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Bankrupt Express Grain owes $72,000 in delinquent property taxes, despite benefiting from ten year exemptions

Wednesday, June 22, 2022, 5:46 pm News Flash Archive

When Express Grain declared bankruptcy on September 29, 2021, the court allowed it to continue to operate as a "debtor in possession," meaning it could carry on business, but did not have to pay its debts incurred prior to filing bankruptcy.

But EG also hasn't paid certain debts it incurred after it filed bankruptcy. EG still has not paid most of its local real property taxes from 2021, even though those taxes were incurred as regular business expenses after the bankruptcy petition was filed.

Those taxes, totaling $95,243.69, became delinquent on February 1, 2022. Since then, penalties began to accrue at the rate of 1/2 % per month.

So far, EG has paid $24,537.03 in taxes and penalties, but it still owes $72,508.24.

EG owns 19 parcels of property in Leflore County. Each parcel is appraised and assessed according to state law, and the taxes computed accordingly. The property tax is based upon the land value, as well as the value of any buildings and permanent structures and improvements thereon.

EG's real property is currently appraised at $11,713,188. To see the property tax receipts for each parcel, how much has been paid, and how much is still owed, click here: Express Grain 2021 Tax Receipts

If $95,243.69 seems like an awful low tax to pay for EG's vast holdings, that's because almost all the real property owned by EG has a ten year tax exemption, which means that EG is excused from paying county and city property taxes. It continues to pay public school district taxes and certain state-imposed taxes.

The local property tax millage rates are as follows:

70.06 - County millage rate
44.69 - Public School millage rate
54.26 - City of Greenwood millage rate

But because EG is exempt from county and city taxes, it only pays an effective millage rate of 52.02 mills. Most property owners in Greenwood pay 166.51 mills, while most owners in unincorporated parts of Leflore County pay 114.75 mills.

If EG had been required to pay the full tax rate, it would have owed $217,562.57, over twice as much as it owed in 2021 under its exemptions.

EG's property tax exemptions go back to late 2009, when the city and county began the process of granting a tax exemption on EG's Sidon facility. EG purchased the oil mill in Greenwood in late 2015, and obtained a property tax exemption on those facilities in subsequent years.

According to Leflore County Tax Assessor Leroy Ware, 2021 was the final year of the exemption for EG's property in Sidon. The exemption on the oil mill and the Minter City property have another 4 or 5 years to run.

However, once the property changes ownership, the exemptions will be void. The new owners, presumed to be FSB Companies and Thoroughbred, will have to apply for new exemptions, if they qualify to receive them.

Presumably, when the sale of EG's property closes, which should happen by the end of June, the delinquent property taxes will be paid by either EG or the new owners.

To read all our coverage of the Express Grain bankruptcy case, see here: Index of Express Grain articles


John Pittman Hey
The Taxpayers Channel

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