Assessors Won’t Bank on ATM Ruling

Comedian Jay Leno, commenting on rising ATM fees, joked that the acronym should stand for automated thief machines. And lately, no one’s feeling more robbed by ATMs than county assessors in California.

That’s because earlier this month, the state Board of Equalization voted to reclassify ATMs as personal property, giving banks a big tax break. ATMs were previously considered fixtures, which are taxable.

But now, assessors throughout the state are joining hands to challenge the board’s ruling in a lawsuit soon to be filed in Superior Court.

“It’s far from over,” says Larry Stone, assessor of Santa Clara County, who estimates that his county stands to lose $250,000 in tax revenue because of the reclassification.

Los Angeles County, of course, has the most at stake. Bill Leonard, chief of personal property division at the assessor’s office, makes this calculation: There are about 15,000 ATMs in the state, and at an average valuation of $20,000 per ATM, that’s $300 million in assessed value--or $3 million of potentially lost taxes, including a third to L.A. County.

But more than the amount, Leonard complains about the logic--or as he argues, illogic--of the board’s ruling. A personal property is supposed to be portable, like a laptop computer, but a fixture is a building improvement.

Although some ATMs are free-standing, like vending machines, most are attached to a bank building at great expense. “Sometimes they’re attached with 1-inch-thick anchor bolts,” says Johan Klehs, the only one of five Equalization Board members who voted against the tax break.

What galls Klehs is that banks don’t plan to pass the tax savings onto consumers. “I asked the banks and they said, ‘absolutely not.’ ” Moreover, Klehs says, banks can ask for refunds for taxes paid in previous years.

Bank of America, which operates the nation’s largest network of ATMs, including about 4,000 in California, says it won’t ask for such refunds. But a spokesman added: “ATMs are portable appliances like copiers and office safes.”

BofA, for its part, says the ruling will save it $300,000 a year in taxes.

Early Withdrawal

James F. Montgomery, chairman of the board at Great Western Financial and a noted aficionado of the Wild West era, may be feeling a bit like he got off the horse too soon.

On Valentine’s Day, just three days before H.F. Ahmanson made its surprise takeover bid for Great Western, Montgomery sold 114,000 shares of stock. The shares had a market value of $4.02 million, according to Montgomery’s filing with the Securities and Exchange Commission.

But had he waited until Feb. 18, the next trading day because Monday was a holiday, those shares would have been worth more than $5 million.

Great Western’s stock, which had languished in the high $20 and low $30 range in recent months, shot up $10.625, to $44.875, on the first day of trading after Ahmanson’s bid was made. Great Western’s stock closed at $45.375 on Thursday, down $1.125 on the New York Stock Exchange.

Urban Marketing

Bank of America is sponsoring three “financial empowerment” seminars next month at churches in South-Central Los Angeles.

The two-hour seminars, to be presented by Marjorie Grace, president of Grace Financial Services, are part of BofA’s program to reach customers in minority neighborhoods. Earlier this month the bank began a promotion tied to the Lunar New Year to attract Chinese and Vietnamese customers.

BofA says a third of its new retail customers are Latinos and another fourth are Asian and African-American. The seminars, free to the public, will be held March 11-13 at First African Methodist Episcopal Church, West Angeles Church of God in Christ and Optimal Christian Academy.

Don Lee can be reached by e-mail at don.lee@latimes.com.