Two of the three parties who met with the Cook County Board of Appeal and Equalization June 16, 2009 did not get what they asked for when the board reconvened Tuesday, June 23. The board had met for three hours the evening of June 22 as well but was not able to complete its business until it met for a third time.
Gunflint Lodge owner Bruce Kerfoot came closest to getting what he asked for. The estimated market values on numerous cabins in his planned unit development (PUD) were reduced by as much as 61-80%.
Kerfoot had contended that the taxable value of other PUDs in the county had not increased as dramatically as his when they were completed.
As the units get sold, the new tax values will be determined by their sale prices.
Taken out of the equation was extra value Assessor Mary Black had originally included for services from Gunflint Lodge staff that are included in the purchase of the timeshares.
County Commissioner Bob Fenwick asked Black if she was comfortable with the adjustment. She said she was, especially since the parcels have not sold yet.
Jim and Betty Huskey were very polite as they left the meeting, even though their request that their property not be taxed at a commercial rate was denied.
Betty has been operating a hair salon from her home since 1992, but only after a letter to the editor from fellow hair stylist Carolyn Larsen pointing out discrepancies in how residents with home businesses were being taxed did Betty’s business get taxed at a commercial rate.
Huskeys said that since their home is zoned residential, they must operate under a city-issued conditional use permit that denies them the same rights as businesses conducted in commercial zones. Paying commercial-rate taxes without commercial-zone privileges was not fair, they said.
Other residential business owners are not complaining about being taxed at a commercial rate, Commissioner Fritz Sobanja said. Where else are you going to rent an office space for the extra amount you’re paying in property taxes? he asked the Huskeys. The reason their taxes have changed is that they were previously overlooked, he said, adding that they could ask the city to review their need for a conditional use permit.
Assessor Black handed out a list of 50 county properties that are taxed at a split residential/ commercial rate determined by the portion of the property that is commercial. Black said she has become aware of several other residential businesses that her officeneeds to review this year. All properties in the county are reviewed in person every five years by assessor’s office staff.
Commissioner Jim Johnson pointed out that if the assessor’s office does not know of a business being conducted from a residence, it wouldn’t be taxed at a commercial rate. The board and the county attorney discussed how the assessor’s office would know if a business is being conducted from a residence and whether business not open to the public should be taxed at a commercial rate.
Black said that she polled numerous other counties about their taxation policies. Carlton County only taxes commercial rates for businesses that operate out of separate buildings. She pointed out that people could still get a homestead exemption for the residential portion of their properties.
The Huskeys got caught in the middle, said Commissioner Johnson. He sympathizes with them, he said, but he believes the commercial tax is fair.
Commissioner Bruce Martinson recommended that they develop a policy outlining what determines a commercial taxation rate. Framing a policy could bring up more questions rather than simplify the process, Commissioner Fenwick replied. Mary Black and Jim Johnson, the board liaison to the assessor’s office, agreed to discuss the possibility of developing a policy at a later time.
In a separate phone call, Black said an email from the Minnesota Department of Revenue recommended designating as commercial the portion of residential property that is open to the public, charges a fee, and has a portion of the property dedicated to business use.
Black said she would probably be putting together a set of guidelines rather than a policy since counties have some discretion in how they determine commercial designation.
Theestimate market value of MacFarlane Lake property owned by James Nygard was reduced by 12.87% to a value of $235,300 for just over 800 feet of lakeshore. Nygard had appeared before the board on June 16 asking why his property had gone up in value since the 1980s at more than twice the rate of his neighbors. Theadjustment he was granted was based on the fact that a previous reduction had been made but had not been carried forward into the current tax bill.
Board Secretary Janet Simonen said that Nygard contacted her, saying that he was asking the county to drop his valuation another 10%. If his request were not granted, Simonen said, he would probably take the matter to tax court.
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