Natural gas lawsuit could suck millions from Columbia County tax revenue

NW Natural, state duke it out over the taxability of natural gas stores

By Erica Ryberg

The South County Spotlight, Dec 23, 2009, Updated Dec 23, 2009 (3 Reader comments)

Columbia County is withholding $2 million in tax payments from NW Natural Gas pending the outcome of a five-year-old lawsuit that pits the utility against the Oregon Department of Revenue.

The withholding is a further financial blow to the more than three-dozen tax districts, including schools, fire departments and cities, that depend on tax collections to fuel operations.

“Right now I’m considering it a $500,000 loss,” said Terri Burns, the St. Helens School District’s finance director who manages the district’s $27 million annual budget.

Burns was able to cushion the blow by budgeting for less property tax than she expected to get, but that still leaves her with $200,000 to somehow make up.

The case hinges on whether the natural gas the company keeps in the depleted Mist gas fields and elsewhere in 16 Oregon counties is taxable.

Two pieces of Oregon tax legislation conflict on this point. Since 2004, two courts have heard the case and have each handed the natural gas provider a $4.5 million victory. So last month, the revenue department took its case to the Oregon Supreme Court.

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