WASHINGTON (CN) - Donald Trump filed suit Monday, claiming Washington, D.C., overbilled his company for taxes on the luxury hotel he owns in the city.
The suit, brought by Trump Old Post Office LLC, claims the city used a "flawed methodology" to determine the valuation of the property the company is converting into the Trump International Hotel, leading to unnecessarily high taxes, according to the complaint, which was first reported by Bloomberg BNA.
The company says even though it has been converting the Old Post Office building in downtown Washington into a luxury hotel, the city has levied taxes against the building as though it were an operational hotel generating revenue.
"As a consequence of relying on a flawed valuation methodology, the District's assessment effectively imposes a tax obligation on petitioner for the shell of a building undergoing conversion to a hotel that is higher than the average tax assessed against fully operational and stabilized luxury hotels in the District of Columbia," the petition reads.
The 12-page petition filed Monday specifically contests the $1.3 million in possessory interest tax the company paid on one of the lots on which the massive hotel sits. It is the second challenge Trump's company has raised to the tax assessment against the property, with the first having been dismissed in October, according to Bloomberg BNA.
Trump's company fully gained possession of the historic building from the General Services Administration in August 2014 and has been in the process of renovating it ever since. By the city's own admission, the property was losing more than $6.5 million per year when it was used as a GSA office building, according to the complaint.
During the time it has been renovating the building the company has not received any revenue from tenants or guests, it claims in the complaint. Furthermore, it has had to spend an unusual amount on renovations in order to preserve the building's historical significance, according to the complaint.
Nevertheless, the valuation of the property and the resulting tax bills have been well above market value, the company claims.
The company says it paid all of the taxes the city charged it for 2015 but asks the D.C. Superior Court Tax Division to refund them with interest due to the overcharge.
The company seeks an order from the court reducing the value of the property and refunding it for excessive taxes it paid under the improper valuation.
William Bosch, a Washington attorney with the Arnold Porter law firm, did not respond to an emailed request for comment on what the company believes the property should be worth.
The Trump Old Post Office is also at the center of a legal battle with celebrity chef Jose Andres, who withdrew from a restaurant he was going to open in the hotel after then-candidate Trump disparaged immigrants in his campaign announcement speech.
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