The extent of state taxing authority in “Indian Country” has been challenged in a court case whose outcome could ultimately affect school operations, municipal budgets, and public capital improvements financed with the proceeds of government bond issues.
Oneta Power LLC, which owns an electricity generation plant in Broken Arrow, filed suit in 2020 in Wagoner County District Court against County Assessor Sandy Hodges over the company’s property tax assessment.
Oneta Power raised the question of whether the Wagoner County assessor “has lawful jurisdiction to levy and assess ad valorem tax on personal property within the territorial boundaries of the Creek Reservation” in light of the Supreme Court of the United States’ decision in McGirt.
The power company also appealed the substantial increase in the plant’s property tax valuation.
Hodges assessed the property at a fair cash value of $282,021,000 for tax year 2019, but raised the valuation for tax year 2020 to $399,245,277. That was an increase of more than $117 million, or 41.5%.
The power company contends the “actual fair cash value” of their property is $218 million “or less.” The assessor said her office contracted with an outside company to calculate the value of the power plant.
For tax year 2021 Hodges assessed the power plant’s value at $417,649,194, an increase of $18.4 million, or 4.6%. Oneta claimed in its latest lawsuit, filed in 2021, that the power plant’s fair cash value is $246.9 million or less.
The electric company has requested a trial “to correct and lower” the fair cash value of their property.
Oneta has paid the share of property taxes that were not in dispute, and has deposited into an escrow account the portion that has been protested, Hodges said.
District Judge Douglas Kirkley consolidated the two lawsuits on Oct. 25, 2021, and directed the two parties to attend a private mediation or judicial settlement conference by June 30, 2022. If the dispute cannot be resolved by then, a trial date will be established at a pretrial conference set for July 25, 2022.