The challenge to how commercial property taxes are assessed on St. Thomas is growing. The corporate owner of St. Thomas' C & M Caron building, Twenty-One Queens Quarter Inc., has filed an action in District Court and asked that it be consolidated with the Gary Berne suit which was filed in August.
In the complaint prepared by attorney David Bornn, Twenty-One claims that its commercial property in downtown Charlotte Amalie was grossly overvalued by the Tax Assessor's Office in 1994 and since, and that the owner has effectively been denied a fair appeals hearing.
The government assessments for taxing purposes range from $3.8 million to $4.2 million each year from 1994 through 1998. A private sector appraiser has valued the same property at $2.5 to $2.66 million each year for the same period.
The owner filed a timely appeal, Bornn said, but it was more than three years before a hearing was even scheduled. It has been almost five years since the appeal was filed, and the Board of Tax Review has not made a decision yet, he said. The law requires the government to hold appeals hearings within 60 days of a formal request.
The appeals process requires the taxpayer to pay the tax in dispute and await reimbursement if the appeal is successful.
But with the appeals process delayed, "Petitioner has been denied a significant property right by not being able to use a large amount of money (and applicable interest) paid to the government as a result of an unfair and grossly high tax assessment," Bornn said in the complaint. "Petitioner has been forced to overpay the Tax Assessor more than $100,000, which money and accumulated interest therefrom could have been invested. … In addition, Petitioner has had to expend considerable funds on attorney's fees to enforce its clearly defined statutory rights."
Bornn argues that the case raises the same basic issues as the Berne suit: the method of assessment of commercial property (using replacement value rather than actual value) and the failure of the appeals process to protect taxpayers from unfair assessments.
Attorneys for Berne contend that the government has been overvaluing his — and possibly other property owners' — property by assessing taxes based on the replacement value rather than actual value. His companies, Berne Corp. and B & B Corp., are the plaintiffs in the case, which involves office and retail space in a section of downtown Charlotte Amalie popularly known as "Berne Alley."
District Judge Thomas K. Moore has set Dec. 4 to hear the case on St. Thomas.
Moore issued a preliminary injunction in September, saying the government and the tax assessor "are enjoined from collecting property taxes unless the property or properties are assessed in accordance with" the V.I. Code section that Berne seeks to enforce.
Tax Assessor Roy Martin said last week he had not received any instruction from the Justice Department regarding that portion of the order.
