Stark County Commission denies tax exemption to oil companyStark County Commission members denied the first-ever oil-related company request for a property tax exemption during a meeting at the Stark County Courthouse Tuesday.
By: Sean M. Soehren, The Dickinson Press
Stark County Commission members denied the first-ever oil-related company request for a property tax exemption during a meeting at the Stark County Courthouse Tuesday.
Stark County Tax Director Diane Brines said after the meeting that the exemption would have allowed for more than $250,000 each year for the next five years.
Commissioners said they did not want to set a standard of giving exemptions to oil companies.
“We have not issued exemptions in the oilfield at this point, but I guess no one has come forward to us before either,” Brines said during the meeting.
The request from EDOG Logistics, LLC, of Wichita, Kansas, was for a 100 percent five-year property tax exemption eligible under the new construction and expansion clause of the North Dakota Century Code.
“This is a difficult one for us to allow for exemption when the industry is doing so well,” Commissioner Jay Elkin said during the meeting, adding that oil production has been very profitable and that other companies have not asked for exemptions.
EDOG plans on adding to the facilities where oil is transferred from storage tanks to transport railcars located northwest of Dickinson, representative John C. Wadsworth said. The plant plans to construct three oil storage tanks, truck unloading bays, pipeline receiving connections and railway loading for 12 railcars. Wadsworth said the estimated value of the improvements would create a $20 million asset.
“The plant will be a benefit to Stark County and the city of Dickinson,” Wadsworth said, adding that it will create about 75 contractor jobs during construction and 15 full-time positions during operation, with growth estimated up to 35 direct positions in the next two years.
Commission Chairman Ken Zander said the county wants to be a “good neighbor” and support development, but he didn’t want to set a precedent and the exemption would mean lost funding for other entities.
“We don’t want to start allowing or giving a company or private developer an exemption that affects other taxing entities, such as the school district or city of Dickinson, without input from them and how they would be affected,” Zander said.
Commissioner Pete Kuntz agrees.
“If we give it to one company, we will be expected to give it to others,” he said during the meeting.
Stark County recently granted exemptions to an ethanol plant near Richardton, Baker Boy and Steffes, but they have not been total exemptions. The companies work with a graduated program where the amount exempt decreases over the years, Zander said.
Stark County States Attorney Tom Henning said EDOG could resubmit the request under different conditions, such as a smaller exemption percentage or a graduated program. Also, he said commissioners could design an exemption program that would feasibly fit the budget.
After the meeting, Wadsworth said EDOG was still excited to bring a profitable asset to the area.