Should marina owners be exempt from payment of county property taxes?
DeKalb County officials are concerned about state legislation which if approved would exempt from property taxes, any property owned by the federal government and leased to marina owners or operators who lease the federally owned property and make in lieu of tax payments on such property.
County Mayor Tim Stribling testified before the State House Local Government Committee Tuesday morning, February 2 on the impact such a law would have on DeKalb County. He said if such legislation were adopted, DeKalb County could stand to lose thousands of dollars in personal property tax collections.
“We have eight marinas on Center Hill Lake. For us to lose this tax would amount to about two and a half cents on our property tax rate. A penny brings in about $44,000. The money we generate from the boat docks from the personal property tax is about $108,000. That money goes to our general purpose fund. The money that the Corps of Engineers gives to DeKalb County amounts to about $95,000 and that goes into our landfill. To lose this tax would be a burden on the taxpayers, on the farmers, and on the working class,” said Stribling.
“These boat docks have a tremendous value. A lot of counties would like to have what we have but they don’t and I am as proud as I can be of them. They bring in a lot of people but they also depend on our services, our emergency services, our county fire department, our sheriff’s department, our ambulance service, rescue squad, and our landfill. They (marinas) all need those services. To pay a tax on personal property is no different than anyone else operating a business. I operated a car dealership business from 1984 to 2006. We paid our real estate tax and we paid a personal property tax on our equipment inside our dealership. So this is not a tax as such that the boat dock’s think they are paying to the Corps. It’s a lease,” he continued.
“I just want you to know that this (tax exemption legislation) would affect our economy. We would have to make up that two and a half cents (local tax money) somewhere,” Stribling concluded.
(VIEW VIDEO OF ENTIRE HEARING INCLUDING COUNTY MAYOR TIM STRIBLING’S REMARKS HERE)
The bill was filed last year by Republican State Representative Cameron Sexton of Crossville and by Republican State Senator Bo Watson of Hixson but it stalled in committee. Hearings have resumed on the proposal again this year.
Under the proposed legislation, state law would be amended by adding subsection which states that
(1) If any federally owned property is leased to any taxpayer that owns or operates a marina, yacht club, dock, or similar property located on the federally owned property, and the taxpayer has entered into a payment in lieu of tax agreement with the United States or an agency of the United States, then the federally owned property, the taxpayer’s marina or similar property, and any leasehold interest in these properties, shall be exempt from taxation.
(2) As used in this subsection (f), “payment in lieu of tax agreement” means an agreement requiring that the taxing authorities receive payments or other charges directly from a lessee of the property or from any other sources on account of the property.
(3) The exemption provided under this subsection (f) shall be provided in the same manner as exemptions from taxation provided under this chapter for property owned by this state or political subdivisions and leased by private lessees making in lieu of tax payments.
In November, Circuit Court Judge Amy Hollars ruled that Cookeville Boat Dock must pay a portion of delinquent DeKalb County property taxes which it has owed since 1998. Under the law, the county cannot collect more than 10 years of the marina’s back taxes due to a 10 year statute of limitations