption of digital cable television equipment for cable television businesses under sections 70.111(2) and 66.0420(2)(zb) of the Wisconsin Statutes to assessors clarifying the exemption and advising assessors of the recommended practices pertaining to requests for exemptions from cable service providers under these statutes; and WHEREAS, the City has received requests for exemptions from Time Warner Cable and Charter Communications who provide video services within the City of Oshkosh; and WHEREAS, the Assessment Services Division has reviewed these requests and the guidance from the Wisconsin Department of Revenue and determined that a partial exemption for the property owned by these service providers is appropriate under the statutes and guidelines; and WHEREAS, the Board of Review for the City of Oshkosh met and the City Clerk had certified the tax roll for 2015 prior to the Assessment Services Division reviewing the correspondence from the WDOR and it is now therefore necessary to correct the certified roll. NOW, THEREFORE, BE IT RESOLVED that the City Clerk is directed to reduce the assessment for Time Warner Cable and Charter Communications based upon the review and advice of the City Assessor under section 70.73(1m) of the Wisconsin Statutes as follows: AUGUST 25, 2015 15-402 RESOLUTION CONT’D Time Warner Cable Assessed Value before Adjustment 138657000 $3,944,700 Assessed Value after Adjustment $10,100 Amount of Assessment Adjusted $3,934,600 Reason for Adjustment Property is exempt by law from taxation Charter Communications Assessed Value before Adjustment 078486000 $107,100 Assessed Value after Adjustment $16,500 Amount of Assessment Adjusted $90,600 Reason for Adjustment Property is exempt by law from taxation BE IT FURTHER RESOLVED that the City Clerk working with the City Treasurer shall correct the assessment roll before calculating the property taxes that are due and shall notify the Department of Revenue of the correction as provided in section 74.41(1)(d) Wis. Stats. BE IT FURTHER RESOLVED that the City Clerk shall provide notice to Time Warner Cable and Charter Communications of this correction. CITV HALL 215 ChurCh Avenue PO. Box 1130 oshk°sh' W's°°�s'� City of Oshkosh 54903-1130 � QIHKOlH TO: Honorable Mayor and Members of the Common Council FROM: Lynn A. Lorenson, City Attorney DATE: August 20, 2015 RE: DIRECT CORRECTION OF ASSESSMENT ROLL FOR TAX EXEMPTION FOR TIME WARNER CABLE AND CHARTER COMMUNICATIONS BACKGROUND Wisconsin Statutes exempt digital broadcasting equipment owned and used by radio station, television, or a video service network which is defined to include cable systems. While this statute has been in place for approximately six (6) years, many municipalities, including the City of Oshkosh continued to assess cable systems equipment. Earlier this year, the City received a copy of guidance issued from the Wisconsin Department of Revenue who generally oversee tax assessment within the State of Wisconsin clarifying the tax exemption for cable systems equipment. Staff believes that this guidance was issued statewide to assessors in response to a request from the cable service providers. The City of Oshkosh also received requests from Time Warner Cable and Charter Communications for adjustments to their personal property tax to reflect the statutory exemptions. Under the exemption, items such as service and test equipment; antennae; remote location and mobile equipment; fiber optic cable; coaxial cable; head-end, signal processing and program origination equipment; converter boxes and metallic cables and poles are exempt. Computer equipment is also exempt under a separate provision of the statutes. Some equipment remains taxable including towers, furniture, fixtures, office equipment, faxes, copiers, phone systems, and other equipment that would typically be taxed within a commercial business. The guidance document provided by the Department of Revenue recommended that taxing jurisdictions review and adjust the 2015 assessments due and recommended that the assessor offices throughout the state work with the cable providers to facilitate this exemption. ANALYSIS Originally, the City of Oshkosh received only a request from Time Warner Cable which initially used an incorrect form for reporting. Time Warner corrected the form and Charter Communications has also submitted a correct form reporting their taxable and exempt i� � personal property. While there may be some argument for denying the request based upon the initial submissions for this year, staff believes that based upon the guidance given by the Department of Revenue an adjustment should be made. In speaking with other municipalities, it also appears that most municipalities are approaching this issue in a similar fashion. If this matter had been brought forward prior to the conclusion of the Board of Review and certification of the tax roll, the adjustment would have been brought to that body for action. This year the City of Oshkosh opened and concluded its Board of Review very early and staff were not made aware of this issue until after the tax roll had been certified. Under the Statutes, the City Clerk is given the authority to review and make this type of adjustment, however, given the magnitude of this particular adjustment, staff believed it was prudent to bring this matter forward to the Council for their information, review, and approval. Although again there is some argument that the City could deny this requested exemption this year based upon a technical failure to comply with all requirements of the assessment statutes, siaff believes that based upon the clear language of the statute and the guidance provided by the Wisconsin Department of Revenue advising municipalities to make these suggested adjustments, that the City should make the requested adjustment for 2015. It should be noted that both companies have requested an adjustment to the 2014 amount as well, however staff is not recommending that an adjustment be made to the 2014 amount at this time based upon the failure to comply with the statute's notice and claim provisions for the 2014 tax year. It appears that this approach is consistent with that taken by other municipalities as well. FISCAL IMPACT The attached calculations from the Assessment Services Division show that correcting the assessment roll to provide the requested exemption will reduce the assessment of Time Warner Cable from $3,944,700 to $10,100; the assessment for Charter Communications will be reduced from $107,100 to $16,500; for a combined reduction of $4,025,200 from the City's tax base. Using last year's tax rate this would equate to a reduction in tax revenue of approximately $98,982.00 across all taxing jurisdictions, the impact on the City's tax revenue alone would be a reduction in tax revenue of approximately $38,489.00. RECOMMENDATION Staff recommends approval of the Resolution. Ily Sub Approved: ����� ������ ����_ � t ynn . Loren Mark A. Rohloff City Attorney City Manager