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County, Caterpillar settle back taxes dispute

By Jebb Johnston

Alcorn County and Caterpillar have agreed to settle the litigation over back taxes assessed on the industry.

The Board of Supervisors agreed to the settlement in an executive session Monday evening. A trial date in November had recently been set for the circuit court appeal filed by Caterpillar.

Board Attorney Bill Davis said the industry agrees to pay the back taxes over a period of five years. For the years 2011 to 2016, the county assessed ad valorem taxes of $2,397,404, with $1,169,219 of that amount owed to the county school district.

Under the terms of the settlement, the county agrees to grant free port warehouse licenses for Caterpillar's distribution warehouses on Cardinal Drive and South Harper Road. They are granted in perpetuity, said Davis. Mississippi law allows eligible warehouses, public or private, to seek a license to operate as a free port warehouse and be exempted from all ad valorem taxes on personal property shipped out of state.

"That is something, as I understand from the economic developers, is part and parcel of having a good economic relationship with your major manufacturers and employers," said Davis. "It is, quite frankly, just good business, and the board recognizes that."

The board voted to approve both applications.

Davis said the settlement comes "after a significant amount of good faith negotiations with Caterpillar and in recognition of the very important role that Caterpillar occupies in this county."

The situation came about after an error was discovered in the tax assessor's office that had allowed an ad valorem taxation exemption to extend beyond the authorized time frame.

"It was an issue that was brought about by a deficiency in the tax assessor's office over many years, and not one particular person is to blame, but an issue occurred, and it unfortunately continued for a very long period of time," said Davis.

Alliance President Clayton Stanley said he appreciated the board's action on the free port warehouse applications.

"This is a big deal not only for CAT and the 1,500 people that work for them locally, but also to demonstrate to future industries that we are recruiting that Alcorn County is open for business," he said. "Recruiting new businesses is highly competitive. This exemption is a state statute that was passed years ago to allow counties that wanted to, to be competitive. The Alcorn County board demonstrated how serious they are about creating and retaining jobs, and I'm grateful."