Kraft Heinz appeals for lower property value assessment
Kraft Heinz Food Company has appealed to the Missouri State Tax Commission for a lower valuation on its property in Boone County.
The international food conglomerate was just approved for a seven-year, 75 percent tax abatement through Chapter 100 bonds in December. The company had hinted the plant might take its business and more than 300 jobs to another location if Boone County did not approve its proposal for an expansion and equipment upgrade at its location on Waco Road.
In the end, the company decided to forgo a tax break for the expansion but continued with the equipment upgrades tax break for $93 million. The taxing entities that benefit get the full real property benefits for the expansion, but Kraft pays only 25 percent of the personal property taxes for the equipment upgrades. The incentive began Jan. 1. Property that the company already owns was not included in the abatement.
The assessed value of the manufacturing plant is about $2.7 million and the fair market value sits at $8.3 million. According to the complaint filed Sept. 13, the company is claiming the property was overvalued by more than $1.5 million. It’s proposing the property be assessed at $960,000 with a fair market value of $3 million.
According to Boone County Assessor Tom Schauwecker, overvaluations are generally not common. He said he declined to comment specifically on Kraft’s appeal because he doesn’t comment on pending property tax appeals.
Last month, the Board of Equalization voted not to the amend the assessed valuation. The company had a month to appeal to the state tax commission, which it has now done.
The Chapter 100 tax abatement agreement requires Kraft Heinz retain at least 300 jobs that are paid at or above the minimum wage decided by the Department of Economic Development. That figure is $17.44, or $36,284 annually.
If the minimum 300 qualifying jobs is not achieved, the abatement is adjusted. If it drops below 300, the abatement is 50 percent. If it drops below 250, abatement is adjusted to 25 percent. Below 200 qualifying jobs and the abatement is adjusted to zero and the agreement terminates.
ABC17 News has reached out to the taxing entities, which include Columbia Public Schools and the city of Columbia about the appeal. Daniel Boone Regional Library district has a stake but spokeswoman Mitzi St. John said that while they are aware of the appeal, they didn’t have a comment.
ABC17 News has also reached out to Kraft Heinz and its legal representation to find out why it made the appeal.
The evidentiary hearings in the appeal are set to being July 13 at 9 a.m. in the Boone County Courthouse. In the meantime, the state tax commission requires Kraft to pay property taxes timely even as the appeal is pending.
