By By Lisa Tindell – news editor
Escambia County could be facing the loss of millions of dollars in revenues if Exxon Mobil Corporation is favored in court. In addition to losing future revenues, the county may have to pay back as much as $4 million if the company's petition is granted.
Exxon Mobil Corporation is the largest company in the world Sanks said. The company has experienced record-breaking profits in recent years.
The Escambia County Commission won't be the only group in the county to suffer if the corporation is successful in their quest for refunds.
The funds the county usually receives from the oil and gas severance tax annually is approximately $3 million. That money is distributed among many departments in the county including the Escambia County school system, the Brewton City school system, the Escambia County Industrial Development Authority
The case involves what Exxon Mobil believes is reasonable adjustments to the cost of natural gas production. The corporation pays a value tax based on the value of the fuel at the wellhead Sanks said. The refunds sought by the corporation are based on a work-back method that allows the cost of production, including direct and indirect costs, to be considered in the amount of taxes paid to counties.
A final order in the case was issued Thursday by Bill Thompson, chief administrative law judge in a Montgomery court.
In the order Thompson found in favor of Exxon Mobile and explained the amount of overpayment by the company.
In the order Thompson said Exxon is due refunds from Big Escambia Creek production fro January 1992 through December 2000 in the amount of $6,184,670.58 plus interest of $5,213,314.34 through December 31, 2006. Also refunds from the Little Escambia Creek production for the same period in the amount of $703,658.32 plus interest of $582,767.47.
The final order of Thompson was immediately appealed by the Alabama Department of Revenue. The appeal has been placed into the expedited case management system Sanks said. The case should be completed within 12 months. That appeal will be heard in the Mobile County Circuit Court since Exxon Mobil has Mobile County listed as their base of operations.
If the appeal is granted to the Alabama Department of Revenue, it is expected to Exxon Mobil would appeal that decision.
The appeal by Exxon Mobil would be heard at the State Supreme Court level Sanks said.
The county expects to continue receiving oil and gas severance taxes during the process but will certainly keep a close eye on the case proceedings Sanks said.