The Alaska Supreme Court today handed the owners of the trans-Alaska pipeline system, or TAPS, a defeat in a case concerning the taxable value of state’s most vital physical asset.
In a 38-page opinion written by Chief Justice Dana Fabe, the high court upheld former Superior Court Judge Sharon Gleason’s landmark ruling that put the value of TAPS for property tax purposes at $9.98 billion.
The pipeline owners including BP, ConocoPhillips and ExxonMobil had argued TAPS was worth less than $1 billion.
“We find no error in the superior court’s standard or method of valuation of the Trans-Alaska Pipeline System, nor in the specific deductions it made to account for depreciation,” the Supreme Court concluded.
The opinion pertains only to the 2006 tax year. The ruling, however, likely will have importance for subsequent disputed tax years.
Petroleum property taxes are an important government revenue source in Alaska, though not as big as other streams of oil dollars including production taxes and royalties.
Justice Daniel Winfree, joined by Justice Craig Stowers, dissented in part to the majority opinion.
See story in Feb. 23 issue, available online at 11 a.m. Friday, Feb. 21, at www.PetroleumNews.com