Wheatland Industries challenging constitutionality of tax refund law

Wheatland Industries, LLC, owner of the Madrid ethanol plant, filed a suit in federal district court challenging the constitutionality of a Nebraska tax refund law.

The suit names the county, several county officials and the taxing entities of Madrid, Perkins County Schools, Perkins County Hospital, ESU 16, Mid-Plains College and the Upper Republican NRD as defendants in the suit. 

The property valuation of the ethanol plant and a subsequent ruling by the Nebraska Supreme Court serves as the basis for the suit.  The 2017 valuation of the plant by the county, $16.3 million, was challenged by Wheatland Industries. 

The issue went before the Tax Equalization and Review Commission who concluded the valuation should have been $7.3 million.

The county appealed that ruling to the Nebraska Supreme Court and the ruling was upheld. 

This meant the taxing entities in the county needed to refund nearly $118,000 in taxes that were overpaid by Wheatland. 

In this situation, Nebraska statute allows those taxing entities to take up to five years to repay the funds, with no interest accruing. 

The suit alleges that those provisions make the law constitute an illegal taking of property.

The U.S. and Nebraska Constitutions both provide that private property shall not be taken for public use without just compensation. 

The suit also contends that the five-year period the taxing entities have to pay back the refunds denies Wheatland Industries of due process. 

Wheatland Industries noted the taxing entities had already held their money for two years before the case was settled by the state Supreme Court.

While some of the entities have already begun to budget for repayment of the funds, others have already repaid small amounts due. 

Wheatland Industries said in the suit nothing compels the entities to pay back money before the five-year, Jan. 3, 2025 deadline provided for in the statute. 

Perkins County Schools will repay the largest amount of tax money—$44,252.13. 

The Village of Madrid will  be hit with a repayment of $31,363.45. 

Perkins County will take the next biggest hit at $19,775. 17.

In addition, Wheatland Industries has already paid their property taxes for 2018 and half of 2019.

The county’s valuations of the plant for those two tax years has also been contested by Wheatland. The taxes for 2019 were based on a valuation of $13.3 million.

If Wheatland is successful in their appeal, they will be entitled to more property tax refunds for the 2018 and 2019 tax years. 

If the statute remains in effect, those refunds would not be due for five years from the date of settlement. 

Defendants named in the suit include Perkins County Treasurer Julie Sestak, Perkins County Assessor Peggy Burton, Village Of Madrid, Madrid Cemetery, Madrid Fire District, Educational Service Unit No. 16, Mid-Plains College, Upper Republican Natural Resource District, Perkins County Hospital, Perkins Board Of Equalization and Perkins County.

During last week’s commissioner meeting, commissioners discussed that since this is a constitutional issue, it’s possible the Nebraska Attorney General’s Office could pick up the case and defend it. 

However, no determination on that has been made by the state. 


The Grant Tribune-Sentinel

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