The city of Andover is appealing a property tax bill of $86,000 that was assessed on a new library the city opened earlier this year.
Mayor Ben Lawrence said Wednesday the city filed for a tax exemption on the library in March and Butler County approved that exemption.
The state, however, rejected the exemption, leaving the county no choice but to send the $86,000 bill to Andover.
Lawrence said he assumes the exemption was denied because Scooter's Coffeehouse — a for-profit business — occupies a small space in the library.
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Information clarifying the coffee shop's role in the library was faxed to the state Wednesday, Lawrence said.
He likened the situation to the state taxing the property of all the high school football stadiums around the state because they have concession stands.
"It's just an amenity, like going to a football game and sipping a Coke," Lawrence said of the coffee shop.
In the meantime, he said, the City Council met Tuesday with the shop's owner, Jason Mayginnes, and asked him to close his business in the library until after the appeal is resolved.
"Obviously, this isn't going to be heard until after the first of the year," Lawrence said. "In case we lose the appeal, we don't want to create another tax liability of $86,000 for 2010.
"If we win the appeal, we'll ask them to come back. I'm not sure if they will. The business owner is pretty upset and understandably so."
Mayginnes acknowledged that he will shut down his business in the library after today. He said he has five employees — one full-time and four part-time.
He declined to comment on whether he would return if the city wins the appeal.
Lawrence said he hopes the appeal will be heard within 30 days.
Because the city recognized there was a small chance the state might respond as it did, Lawrence said the city had Mayginnes sign an agreement that he would pay any property tax liability resulting from Scooter's presence in the library.
During Tuesday's meeting, Mayginnes was asked whether he would write a check for $86,000. He declined and agreed to close down the business.
"He didn't have a lot of choice," Lawrence said.
Lawrence is perplexed about why the exemption was denied. He said he thinks the state is becoming very tight-fisted with tax exemptions as the result of the state's budget shortfall.
"The last thing we want to do is run a small business out of town," Lawrence said. "But we're not going to put this business's interest in front of the citizens."