Opinion No. ( 1990 )

The Honorable Lonnie P. Clark State Representative P.O. Box 406 Berryville, Arkansas 72616

Dear Representative Clark:

This is in response to your request for an opinion concerning the assessment of taxes on airport hangars at the Carroll County Airport. Specifically, you have attached a copy of a lease agreement between the Carroll County Airport Commission and a private individual under which the private individual leases county real property at the airport to store a private aircraft. It is our understanding that the private individuals involved built hangars on the county airport property, and then had the deeds to the hangars transferred to the county, which then leased the hangars and the land upon which they sit back to the private individuals.

Paragraph 14 of the lease you have enclosed states that "[t]he Lessor shall pay all taxes and special assessments that may be levied against said lands and improvements." You note that the "county tax assessor is assessing county taxes on these leased hangars and totally disregarding the lease provisions." It is our understanding from a discussion with you that the county is assessing the taxes to the private individuals who store their aircraft in the hangars.

You have asked for an opinion "regarding the lease provisions and the authority to totally disregard their provisions by the county tax assessor."

In response to your question we must first note that it appears that the land and hangars in issue are not tax exempt because they are not used exclusively for public purposes. See Arkansas Constitution, Art. 16, 5 and 6. The question is thus which entity should be assessed for the taxes, the County Airport Commission or the private individuals.

It is my opinion that according to the provisions of the lease you have enclosed, the County Airport Commission has obligated itself to pay any taxes or special assessments on the land and the improvements. The County Airport Commission should thus be assessed for the taxes during the term of the lease.

The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elana L. Cunningham.

/s/ Ron Fields Attorney General

[1] You have noted that Carroll County has a number of these leases.