By Business Courier of Cincinnati

Duke Energy Ohio struck a deal with the state of Ohio to keep more tax dollars flowing to local communities while the utility appeals its 2009 assessment for certain property taxes.

Duke said last month it was going to pay only 80 percent of its 2009 assessment for taxes on tangible personal property â¿¿ vehicles, equipment, utility poles, electric wires, etc. â¿¿ while it appeals the stateâ¿¿s valuation of those assets. Withholding such disputed taxes is permitted under Ohio law.

That raised concerns among local school district and government officials who rely those state tax receipts. Many of them are already grappling with tight budgets and impending deficits because of lower tax receipts triggered by the recession.

Under the agreement announced Wednesday with the Ohio Department of Taxation, Duke said it will pay 90 percent of the taxes due for 2009, including the taxes it has already paid for the first half of 2009. In exchange, the state has agreed to extend the date for an administrative hearing on the companyâ¿¿s petition for a reassessment.

⿿Duke Energy and the Ohio Department of Taxation clearly have differing opinions on the value of our personal property, and that⿿s an issue that the appeal process will resolve,⿝ said Julie Janson, president of Duke Energy Ohio. ⿿This compromise gives everyone some breathing room as we work through the appeal process.⿝

Duke paid the first-half payment for 2009 in full based on the stateâ¿¿s assessment. The second-half payment is due this summer, which prompted the company to take action by reducing its payment on the disputed amount, it said. If itâ¿¿s determined that the fair value of the personal property is lower than the assessment, communities would owe Duke a refund on what the company overpaid, plus interest. If that happens, Duke will work with communities to develop a payment schedule, it said.

Duke provides electricity to about 685,000 customers and natural gas service to 400,000 customers in Southwest Ohio.

Copyright 2010 American City Business Journals

Copyright 2010