Nov 06, 2008, The Charleston Gazette

State Supreme Court denies Bayer tax appeal

The state Supreme Court has denied Bayer Corp.'s appeal in a $457,000 tax case. The court issued a 35-page opinion on the matter Wednesday.
In its appeal, the chemical giant maintained that because of inventory mistakes, it paid Kanawha County more taxes than it actually owed for its South Charleston property for the years 2001, 2002 and 2003.
It also maintained a Kanawha Circuit judge mistakenly overturned the Kanawha County Commission's decision to refund the overpayment to Bayer.
But Kanawha County Assistant Prosecutor Rob Schulenberg argued that Bayer never proved that its mistakes were unintentional clerical errors rather than negligence.
The high court agreed with him.
"Insofar as Bayer failed to provide any witness testimony on the critical issue of what measures it took to prevent the taxing errors in question, Bayer failed to prove by clear and convincing evidence (as well as the lower standard of preponderance of the evidence) that the errors were caused by a mistake that was attributable to an unintentional or inadvertent act," the opinion states. "On the contrary, the record supports finding that the errors were caused by Bayer's breach of its duty of care in collecting and reporting its tax data."
Kanawha County Commission President Kent Carper, who voted against giving Bayer a refund in 2003, said he felt the ruling set an important precedent.
"The ruling by the Supreme Court vindicates taxpayers. The average taxpayer doesn't have a warehouse full of lawyers and lobbyists like these foreign companies do," he said.
The ruling prevents large companies from reviewing past tax returns for loopholes and seeking retroactive refunds, he said.
"This would have looked like the Wall Street run on the bank if they had gotten away with this," he said. "Had this been allowed to stand, every large out-of-state company would have done the same thing."
The ruling protects smaller municipalities and government bodies from being overrun by lawyers and lobbyists for big companies looking for ways to pay fewer taxes, he said.
Regular taxpayers don't have lawyers poring over past returns looking for possible grounds for appeal, he said. If large companies with greater resources can retroactively avoid their tax responsibilities, the average taxpayer would be forced to pay more, he said.
"It's a taxpayer's Bill of Rights," he said of the Supreme Court's decision.
Charleston attorney Ned Rose, who represented Bayer on the tax issue, did not immediately return a call for this story.
The opinion rejects Bayer's contention that the prosecutor's office didn't have the legal right to try to overturn the commission's initial decision to grant a refund. The justices also ruled that Kanawha Circuit Judge Jennifer Bailey Walker correctly drew her own conclusions when she heard the case in 2006 and 2007.
Bayer had maintained that Walker had an obligation to defer to the commission's finding that the mistakes on Bayer's tax returns did not constitute negligence on the company's part. Andrew Clevenger

A Collection of Materials on Bayer´s Institute Plant