(e) The Society of Real Estate Appraisers
1. On or before March 1 of each year all
utility and railroad companies are required to file a return of financial
information to the department. (§
40-21-3).
2. After receiving the return,
the department will determine the unitary market value of the company (§
40-21-6).
3. After determining the unitary
market value of the company, the allocated Alabama value will be determined by
computing the percentage of the gross investment the company has in Alabama
divided by the total gross investment everywhere. This percentage of investment
in Alabama is multiplied by the total unitary market value of the company to
calculate the Alabama taxable value. Intangible properties of a public utility
with undeterminable physical locations may be allocated to Alabama based on,
but not limited to, the level of business as measured by the gross revenue
generated in Alabama divided by the gross revenue generated everywhere by the
company (§
40-21-22). Intangible property of this nature generally arises from acquisitions or
mergers of other companies with purchase prices paid in excess of the book
value of the acquired companies. The sum of the allocated Alabama tangible and
intangible property will compose the Alabama taxable value.
4. The Alabama taxable value will then be
multiplied by the constitutionally required property class assessment ratio to
determine the tentative assessed value (§
40-8-1(a),
Code of Ala. 1975). Once the tentative assessed value
of each company has been calculated, the taxpayer will be sent notice of this
assessment and given the opportunity for an informal hearing (§
40-2A-7(b)(1)(a),
Code of Ala. 1975). After the informal hearing, or if
no hearing is requested after 30 days has passed, the taxpayer will be sent a
final equalized assessment adjusted by the state determined equalization ratio.
The taxpayer will also be sent information on how to appeal the final
assessment.
5. After the yearly
assessment process has been finalized, the tangible and intangible equalized
assessed values of the company's property in Alabama will be apportioned to
each county and taxing jurisdiction in Alabama based on the percentage of the
tangible gross investment in each Alabama taxing jurisdiction to the total
tangible gross investment in the whole state (§
40-21-22).
6. On July 1st of each year, or
as soon thereafter as practical, the department will distribute to each Alabama
county a certified copy of the equalized assessed value of each utility company
located in its respective county along with a summary sheet of the total
utility property in the county. Copies of these distributions will also be
forwarded to each respective utility. This distribution will include:
1. A description of property.
2. The company's total equalized assessed
value of the county.
3. The total
value of the company located in each respective taxing jurisdiction within the
county (including school districts and cities).
The county tax assessing official will use these assessments as
a basis to compute the ad valorem taxes owed to the city, county, and state by
each company (§
40-21-17).
