PARIS – Waterford needs to take a serious look at how it assesses taxes, Oxford County commissioners decided Tuesday.

At Tuesday’s meeting, commissioners decided the Bear Mountain Inn v. Waterford tax abatement case, leaning in favor of the inn.

In the case, inn owners Lorraine Blais and Deborah “Rickie” Hall claimed the tax on their waterfront property in 2005 was assessed unfairly. Their attorney, Dana Hanley, also questioned a 25 percent surcharge on land that the town charges businesses, stating that it is illegal.

The owners’ total for taxes for land and their residence, plus the surcharge, was $12,537. The exact amount of the abatement granted Tuesday was unclear, but it was in the hundreds of dollars, Hall said Tuesday night by phone.

The tax assessments were based on the number of acres and amount of shorefront, plus 25 percent added because the inn is a business, she said.

Hall said the surcharge is not listed on the bill so business owners may not be aware of it unless they check their tax card at the town office.

In their abatement request, Hall and Blais also asserted that the assessors’ method of setting different tax rates for shorefronts, depending on the lake or pond, is unfair. Hall said their shoreland on Bear Pond is assessed at $700 a foot, the high end of the assessors’ scale that ranges from $75 to $900 a foot.

Commissioners did not rule on that issue, Hall said, because they are not assessors.

After four months of discussion, commissioners determined that the inn owners should not have to pay the business surcharge, since they are a home business. Commissioners also decided to draft a letter “strongly recommending” that the town hire a professional assessor to look at the tax situation.

“It does not seem fair to me, nor does it have any rhyme or reason,” Commissioner Jeffery Fagan of Paris said. “There are too many judgment calls being made there.”

However Selectman William “Whizzer” Wheeler stands his ground, stating Waterford has done no wrong. He said commissioners should not have heard the case in the first place because it was outside the 185-day limit for tax appeals, and the commissioners did not have the jurisdiction to determine the constitutionality of the property tax.

Wheeler said he would have explained that to commissioners had they given him enough time to present his case.

Wheeler said he plans to make no changes in the town as a result of Tuesday’s findings. He contends that the inn is a business because the primary use of the property is for profit.

The town does have plans to hire a professional commercial assessor to look at the town’s taxes. While Selectman Dave Marston has suggested the business tax should be dismissed, Wheeler contends that it is justified.

Hanley, Blais and Hall all said they were happy with the outcome. Hanley said the case will establish precedent for other cases from the town, which was his overall goal.

This case was far more complicated than other abatement cases the commissioners have heard, Chairman David Duguay of Byron said. Most abatement hearings deal with waterfront valuation, and, “I don’t recall having a town with different values on different bodies of water,” he said.

Fagan said that many abatement hearings were open and shut cases because town officials were able to briefly state how the taxes were assessed.

That was not the case in Waterford.

“That abatement had a number of personal issues associated with it, it lacked logic,” Fagan said.

The inn owners are going one step further by passing around a petition stating that the 25 percent business surcharge on land should be put on the warrant for the next town meeting. Marston, commissioners said, is fighting to have selectmen vote not to apply the tax.

The town’s third member of the Board of Selectmen is Norman Rust.

The county had hired certified Maine assessor David Sawyer to look at the way the town was taxed. Commissioners said they were disappointed in the assessment done.

Sawyer’s report concluded:

“In summary, my opinion is that the county commissioners should deny the appeal based on timeliness, but if the commissioners should decide otherwise and waive the 185-day deadline, they should lift the 25 percent commercial adjustment and reduce the land value and abate the taxes accordingly.”

Taxation troubles are not over for the inn owners. Three weeks ago they got a supplemental tax bill for 2005, which showed the town increased their assessed value $15,050 and billed them another $174.38 this year. Hall said they asked town officials for an explanation and none was given.

Their 2006 taxes totaled $12,881.70 and were paid when due Dec. 1, Hall said. They are seeking an abatement on them as well, she said.

Blais and Hall said they are selling the inn so pursue other options. One of Blais’ other options may be to run for a selectman’s seat so she can straighten out the town, she said.

She said she will only do this if they sell the inn, so she will have the time to dedicate to the position.

Staff Editor Mary Delamater contributed to this report.