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Kennedy Berkley Lawyers Secure Important Victory on Behalf of Grain Industry

Kennedy Berkley’s Klint Spiller and Marc Kliewer won a significant victory for the grain industry in the Kansas Supreme Court.

Earlier this month, the Kansas Supreme Court denied a petition seeking review of the Kansas Court of Appeals decision affirming a lower court’s finding that machinery and equipment owned by the Dodge City Cooperative Exchange (the Co-op) was not taxable property.

The long-running dispute stems from legislation that was passed in 2006 that exempts all new commercial and industrial machinery and equipment from property taxation in Kansas. Many Kansas counties, however, classified grain elevator machinery and equipment as real estate, which resulted in grain companies having to pay higher property taxes than required by law.

The Co-op challenged these classifications in 2013 and 2014 by appealing to the Kansas Board of Tax Appeals (BOTA). In 2015, BOTA upheld Gray County’s taxation of the Co-op’s machinery and equipment as real estate. The Co-op appealed the BOTA decision to the District Court of Gray County. The District Court reversed BOTA’s decision and ruled that the Co-op’s machinery and equipment had been improperly taxed.

The County appealed to the Kansas Court of Appeals. In late July 2022, the Court of Appeals issued its decision upholding the District Court’s decision in favor of the Co-op. The Court of Appeals opinion noted that “(t)he district court correctly concluded that the various pieces of equipment are not fixtures.”

The decision by the Kansas Supreme Court to deny the County’s petition for review in this case signals to county appraisers that grain elevator commercial and industrial machinery and equipment should be appropriately classified as personal property and not as real estate.

The Co-op is represented by Klint Spiller and Marc Kliewer.

Read more on the case here.

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