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Monday, February 11, 2013

Tax payments overdue for cell towers on MCPS properties

County adds interest to unpaid bills


Records obtained from Montgomery County Government reveal that several owners of cell towers that are situated on MCPS Board of Education property have failed to pay thousands of dollars of state, county and city property taxes that were due in 2012 and earlier.   The offenders include Sprint, Comcast, and Cricket Communications.

The taxes were billed pursuant to a Maryland property tax law that requires lessees of government-owned property to pay property taxes. 

A description of the applicable law is found in the Maryland Assessment Procedures Manual.
For government owned property, the tower site should be assessed to the tenant ( Lessee) in possession of the property. The Tax Property Article, in Section 6-102(e), provides that the "interest of a person in property owned by the federal, the State, a county, or a municipal corporation government is subject to property taxes as though the lessee or the user of the property were the owner of the property, if the property is leased ... in conjunction with a business that is conducted for profit." 
While the towers have been in place on school grounds for many years, the Maryland Department of Assessments and Taxation added assessment records for the towers to their database only recently after they learned that former Superintendent Jerry Weast had quietly signed leases with the cell phone companies over the past decade.  Many of the leases were signed without approval from the Board of Education and without notice to the public.

Links to a few of the many unpaid property tax bills are below.

https://www6.montgomerycountymd.gov/apps/tax/ViewDetail.asp?RID=4796861

https://www6.montgomerycountymd.gov/apps/tax/ViewDetail.asp?RID=4796840

https://www6.montgomerycountymd.gov/apps/tax/ViewDetail.asp?RID=4797428

https://www6.montgomerycountymd.gov/apps/tax/ViewDetail.asp?RID=4796854

https://www6.montgomerycountymd.gov/apps/tax/ViewDetail.asp?RID=4796842

According to a high-level official at the Maryland State Department of Assessments and Taxation, failure to pay the tax bills will eventually lead to a tax lien sale of the towers and equipment that are on the leased sites. 

Update -- 5/232013:  We are being told now that the towers and equipment are not eligible to be included in the tax lien sale.  Instead, the Montgomery County must sue the cell tower companies to recover the unpaid taxes, which is potentially a long and expensive process compared to a tax lien sale. In addition, taxes that have gone uncollected for more than three years can never be recovered due to a limitation imposed by state law.

9 comments:

  1. Louis--
    Has SDAT assessed the towers at private, membership swim clubs? Or, since the County Council ended property tax payments for community pools, is this a mute point? If so, this will become a tax savings strategy for cell tower companies. Or, should a separate tax account be set up for each tower on a non-profit tower site, so that other non-profit institutions will not be a no-tax zone for this commercial use?

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  2. Hello Anon,

    Your questions appear to be addressed in the above-linked section of the assessor's manual. Specifically:

    "Sites located on exempt properties must be discovered, listed, and assessed. For educational, religious, and other non-profit uses, the tower use is not consistent with the typical qualifying exempt purpose. When discovered, it may be necessary to have a new application for exemption completed by the property owner. The emphasis of this should be toward obtaining a copy of the lease for the tower site. The tower site, along with any other area of the property dedicated to a commercial use, should be made taxable, and notices should be sent to the owner of the real estate. The taxable notice would be directed to the owner of the land. The conditions relative to qualifying for an exemption, and the controlling dates for the application process are found in the Maryland Assessment Procedures Manual. "

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  3. Thanks, I should have clicked on the link, sorry. Your answer brings to mind an easy solution to the open-ended requirement for SDAT to "discover" cell towers. In MoCo the Transmission Coordinating Committee has a database (a little out of date however) which includes all tower locations, property owners and tower owners. Hopefully someone from MoCo has provided this information to SDAT? Also, going forward, the MoCo Transmission/Tower Coordinator should notify SDAT of any new towers!

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  4. Hello again, Anon.

    You'd think that the county government and state government would talk to each other, wouldn't you? But what it really takes to get this kind of information to flow is citizens acting as the conduit between the various jurisdictions. The staff at the Parents' Coalition does pass this type of information on the appropriate agencies, but they don't always act on it in a timely way, and sometimes they don't act upon it at all. We even let other media know about these oversights, but it's rare that the media follows up.

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  5. I am not sure how the tax lien sale would work. pretty sure that telecomm cos. are required by law to remove towers when they aren't using them anymore.

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  6. The towers are in use, and their use is not the issue. The issue is nonpayment of taxes.

    According to a high-level official at the SDAT, if the cell site equipment lessees don't pay the property tax bills, liens will be placed on the equipment. Tax lien certificates are sold at the tax lien sale that is held every June in Montgomery County. If the cell tower owners don't redeem the tax liens within the time specified by law (which is just a few months), the certificate holders can file complaints in Circuit Court and take ownership of the towers and associated equipment. In other words, the lien purchasers get the cell site equipment for a tiny fraction of its value, and can sell it or reuse it. It's a great way to buy your own cell site!

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  7. something else for the mont co ig to not investigate and declare fine

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  8. The Montgomery County IG has a very nice way to supplement his retirement income. And we generous Montg. Co. taxpayers get to pay him twice! Once, with our federal taxes, for his federal retirement, and a second time with our local taxes, for running the IG office. No wonder the county council needs to raise our taxes.

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  9. How 'bout different approach: Have the School Board enforce the leases. They can require the Carriers-Tenants “to comply with all applicable governmental laws and regulations.” Under the leases the Board must give 30-days notice any non-compliances. After 30 days, upon failure “to cure” the Board may and SHOULD TERMINATE THE LEASES FOR DEFAULT.

    ReplyDelete

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