Bencini takes stand on tax policy

Mar. 04, 2013 @ 04:32 PM

Commissioner Bill Bencini took a stand Monday against a county tax policy that has angered tenants in several downtown High Point furniture showrooms.
Bencini said that it is unfair to tax tenant property because the businesses are not county residents.  The way the county assessed and billed the Market businesses last year has caused “problems for the largest economic generator in the state,”  he said.
“These businesses can’t be Guilford County businesses,” the High Point Republican said during a special Board of Commissioners meeting, “if they are here for just 20 days.  It’s like the circus passing through town. The circus is not a county business.”
Following a heated discussion, county officials agreed to talk with High Point Market Authority and state tax officials about the tax bills that Tax Director Ben Chavis says the tenants are required to pay even if they occupy the showrooms for just 20 days during the semi-annual High Point Market. Personal business property includes business machinery and equipment, or business rental property as of Jan. 1 each year.  Any property that has been depreciated for taxes is considered business property, Chavis said.  The tax rate is the same as the tax rate for real property.
“We have been fair about this and we have not targeted the showrooms,” Chavis said. “We want to get this property on the books.”
The county hired a subcontractor to “discover” businesses that either had not listed personal business property or had not paid the tax. The tax for eight furniture-related businesses, all of which filed tax listing forms, was $25,048. 
“How does a company in Charlotte know what is in a showroom if no one visits?  It appears these values were pulled out of a hat,” Bencini said.
Of the eight tenants, the contractor “assigned” a tax value to five based on a database. 
“All these tenants got was a number and no description of the assets. This company is highly motivated to get a high number. I believe this was a fishing trip,” Bencini said.
Republican Commissioner Hank Henning said TMA has an “aggressive” reputation in the business community.
“This is borderline harassment of these taxpayers,” Henning said.
Last week, Tom Conley, president and chief executive officer of the High Point Market Authority, said the authority got a bill for back taxes for five years. The bill was canceled following a call to the tax office, he said.  Chavis said businesses can challenge assessments, but most have paid the tax without complaint.
“Most people pay the bill if it has the tax director’s name on it,” Bencini said. “You threw a number out and people paid it.”
Chavis said he also would  ask the N.C. Department of Revenue about any part-time exemptions.
“It does seem unfair to me to assess these businesses for taxes for a year when they are not here for a year,” said Republican Commissioner Jeff Phillips.
There also was some discussion about examining showroom tenant contracts to see who owns property left in the showrooms after Market sessions.  Chavis said any personal business property a tenant leaves in a showroom can be taxed either as the tenant’s or the showroom’s property.
“Usually, if the property is left in the showroom, it becomes part of the building,” Chavis said. “Any improvements that stay there for the year are taxable.”
“This is a moving target at Market,” said Democratic Commissioner Bruce Davis of High Point. “There should be a pro rata formula. These businesses could be taxed in other places too.”
dnivens@hpe.com|888-3626

Discovery
Listings: Guilford County hired the Charlotte-based firm of Tax Management Associates to find businesses that either had not listed personal property or had not paid taxes on it.  TMA charges a 40 percent commission based on new revenue collected.

Report:  The TMA survey discovered 733 businesses with an assessed value of $90,682,050 and total personal property tax of $1,917,669.24.  Only eight were furniture related businesses in High Point with an assessed value of $1,345,610 and a total tax of $25,048.43.  Two businesses appealed the assessments.