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City ordered to repay tax interest

 

Petroleum storage tanks stand on the U.S. Oil Co. Inc. property at 9451 North 107th St., Milwaukee, on Tuesday. The company won a lawsuit against the city of Milwaukee and will get a refund for some of the property taxes it paid to the city. (Staff photo by Kevin Harnac)

Petroleum storage tanks stand on the U.S. Oil Co. Inc. property at 9451 North 107th St., Milwaukee, on Tuesday. The company won a lawsuit against the city of Milwaukee and will get a refund for some of the property taxes it paid to the city. (Staff photo by Kevin Harnack)

By Marie Rohde
The Daily Reporter

The city of Milwaukee will have to refund an oil company more than $530,000 in tax interest, according to an appellate court decision that found that the company was taxed differently than similar businesses.

Vincent Moschella, a deputy city attorney, said his office has not decided whether to petition the Wisconsin Supreme Court for a review of the Dec. 27 decision. Even if it is not appealed, the decision will not have a significant impact, he said.

“We may have lost the battle, but we probably won the war,” Moschella said. “All of the other businesses are now assessed on the same basis.”

The lawsuit was brought by U.S. Oil Co. Inc. Joseph Pickart, a lawyer representing the oil company, said that despite the city’s decision to assess all the oil companies in the same manner, his clients believe they are still being overcharged on property taxes.

“We have an appeal pending on the city’s valuation,” Pickart said. “That’s a fight for another day.”

The decision of the District I Court of Appeals was based on a lawsuit brought by U.S. Oil in 2006 challenging the city’s assessments for 2004 and 2005 of company terminals at N. 107th St. and Granville Road.

A city assessor, in preparation for a Board of Review hearing, subpoenaed the company’s audits, financial statements, balance sheets, operating statements, auditor’s opinion, gross income and lease information. The assessor argued that the property value should be based on the capacity of the terminals and oil prices.

Pickart said the city was seeking sensitive corporate information and withdrew the appeal.

The city retroactively reassessed the 2006 and 2007 value of terminals belonging to four other oil companies using the same method. Those companies sued in state court, contending the assessments should be based on comparable property values. That case is pending.

Later, the property’s $6 million assessment was boosted to $14 million. U.S. Oil filed a lawsuit in Milwaukee County Circuit Court. A judge found that because the city did not use the same standard for terminals owned by other oil companies, they violated the Uniformity Clause of the constitution.

Judge Elsa Lamelas agreed with the oil company and the city appealed.

Marie Rohde can be reached at marie.rohde@dailyreporter.com.

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