Facing taxes, fighting back

CSX says some of its property is being improperly taxed.

By SYDNEY P. FREEDBERG, Times Staff Writer
Published November 12, 2007

TAMPA - Hillsborough County is trying to collect about $240,000 in back taxes from railroad giant CSX.

The Hillsborough property appraiser's office has issued assessments to CSX for a 47-acre cargo terminal site at 1901 N 62nd St. in east Tampa, saying the property had been incorrectly "omitted" from the tax rolls.

In letters to the company last month, Tim Wilmath, Hillsborough's director of valuation, said the CSX property that "escaped taxation" has now been valued at about $5.2-million in 2004 and $5.8-million in 2005. That translates into about $115,000 in back taxes for 2004 and $128,000 for 2005.

But CSX, which already pays more than $10-million in property taxes statewide, says it will "vigorously oppose" efforts to collect additional tax.

"We believe that we have paid property taxes on all CSX property in the state of Florida," said spokesman Gary Sease.

The dispute intensifies an ongoing battle in state and federal courts over how the railroad's property should be taxed and whether CSX, a Fortune 500 firm based in Jacksonville, is dodging some of its tax burden.

At the center of the dispute are three terminals, the one in Tampa and similar facilities in Orlando and Jacksonville, where containers are transferred between trucks and railcars.

For at least a decade, state revenue officials, who are responsible for assessing railroad property across Florida, have said they did not assess those terminals as railroad property. That's because CSX argued they were part of a trucking business.

The three counties never collected property taxes on the terminals either, because they assumed the state was taxing them as railroad operations.

Last year, for the first time, the Department of Revenue issued an assessment for the trucking business, including the three terminals. That was in addition to an assessment for CSX's railroad operation. Combined, they amount to about $15.1-million in 2006 taxes for Florida counties, including about $1.5-million for Hillsborough.

CSX promptly challenged both assessments in federal and state lawsuits. It sued again last month after the Revenue Department issued a 2007 assessment for the trucking business.

The company contends that the trucking unit leases property from the railroad and that those leases are part of the assessed value of the railroad. That means the railroad business already pays taxes on the terminals in Tampa, Orlando and Jacksonville, CSX says.

"The result of the proposed back assessments is to simply raise the valuation of property that has already been valued and taxed," Kenneth R. Hart, a lawyer for CSX, said in a letter to the appraiser's office dated Oct. 30.

William Shepherd, general counsel for the property appraiser's office in Hillsborough, said the company might have a valid argument.

"We're waiting for the Department of Revenue to advise us whether those lease payments were included in their assessments," he said. "That will drive whether we go forward or recede from the back assessments."

Neither Orange nor Duval has sought back taxes on the terminals run by CSX's trucking unit.

[Last modified November 11, 2007, 23:40:28]