Energy and Environment Reporting for Texas

No Tax Break for Valero

Reshma Kirpalani / KUT News/Reporting Texas

A woman protests against the proposed tax exemptions for Valero Energy Corporation in November.

A request for a tax refund by the Valero Energy Corporation, one of the world’s largest oil refiners, has been rejected by the Texas Commission on Environmental Quality (TCEQ), the Associated Press reports. Valero asked for the money under a state law that says companies don’t have to pay taxes on equipment that reduces on-site pollution.

The request was originally made in 2007, when Valero bought the equipment. The money, potentially as much as $92 million, would have come from property tax refunds in appraisal districts. Which means it would have been taken back from cities and schools that are already struggling.

The Associated Press obtained a letter dated December 14 from the executive director of the TCEQ, Mark Vickery, to Valero’s six refineries in Texas. Vickery wrote that the company “does not demonstrate that the hydrotreating equipment provides a partial environmental benefit at the site.”

More from the Associated Press:

“The agency’s move indicates it will also reject 10 other similar requests. An AP analysis of the applications and tax information indicated that if granted, Texas school districts and municipalities could be forced to refund up to $135 million. Some county officials estimate that if granted, the tax breaks would have resulted in a loss of revenue of about $100 million to regions where the refineries are located.”

StateImpact Texas looked at the arguments for and against the tax break in October, noting that the upgrades installed by Valero didn’t actually reduce pollution near the refineries as required by the law. And the company had billions in profits this year, leading some to question why they would risk a negative image over less than a hundred million dollars. At the time Bill Day, spokesman for Valero, told StateImpact Texas that “we’ve always paid our taxes, we have a problem overpaying our taxes. “Is overpaying our taxes in the interests of the community? Should the teachers in Houston overdonate their time?”

At a protest at the TCEQ in November, we reported on efforts by parents, teachers, and environmental groups to oppose the tax refund that would take money from local tax districts. Some 150 people showed up. “We have shorter classes, we don’t have extra classes like we used to,” 13-year-old Destiny Gonzalez told StateImpact Texas. “The national academic league I wanted to compete in this year we no longer have, and we’re literally scrambling out of the room because when the bell rings it’s shorter than it was this year.”

The company has 20 days from Dec. 14 to appeal.


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