In Re: Assessment of Ad Valorem Taxes of Reed Manufacturing, Inc.
| Docket Number: | 2002-CA-01434-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 09-25-2003 Opinion Author: Carlson, J. Holding: Reversed and Rendered |
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| Additional Case Information: |
Topic: Assessment of ad valorem taxes - Privately held leasehold interest - Exemptions - Section 27-31-33 - Section 27-31-34 - Section 27-35-155 - Omitted taxes - Time limit of exemption - Miss. Const. Art. 7, Section 182 Judge(s) Concurring: Pittman, C.J., Smith, P.J., Waller, Cobb and Graves, JJ. Easley, J., Concurs in Part Non Participating Judge(s): Diaz, J. Dissenting Author : McRae, P.J. Procedural History: Summary Judgment Nature of the Case: CIVIL - OTHER |
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| Trial Court: |
Date of Trial Judgment: 07-30-2002 Appealed from: Itawamba County Circuit Court Judge: Richard Bowen Disposition: The Board of Supervisors of Itawamba County was granted summary judgment allowing the County to assess back taxes on a leasehold interest held by Reed Manufacturing, Inc. Case Number: 00-112 BI |
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| Topic: | Assessment of ad valorem taxes - Privately held leasehold interest - Exemptions - Section 27-31-33 - Section 27-31-34 - Section 27-35-155 - Omitted taxes - Time limit of exemption - Miss. Const. Art. 7, Section 182 |
| Summary of the Facts: | The Board of Supervisors of Itawamba County was granted summary judgment allowing the County to assess back taxes on a leasehold interest held by Reed Manufacturing, Inc. Reed appeals. |
| Summary of Opinion Analysis: | Issue 1: Privately held leasehold interest Reed argues that the exemptions and prohibitions provided for under sections 27-31-33, 27-31-34, and 27-35-155 should apply to leasehold interests held by private entities. The County argues, for the first time on appeal, that these statutes are unconstitutional because they allow for a greater tax exemption for a corporation than ten years. The constitutionality of the statutes is barred because it was never raised before the trial court and the Attorney General was never given notice of a constitutional challenge. A review of legislative history, Attorney General opinions, case law and the unambiguous language of the statutes leads to the conclusion that a leasehold interest held by a private company is entitled to the exemption provided for under sections 27-31-33, 27-31-34 and 27-35-155. Issue 2: Omitted taxes Reed was never assessed ad valorem taxes on its leasehold interest prior to 2000, and Reed argues that section 27-35-155 precludes the County from assessing taxes for the years 1993 to 1998 which were omitted from the tax rolls. Section 27-35-155 provides that the power of the assessor to assess property that has escaped taxation by way of additional assessments for former years shall expire at the end of the seven years from the date when his right so to do first accrued and that no leasehold interest in any property belonging to the state of Mississippi, counties, districts, municipalities or any political subdivisions, shall be subjected to ad valorem taxation for any past year on the basis of it having been omitted from the ad valorem tax rolls. Because Itawamba County admitted to omitting Reed's leasehold interest from the ad valorem tax rolls, the leasehold interest is not subject to ad valorem taxation for any past year that it was not listed on the ad valorem tax roll. Issue 3: Exempt from taxes Reed argues that pursuant to section 27-31-33, the leasehold interest became exempt from ad valorem taxation in the 1984 taxable year and is exempt "for each taxable year thereafter" for the life of the lease, or until 2072. Although an entity may be exempt from ad valorem taxes pursuant to the terms of the lease, that exemption may not exceed ten years under Article 7, Section 182 of the Mississippi Constitution. Because Reed's lease with Itawamba County began in 1977, the ad valorem tax exemption would only have been in effect through 1987. Once Reed's leasehold interest is properly placed on the Itawamba County ad valorem tax rolls, the County may begin assessing Reed the appropriate ad valorem taxes. |
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