Against the advice of its staff, the Johnston County Board of Commissioners last week granted tax relief to a solar farm company that submitted an application 10 months late.
Under North Carolina law, solar farms can request to have 80 percent of their property value excluded from their tax bill. And California company Cypress Creek Renewables filed 40 such applications across the state earlier this year. But it forgot one, for Micro’s Bizzell Church Solar, and without the county’s help, the company faced a $74,000 tax bill.
Last Monday, Johnston commissioners voted 4-3 to grant the tax relief, setting a precedent that the board will accept certain applications nearly a year late.
Arguing on behalf of the California-based company, Raleigh attorney Chuck Neely freely admitted the error belonged to his client. He said a young and “relatively inexperienced” tax manager within the firm failed to submit the Johnston applications by the Jan. 31 deadline. The company discovered the error over the summer, when it received its tax bill from Johnston, and quickly filed an appeal.
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“Forty of these applications got processed properly, and one fell through the cracks,” Neely said.
Johnston County tax manager Sheila Garner said the county accepts late applications “for good cause shown.” But in this case, Garner said, the county had to determine what that meant because no solar farm had ever filed late before.
“There are no standards in the statute that lay out what good cause means,” Garner said. “Solar farms are relatively new to Johnston County. ... The concern our office has as more come forth, and I’m sure they will ... no one has set forth what good cause is, at the point that a late application is approved. I guess we will be setting a precedent for what good cause for a late application is.”
A divided board said that a 10-month misplaced application and quick appeal constituted good cause. Commissioners Jeff Carver, Cookie Pope and Allen Mims voted to deny the relief, while Commissioners Ted Godwin, Larry Wood, Keith Branch and Chad Stewart voted yes. Branch argued the $74,000 is money the county wouldn’t have received had the company filed its application in January.
“My biggest concern is this money we wouldn’t have gotten anyway, so I don’t mind setting a precedent,” Branch said. “If ... we’re charging them money that otherwise we wouldn’t have got, let’s set that precedent. I don’t have a problem with that.”
In recommending denial, Johnston’s tax office seemed more concerned about setting a precedent than the merits of the company’s appeal. County attorney Jennifer Slusser said approving this late application and denying a similar one in the future would open the county to a lawsuit. And board chairman Jeff Carver noted that the solar farm had another level of appeal, the N.C. Property Tax Commission, should the county deny the application.
“We have to go with the staff’s recommendation, because that’s what (Garner) gets paid to do for a living,” Carver said. “There is another level of appeal above this board, and Mr. Neely knows very well how to go through that process. I would be cautious with it. I would be very consistent.”
Commissioner Stewart said denying the application now, only to have the state make a ruling, was essentially taking county business out of county hands.
“The other appeal level is North Carolina, not Johnston County representatives,” Stewart said. “We don’t need to duck the situation off to someone in Raleigh when the business or structure is in Johnston County.”
Even with the approval, Bizzell Church Solar will still pay its 20-percent tax bill, plus a 10-percent late-filing penalty. In all, it comes to around $16,000.