03/29/2024
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The Clarkton Town Board met on Tuesday night and heard from Bladen County Economic Development Director Chuck Heustess regarding a tax issue involving the Gildan company. The matter was initially discussed during the June meeting and it was decided to contact Heustess regarding the matter.
“A couple of people have called me asking about the valuations at Gildan. I think you are being told by Gildan that you owed them a reimbursement for some taxes paid. This stems from about 18 months ago when all of this started,” said Heustess.
He explained the issue began when a new employee made an error in calculating the depreciation of equipment. The error impacted the tax valuation reported by the company.
Heustsess said the matter had been resolved with the county but did not realize the matter involving the town had not been resolved. He said  his staff and Bladen County Tax Assessor Renee Davis is willing to assist Clarkton Town Clerk Kentrina Woods with the matter.
Heustess explained to the board that in 2014, Gildan reported a valuation of $8 million. In 2015, Gildan reported an original value of $20 million. “I think what happened then is they reported equipment and forgot to take some off of the books. That plant is pretty much full so when they invest in equipment, they are taking some out at the same time,” said Heustess.
He said, for example, if the company invests $15 million in new equipment it does not necessarily translate into $15 million in tax value as they may take $4 million worth of equipment out of the plant which equates to $11 million in tax value.
Heustess said in 2016 Gildan turned in a value of $10 million but in reality it should have been reported as $16 million. He said in 2016, he spoke with Gildan officials and the company was very cooperative in correcting the error. Heustess said the company reviewed the matter and it was learned the company had hired a new employee to handle the reporting. Heustess said the new employee had gotten confused between the type of depreciation involving income on federal taxes and property tax depreciation.
He explained when a business purchases new equipment, once it is installed, the value of it depreciates. The next year the equipment will depreciate again. The tax office has a guide the staff uses to determine how much a particular piece of equipment depreciates. Heustess emphasized that depending on the type of equipment, when it reaches 60 percent of its value, it will stop depreciating and hold that value until it is replaced.
“What she (the new Gildan employee) did was depreciate it like you would on income tax and take the whole value off. So when we found out that was wrong and we explained it to them, we asked why they had this huge depreciation. They talked to the lady and figured out why. So they went back and gave us (the county) what the correct value should have been,” said Heustess.
He said he performed some rough calculations based on information he received from Town Clerk Kentrina Woods and in 2015 the town would have owed Gildan $20,000 and in 2016, Gildan would have owed the town $30,000. Heustess assured the board Gildan officials will work with the town to rectify the situation.
Town Attorney Cliff Hester asked if the information Heustess was referring to was supplied by the Bladen County Tax Office and Heustess said, “Yes.”
Heustess said county officials uncovered the error, Bladen County Tax Assessor Renee Davis sent a letter of discovery to Gildan explaining they owed the county more money and the company paid the amount due. Heustess recommended the town write a similar discovery letter requesting the money owed.
Heustess also said he has been asked why it is that when a company makes an investment in new equipment it doesn’t always equal the same amount in tax value. Heustess said one reason is the depreciation issue and another is when a company installs new equipment they are also taking old equipment out.
Town Attorney Cliff Hester asked how many years is equipment allowed to depreciate. Heustess said it depends on the type of equipment. He said the tax office has a guide they utilize to determine the amount of depreciation and how long a piece of equipment can be depreciated.
Heustess also said when a company installs new equipment, it can take a while to see the investment on the tax records. The reason for that is because the tax value is set based on what is in place on January 1 of that year. Heustess said, for example, if a company installs new equipment on January 2, 2017, it would not necessarily be placed on the tax books until the January 1, 2018.
“The great thing is they are still installing equipment,” said Heustess.
Town Attorney Cliff Hester recommended offsetting the amount Gildan owes the town from 2016 and the amount the town owes Gildan from 2015. Hester said basically, Gildan owes the town of Clarkton $8,000 because of the errors. Hester said there is also a question of whether or not any interest is due on the amounts owed.
Hester said he tried to contact town auditor Bryon Scott regarding the matter but he was unable to reach him prior to the meeting.
In other business, the board held a closed session to discuss personnel matters and for contract negotiations. In open session, the board voted to approve the contract with the Bladen County Sheriff’s Office subject to the addition of changes discussed. The board also voted to approve changes to personnel rules.

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