A Texas-based energy company is suing Mohave County for a refund in taxes paid since 2010. Now the Mohave County Board of Supervisors may seek to enlist the Arizona Attorney General’s office in the county’s defense.

The lawsuit stems from a dispute between Calpine Energy and the Arizona Department of Revenue in reference to the valuation of the South Point Energy Center, which is located on Fort Mohave tribal land.

According to a complaint filed Oct. 5 by Phoenix-based attorneys Pat Derdenger and Karen Lowell in Arizona Tax Court, the company paid more than $800,000 in property taxes on its facility in 2019. But because the South Point Energy Center lies on tribal land, Derdenger and Lowell argue that neither Arizona nor Mohave County have a right to tax the facility.

“Federal law preempts and prohibits state and local governments from assessing, imposing or collecting ad valorem property taxes on permanent improvements to land leased from Indian tribes regardless of ownership of the improvements,” the complaint said. “The defendants’ property taxes on the facility for property tax year 2019 were illegally assessed, imposed and collected.”

According to Deputy Mohave County Attorney Ryan Esplin, this isn’t the first time Calpine has filed suit against the county for taxing the South Point Energy Center.

“Calpine has appealed the Arizona Department of Revenue’s valuation of its property since 2010,” Esplin said. “Each year when Calpine files its complaint, we ask the Board of Supervisors to appoint the Arizona Attorney General to represent Mohave County in the litigation.”

Calpine’s argument has been dismissed recently in trial court, Esplin said, and the company has recently appealed that decision in the Arizona Court of Appeals. A ruling has not yet been given on that case.

“The outcome of the appellate court decision may have a significant impact upon the county and applicable taxing districts,” Esplin said. “Not only is there a possibility of refunding taxes for 2010 to 2019, but also the Arizona Department of Revenue’s ability to centrally assess Calpine in future tax years. It’s a case of high interest, and we are actively working with our attorneys to defend our position.”


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