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Under new Woodbury County measure, wind turbines would be taxed as property rather than utilities
Credit: Woodbury County advances measure to tax wind turbines as property | Caitlin Yamada | Sioux City Journal | Dec 8, 2021 | siouxcityjournal.com ~~
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SIOUX CITY – The Woodbury County Board of Supervisors on Tuesday approved the first reading of an ordinance that would change the manner for taxing future wind turbines in the county.
The ordinance would treat wind turbine farms as property for tax purposes, rather than as a utility under state law. Half of the counties in Iowa have adopted such an ordinance, said David Gleiser, the county’s director of the Rural Economic Development Department.
The county assessor would value wind energy properties following a leveled exemption schedule, under the ordinance.
In the first year, a property owner would pay zero percent of the net acquisition cost. For the second through sixth years, the percentage would increase by five percent each year. In the seventh year, the percentage would be capped at 30 percent of the net acquisition cost and remain at that level for subsequent years.
“Some might looks at this exemption schedule and say. ‘That’s a really big advantage for the developer and why would you willingly not collect 70 percent?’” Gleiser said.
Without the ordinance, he said the state would assess wind turbines as a utility and the taxes collected would return to the county as replacement tax revenue.
“This would be considerably less than the county could receive if it adopted this 427B ordinance,” he said.
For example, Gleiser said a 100 megawatt project currently would generate roughly $210,000 annually in replacement tax revenue for the county, depending on the production. With the proposed ordinance, Gleiser said the same project with the 30 percent cap would generate roughly $1 million.
In 40 years, the project would generate $8.4 million for the county under current law, versus $40 million with the new ordinance.
Gleiser said the state has indicated the replacement tax revenue likely will go away in three years. He said if a developer is successful and submits an application in three years; the county would not receive any replacement tax revenue, and would receive an unknown form of revenue.
Gleiser’s department called 55 counties regarding this ordinance and said all adopted it prior to having any wind energy developments.
This is a companion ordinance for a commercial wind energy ordinance passed earlier in the year, Gleiser said. The supervisors approved an ordinance in July to add protections for the county and private citizens regarding commercial wind energy, including setback distances and safety for secondary roads.
Two additional public hearings will take place on Dec. 14 and Dec 21. A final vote will take place on Jan. 11 to either approve or deny the ordinance.
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