MADAWASKA – An oversight at Fraser Papers Inc. last May – the company missed a 60-day deadline for filing papers with the state – could have cost the company $1.6 million in state reimbursement of property taxes. But town and state officials have come to the rescue.
The company, like hundreds of other businesses across the state, qualifies for a reimbursement of property taxes on business equipment and machinery purchased after April 1, 1995 under a program called Business Equipment Tax Reimbursement. The program is good for up to 12 years for qualifying equipment.
To get the reimbursement, companies must file requests with the Maine Revenue Services within 60 days of paying property taxes to municipalities in which they operate.
On March 8, Fraser paid the Town of Madawaska $4,862,534 in property taxes for 1999-2000.
The company’s deadline to file papers for the BETR reimbursement was May 8. The application was filed 11 days late, disqualifying them from a $1.6 million reimbursement.
To rectify the problem, the Madawaska Board of Selectmen abated Fraser’s taxes for 1999-2000, and then gave the company a supplemental tax bill for the same amount.
Checks for the taxes were exchanged, explained Linda Cyr, Madawaska’s bookkeeper.
“We gave them a check for the taxes they paid last May, and they in turn gave us a new check for their property taxes,” she said. “It was a wash.”
Now Fraser has a new deadline to get the reimbursement from the BETR program, 60 days from Nov. 28.
“The papers will be hand-delivered to the state Friday,” Rosaire Pelletier, Fraser’s comptroller, told selectmen. “James Good will deliver the papers himself.”
Good, a company attorney from Portland, was at the selectmen’s meeting. He was flying back to Portland on Thursday and was to deliver the papers to Augusta.
Cyr said the agreement for Fraser to get the state BETR reimbursement was worked out between the company, state officials and town officials.
The unanimous decision of the Madawaska Board of Selectmen to abate Fraser’s taxes and create a new supplemental tax bill, also was a boon for 102 other Madawaska taxpayers. The move wiped out property tax liens issued to people who did not pay their taxes on time.
“We have to do another tax commitment,” Cyr explained. “Under state law, all unpaid 1999-200 taxes were wiped out because of the new tax commitment.”
In effect, all unpaid taxes in Madawaska also were abated.
Cyr’s office has to notify the 102 taxpayers, 94 of whom had liens placed against their real estate, of the action. She also has to send new tax bills to the 102 residents.
The action only affected those residents who had not paid their taxes by Nov. 29.
Cyr’s office also must send the 102 residents a supplemental tax bill. Those residents now have 60 days to pay their 1999-2000 tax bill, without interest and lien fees.
In eight months, Cyr’s office will have to start the lien procedure again for those taxpayers who do not pay their taxes before the deadline.
It means a lot of work for Cyr and personnel in her office.
She estimated that the work will take about two weeks of office time.
“It needs to be done, and it will get done,” she said. “Other workers in the town office have offered to help in the process.”
Pelletier said Fraser would pay for the extra work needed to go through the process.
David Ledew of the Bureau of Taxation in the Maine Revenue office explained the BETR program. He would not discuss the situation with Fraser, citing confidentiality laws.
He said the property tax reimbursement affects most business machinery and equipment.
“It was a huge mistake, but it was made during a time when many things were going on in our office,” Pelletier said. “It’s a big relief for us.”
Fraser pays 66 percent of the property taxes in Madawaska. In effect, the $1.6 million reimbursement from the state brings their share down to 43.5 percent. The town loses nothing because the reimbursement is from the state’s general fund.
The move by selectmen wasn’t without reservation.
“I can’t vote for this without knowing that no employee of Fraser will be reprimanded, suspended or let go because of this,” Selectmen Michael Violette, a Fraser employee, said.
He was assured that no action would be taken against any employee involved in the oversight.
“While we are doing Fraser a favor,” Vernon Doucette, chairman of the Board of selectmen, said, “We are also doing a favor to more than 95 other people in Madawaska.”