Supervisors earlier this week denied the second and final taxexemption request from Columbus Lumber Co. after an opiniondelivered from the Mississippi Attorney General’s office deniedcounty officials the authority to do so.

The response to the county’s inquiry came in a one word answer:”No.”

Board attorney Bob Allen said the short opinion, which backed upthe rejection with some legal analysis, basically left supervisorswith no choice but to deny the $63,000 ad valorum tax break. Thebreak had been sought by new owners of the Brookhaven-LincolnCounty Chamber of Commerce’s 2007 Industry of the Year under thenew enterprise exemption.

“They basically have to deny it,” Allen said. “The county can’tconsider it.”

In the opinion, Attorney General Jim Hood’s office cited past courtrulings and similar opinions to establish that Columbus Lumber Co.did not qualify as a new enterprise. Company owners Jeff Griersonand Doug Boykin had requested the exemption on the grounds that thechange of ownership, which occurred in 2006 when the pair purchasedthe company from former WorldCom CEO Bernie Ebbers, made the lumbermill a new enterprise.

The opinion, however, noted the mill had been in operation inBrookhaven for more than 40 years and stated that supervisors hadno authority to grant the exemption “on the sole basis of theassets of the business having changed ownership, where operationsof the manufacturing business did not change.”

“When a mere change of ownership takes place but the operations ofthe business remain exactly the same, the Board would not haveauthority to find that same is a ‘new enterprise,'” the opinionsaid.

The denial of the exemption came almost two months after the boarddenied Columbus Lumber’s first exemption request – a $13,000 freeport warehouse exemption that would have waived taxes on goodsmanufactured primarily for export from the state.

The company had sought the two exemptions, which totaled $76,000,to help it save money in the midst of one of the most dismal lumbermarkets on record, which, Grierson said, is ongoing.

“The market is basically no different,” he said. “It still is whatis was. The one thing we’re happy about is every day we wake up andthe mill is still running is one day closer to recovery.”

Grierson said the denial of the new enterprise exemption was notsurprising – he suspected the company’s grounds for request wouldnot hold up. He is still smarting, however, from the supervisors’previous denial of the lesser free port warehouse exemption.

“We realized this exemption could go either way, but we have atotally different view of the free port warehouse exemption,” hesaid. “We think we’re entitled to it; we thought we should havebeen granted it by the supervisors.”

Columbus Lumber should have been granted the free port warehouseexemption, Grierson said, because more than 80 percent of thecompany’s lumber is exported for sale outside of Mississippi.

Supervisors said such exemptions were granted primarily to lure newindustries to the area, but they also have the authority to grantthem to existing businesses. Supervisors said at the time of denialthey did not want to set an exemption precedent that could lead toseveral businesses requesting the same exemption and reducing theamount of tax money flowing into the county budget.

Grierson hopes the Brookhaven Board of Aldermen will grant the sametwo exemptions for Columbus Lumber’s city taxes. Aldermen have notyet acted on the requests, which would grant the company a break on$58,000 in taxes – $48,000 for a new enterprise exemption and$10,000 for a free port warehouse exemption.

Grierson and Boykin have previously stated the requested exemptionswould not be a cure-all for Columbus Lumber’s financialdifficulties, but could help them stall further curtailments at themill. Some curtailments have already been made and productionscaled back to help the company survive through the flounderinglumber market.