State Supreme Court sends Harley-Davidson tax issue back to York County court


The state Supreme Court on Tuesday ruled that the Commonwealth Court of Pennsylvania was right to send the decade-plus-old dispute about how much Harley-Davidson should pay in taxes back to York County court, but had a couple of changes to the lower appellate court's order to do so.

At issue is how much the Milwaukee-based manufacturer should be paying in school, municipal and county taxes for its 229-acre campus at 1425 Eden Road in Springettsbury Township.

The civil-court battle has been going on since 2004, when Harley appealed an assessment that raised the fair market value of the property from $10 million to $39 million. Property taxes are based on the assessed value of the property, so that significantly increased the amount of money Harley-Davidson had to pay.

Upon Harley-Davidson's appeal, the state Commonwealth Court in October 2013 ordered York County President Judge Stephen Linebaugh to re-evaluate Harley's property assessment while considering environmental contamination, fair market value and not assessing the campus as a subdivision.

Central York School District then filed its own appeal of that ruling to the Commonwealth Court, which rejected it. After that, the district successfully petitioned the state Supreme Court to take the case up. The two sides argued before the court in November 2014.

Tuesday's state Supreme Court verdict was a mixed bag. It did rule against Central York's main issue of appeal, which sought to block the Commonwealth Court from remanding the case back to York County court; the high court confirmed the decision for Linebaugh to re-evaluate the property, as Harley-Davidson wanted. It reasoned this was necessary, as environmental contamination factors weren't properly considered originally.

But it ruled some issues Harley-Davidson successfully appealed to the Commonwealth Court regarding one of the school district's experts were not valid and that the expert's testimony should be considered. Harley-Davidson — and the Commonwealth Court — had taken issue with real estate expert Bernard Camins' testimony about what the assessed value should be in terms of what effect environmental contamination should have on it and whether he assessed the property as if it was subdivided.

The state Supreme Court said Camins' testimony held up in court.

"We need some time to evaluate the decision," said Bernadette Lauer, a Harley-Davidson spokeswoman.

No one from Stock and Leader, the law firm representing Central York, could be reached Tuesday evening.

History: The U.S. government used the property as the York Naval Ordnance plant until 1964, when the American Machine and Foundry Co. (AMF) purchased the land and used it as a site to make bomb casings.

AMF merged with Harley, and motorcycle manufacturing began on the campus in 1973.

Military contracting was phased out in the early 1980s, but left behind were significant environmental impacts, according to court records. They include soil and groundwater contamination, and hazardous materials buried on the property, those records indicate. That's the source of the environmental contamination the parties are discussing.

Linebaugh originally assessed the property at $18 million and $26.5 million for the years between 2004 and 2010.

Because of the environmental contamination, an environmental expert for Harley has said the property should have been valued at $14.5 million for 2003-2005, $15 million for 2006-2009 and $12.5 million in 2010, according to court records.

Based on Harley's assessed property value and the millage rates for those years, the county, district and township could owe the company about $2 million in overpaid taxes if the original assessment is changed.

— Reach Sean Cotter at