Tenants claim port overcharged for five years
June 10, 2008 · Updated 6:29 PM
POULSBO Two evicted Poulsbo Marina tenants are still making waves this week as they accused the Port of Poulsbo of overcharging its tenants since 1999.
Nan Mader and her husband Charles Leader presented papers at the April 3 port board of commissioners meeting that allege the port has been collecting too much leaseholder tax from its live-aboard tenants over the past five years.
Leaseholder taxes are the property taxes that are charged to renters of public lands. Presently the leaseholder tax is 12.84 percent of the contract rent or hypothetical property tax, whichever is less.
According to the Washington Administrative Codes (WAC), Because the leasehold excise tax is intended to equalize treatment between private property owners and lessees of public entities, the amount of leasehold excise tax should not exceed the amount of property tax that would be due if the leased property was privately owned.
The WAC also states that leaseholder taxes are charged on rental expenses only, and not on other costs such as utilities, security, repairs or maintenance.
Mader and Leaders complaints hinge on the WAC. They first argue that the port has been overcharging tenants by charging leaseholder taxes on moorage, utilities and live-aboard fees.
Second, they claim that in 2003 the Kitsap County Assessors Office tallied the value of the Port of Poulsbos 15-acre tax parcel at $166,000. In a letter dated April 1 to port commissioners, Mader claims that under this assessed value, the leaseholder tax on a sample 44-foot by 14.25-foot slip would be approximately $1.84 per month, and yet that same slip is actually being charged $19.61 in leaseholder taxes since the port is charging 12.84 percent of the contract rent, rather than the hypothetical property tax.
The letter further claims that the sample slip has been overcharged since 1999 and the port owes the sample tenant $915.54 in back taxes.
We respectfully ask the port to address with each tenant how you will correct the overcharge, the letter states.
The issue of leaseholder taxes is one that the Port of Poulsbo has been looking into, said Port Manager Ed Erhardt.
In January, the Port of Bremerton was forced to reimburse its Port Orchard Marina tenants almost $250,000 when tenants pointed out that they had been overcharged on leaseholder tax. Erhardt said that since the incident in Port Orchard, ports across the state had been looking to make sure they had been properly charging taxes and several have found they also owe their tenants reimbursements.
Commission Chair Mike Winters said on April 4 that he consulted with the Department of Revenue and Kitsap County and was told the Port of Poulsbo was correctly assessing leaseholder taxes.
Were doing it based on the normal procedures, Winters commented.
Mader and Leaders April 1 letter requested that a meeting be set up between port staff, tenants and a representative from the Department of Revenue. However, Winters said in light of the information he had received, and that hed be passing on to the couple, he did not think that would be necessary.
But if shes not satisfied with our answer well certainly discuss it as long as Glen Gilbert is back, Winters added.