On the top of the agenda in the House Revenue and Taxation Committee, this afternoon is a bill to again try to legalize a tax break for billboard companies.
UPDATE: The bill failed to get an endorsement on a voice voter after opposition from the Association of Arkansas Counties and Washington County Assessor Russell Hill, who explained why creating a separate class of treatment for one type of real estate owner was a bad idea.
It is Rep. Jim Dotson’s 1821 to allow billboards to be appraised for property taxes based on the cost of the billboard, not the market value of the property on which it sits.
Background: The legislature passed this bill in 2015 to overcome a ruling from the state Assessment Coordination Division. It amounted to a huge tax break. High-profile billboard locations cost a lot of money. Low-traffic locations are cheap, though the amount of money to build the sign at either location is the same. As Rep. John Walker noted at the time, this thinking would mean property in the Country Club neighborhood and the East End had the same value, with the only tax consideration the cost of the house.
A taxpayers’ lawsuit was filed over the legislation. The Arkansas Constitution requires equal treatment of property. Circuit Judge Mary McGowan ruled last year that the law was unconstitutional. County Assessor Janet Troutman Ward didn’t support enforcing the law, constitution aside, because the bill didn’t receive the three-fourths vote necessary to change assessments from a market value basis.
The billboard lobby didn’t appeal McGowan for fear that the Arkansas Supreme Court would give it statewide application and presuming they’d find another Benton County legislator (Bart Hester sponsored the last try at a time he had interests in billboard property) willing to give billboard companies their tax break back. Though McGowan’s ruling didn’t have statewide application, county assessors statewide are applying it for the time being.
Great testimony against the bill. The counties noted that it’s unconstitutional to give special treatment to one type of property (except timberland, which has its own constitutional amendment). Hill noted that many others would be spoiling to carve out similar treatment. Billboard value is all about location, not about the value of the billboard, he said.
Dotson said the bill only maintains the status quo, which is not exactly true given the court ruling that finally was issued in this case. And it was pretty funny to hear him say it was struck down only on a technicality. Yeah, they put a law on the books that actually didn’t pass under the rules.
A rare piece of good news.