Petrogas could owe Whatcom County $15 million in taxes

The Washington Supreme Court upheld an appellate court decision July 12 that could require Petrogas Pacific LLC to pay $15 million in taxes for Whatcom County.

Whatcom County assessor Rebecca Xczar told The Northern Light in an email that the ruling means Petrogas will now owe tax on the difference in value plus interest of the reduced amount it paid on property tax from 2016 to 2019. This will benefit all property owners in Whatcom County next year who have been paying more tax because Petrogas has been paying a reduced amount, Xczar said.

“I am very pleased to see this come to a final resolution,” Xczar said. “As there are still four more years of appeals outstanding, I am hopeful Petrogas will withdraw all or most of those appeals, as the issues raised are similar.”

The Washington State Board of Tax Appeals (BTA) grouped the appeals for 2016, 2017 and 2018 together to be heard as one case. The case was finally heard in 2021 and the BTA decided in favor of the assessor’s office for the 2017 and 2018 values and reduced the assessor’s value for 2016. Petrogas appealed this decision, and it went to the Court of Appeals in 2022. 

The appellate court upheld BTA’s decision, and the state supreme court upheld the court’s decision following another Petrogas appeal. 

AltaGas, the parent company of Petrogas, still has four more years of appeals outstanding and did not comment directly on the decision.

“We are aware of the ruling and are reviewing it at this time,” an AltaGas spokesperson told The Northern Light in an email.

Petrogas Pacific LLC and Petrogas West LLC own and operate a liquefied petroleum gas (LPG) terminal and wharf at Cherry Point near Ferndale. Petrogas acquired the terminal from Chevron for $242 million in May 2014 and the wharf from Intalco Aluminum for $122 million in September 2016, according to the lawsuit.

The terminal is connected to two local refineries and can export and import up to 30,000 barrels a day via rail, truck and pipeline.

Xczar said Petrogas has appealed its assessed values every year since 2016 and only paid tax on what they stated the property was worth since the appeals started.

Petrogas has more appeals for tax years 2019 to 2023, which Xczar said it will likely owe back taxes for those years as well. Xczar said Petrogas owes over $8.2 million for tax years 2016-2017 through 2018-2019 and is expected to owe a total of $15 million through 2023.

In January, Petrogas agreed to pay $4 million and make operational changes to its Cherry Point facility after the Northwest Clean Air Agency (NWCAA) alleged that the facility had undertaken projects without obtaining required permits and reporting emissions, according to previous reporting by The Northern Light. Whatcom County and Petrogas agreed on a permitting pathway in March for the terminal to obtain the permits it failed to and prepare an Environmental Impact Statement (EIS) under the Washington State Environmental Policy Act (SEPA).

AltaGas took full-ownership of Petrogas in July 2022.