Terminal operators at the ports of Los Angeles and Long Beach are battling county tax assessors over how much they should pay in property taxes.

Tax assessors are asking the state Board of Equalization to reverse a major tax break the shipping industry pushed through three years ago. The rule makes it easier for terminal operators who invest large amounts in their port facilities and rarely leave to argue that they are short-term leaseholders and should receive reductions in their tax bills.

“Some people had been playing games with this, saying they were only short-term leaseholders when everybody knew they were in it for the long term,” said Board of Equalization Vice Chairman Claude Parrish, who is pushing for the change. “This is about fairness, about people not skipping out on taxes.”

The Board is set to consider the proposed changes in January. Meanwhile, terminal operators are mounting a statewide letter-writing campaign to halt the proposed changes, accusing tax collectors of a money grab.

“We have no problem with paying our fair share of taxes. But the California Assessors Association is having visions of green flash before their eyes,” said Michael Jacob, vice president of the Pacific Merchant Shipping Association.

At stake are millions of dollars in property taxes on leases at ports and other marine-related facilities throughout the state.

At the ports of Los Angeles and Long Beach, the L.A. County Assessor’s office estimates that the total assessed value of harbor property leases would drop to $2.1 billion from the current $3.5 billion if the tax break is upheld. That translates into $15 million in lost property tax payments made by port leaseholders each year.

Major terminal operators say their taxes could jump by as much as $3 million apiece should the assessors be successful. Higher taxes, they add, would slow progress on environmental improvements and measures planned to reduce the impact of their operations on surrounding communities.

“This is a giant cat-and-mouse game that we’re seeing played out everywhere from downtown Los Angeles to the ports ever since Proposition 13 passed,” said Larry Kosmont, an L.A.-based economic development consultant. “Companies are always looking for ways to lower their tax appraisals while tax assessors seek every dollar they can get ahold of.”

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The full story

is available in the Oct. 10 edition of the Business Journal.