NH Supreme Court to decide: COVID-19 a natural disaster or not
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Dec. 14—A lawyer representing nine New Hampshire hotels told the state Supreme Court that the hotels should not be forced to pay local property taxes when Gov. Chris Sununu effectively shut them down during the COVID-19 pandemic.
But the cities of Manchester, Keene and Laconia and the town of Bedford said the pandemic and resulting shutdown are not what lawmakers had in mind when they exempted buildings from taxation during natural disasters.
The hotels have asked the Supreme Court to decide whether the pandemic was a natural disaster that resulted in damages — in this case the loss of business revenue — to their property.
The hotels included the DoubleTree by Hilton, the Comfort Inn and the EVEN Hotel in Manchester. Those three hotels alone have withheld $309,000 in property tax payments.
Hotels and other businesses across the state had to close or significantly reduce operations in late March 2020 under Sununu's executive order. Hotels were not allowed to fully reopen until June 2020. Restaurants couldn't seat their normal crowds until August 2020.
Roy Tilsley, representing the hotels, said the law in question gives no definition for natural disaster or damages. If the disaster prevented the hotel from operating, it should not be expected to have to pay taxes, he said.
Laura Spector-Morgan, representing the municipalities, said COVID-19 did not qualify as a natural disaster. She also noted that hotels could rent rooms to essential workers and vulnerable populations throughout the pandemmic.
The arguments provided lively debates before the court:
"It was the order (by Sununu) that caused the damage, not the virus," said Justice Gary Hicks. "The virus caused the order, which caused the shutdown," Tilsley responded.
What if, Justice Anna Hantz Marconi asked, the virus turns out to be technology-caused disaster and not a natural disaster? Tilsley said that would be up to a trial judge to decide, but no city has made that argument.
Justice James Bassett noted that the hotels received Payroll Protection Plan loans of $80,000 to $1.1 million. "Your clients could get a tax break and money from PPP. They'd be better off than if COVID never happened." Tilsely said that would be an issue at trial.
Bassett noted that the law provides for a tax abatement in only two circumstances: a natural disaster and an unintended fire. What if a hotel was closed because of a raging, climate-change-induced forest fire such as out West? If the hotel isn't damaged by fire, can it still get an abatement? Only if smoke from the fire damaged the property, Spector-Morgan said.
A Supreme Court decision won't end the issue. The appeal is in the middle of a case that the hotels have brought challenging their valuations. Once the court rules on whether the pandemic is a natural disaster, the case returns to its initial venue in Superior Court.
