With tens of millions at stake, feud over trans-Alaska pipeline value heads to court

This is a short update to an ongoing story about a dispute over the taxable value of the trans-Alaska pipeline system. The previous story, with more context, by Northern Journal is here. 

A high-stakes feud between Alaska’s major oil companies and three municipalities that collect taxes from those companies is now headed to court.

The fight is over the value of the trans-Alaska pipeline — a calculation that determines how much the companies owe in property taxes each year. Tens of millions of dollars are at stake.

In May, a state tax board set the pipeline’s value at $13 billion. Both the oil companies and the municipalities then filed appeals to the Alaska Superior Court this month.

The municipalities say the taxable value is much higher — about $20 billion. The oil companies say the pipeline’s value is significantly lower — some $2 billion.

Both parties appealed an initial $10 billion assessment by Gov. Mike Dunleavy’s administration. Then, the tax board raised the value by $3 billion.

The municipalities think the value was “improperly determined” by the board and is “considerably higher,” Robin Brena, an Alaska attorney who has long represented the municipalities in pipeline property tax matters, said in a brief phone interview last week.

In its 18-page appeal, lawyers for Alyeska Pipeline Service Co., which is owned by affiliates of the state’s three biggest oil companies and operates the pipeline, also said the state board erred, but for different reasons.

The board’s determination and the Dunleavy administration’s earlier decision were “excessive” and “grossly overstate” the pipeline’s value, the appeal said.

Northern Journal contributor Max Graham can be reached at [email protected]. 

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