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Fair faces hefty tax bill

LANGLEY — The Island County Fair Association may soon find a tax bill in the mail for roughly $2,700.

Fair board chairman Dan Ollis told the fair board Tuesday that the Island County Fair Association may have to pay three years worth of property taxes on a

10-acre parcel the association sold last year.

Ollis said county officials were considering charging the association for back taxes on a piece of land that was donated to the fair by the Waterman family in the mid-1980s.

The land was in possession of the fair association for two decades, but had wrongfully been declared tax exempt from most taxes at the county level. Fair officials paid only the levy for forest firefighting protection in recent years — roughly $15 annually — but no property taxes.

Island County Assessor Dave Mattens said he sent a letter to Ollis and association president Diane Divelbess last month to tell them that the Island County Fair Association will receive a bill from the Island County Treasurer’s Office in about 30 days for back taxes on the property.

Mattens said the challenge was to determine how far back the county could go in collecting taxes that had not been properly paid.

A statute of limitations prevents the county from seeking more than three years of unpaid taxes.

After discussing the issue with the state Department of Revenue, Mattens said the county will ask for taxes dating back to 2003, which would add up to about $2,700.

The assessor counted three year from the date the property was sold in January of 2006, counting the sale’s date as the point of discovery of the error.

Mattens said $2,700 is an estimate. He has plans to discuss the actual amount with the treasurer on Monday.

Mattens said that while unexpected tax bills would be a shocker to anyone, he said the association should pay the taxes.

“In a show of good faith, they should pay it,” Mattens said. “They got away with not paying taxes on the property for 20 years.”

He added it is in the best interest of the association to pay the back taxes.

“Bottom line is, if they contest, we could put a lien on the property,” he said.

Mattens said his office has to treat everybody equal.

“To no fault of their own, they got in this situation,” he said. “What’s fair?”

If the property wouldn’t have been wrongfully tax exempt, the association would have paid an estimated $11,000 to $19,000 over the course of two decades. Mattens did not want to place blame for the tax-gap oversight.

“How did that happen? Nobody knows. Who were the players? Who were the makers 20 years ago? Nobody knows,” Mattens said.

Because the land was never used for a fair-specific purpose, the association had no basis to be excluded from taxes on the donated land.

County officials learned that taxes had not been paid on the property after stories in The Record earlier this year detailed the association’s sale of the donated property.

The original quit claim deed for the property said it was donated to the Island County Fair, and thus would have been county property and exempt from most taxes. But fair officials said the land was actually donated to the fair association, and not the county.

The issue was finally resolved after Margaret Waterman, who donated the land in 1986, signed an affidavit earlier this year that said she intended to donate the land to the Island County Fair Association and a new quit claim deed was filed.

Once the ownership issue was cleared up, county officials eventually found that the land donation had been wrongfully tax exempt.

Earlier this week, Ollis said that some county officials have said the association doesn’t need to pay the back taxes because the tax exempt status was caused by a clerical error. Others, however, have said the taxes should be paid.

The donation of the Waterman property to the fair came under scrutiny when critics of the fair association began asking about donations that fair officials had accepted to fund their legal battle with the city of Langley over an road easement.

Ollis said Thursday the association has not yet received the bill for back taxes.

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