If you recall the BellSouth property tax dispute which was finally resolved through legislation in the 2000 Regular Legislative Session, you will understand the basis of the protest which is currently undertaken by pipeline companies. Gas pipelines are considered public service properties, and are assessed at 25 percent of value, according to the Louisiana Constitution. These companies consider this assessment level unfair, since regular business properties are assessed at 15 percent of value.
Pipelines argue that since deregulation, there is no justification for the higher tax rate.
However, since Louisiana law requires them to be taxed at 25 percent, it will require either a successful lawsuit or legislation to change the rate for pipelines. The impact of such a change could cost local governments millions of dollars. LMA leaders hope this issue can be resolved in a revenue-neutral manner, similar to that used for telephone companies. At this point in time, the only measure required of municipalities which receive tax payments under protest is to place the funds paid under protest in an interest-bearing bank account. These funds cannot be disbursed until the lawsuit is resolved.