Opinion Number ( 1995 )

Dear Mr. Williams:

You have requested an opinion of the Attorney General regarding the tax status of a certain tract of immovable property located within your district. Under the factual scenario you have presented, the subject property has been assessed as of August 1, 1994 at the residential classification rate of 10% pursuant to Article 7, Section 18 of the Louisiana Constitution of 1974. During the tax year, the property is acquired by another owner who seeks to renovate the improvements thereon for commercial purposes. You ask whether it is legally permissible for you to adjust the assessment to the commercial rate classification of 15% during that same taxable year.

As previously noted, in Orleans Parish, the tax status of real and personal property is fixed on the first day of August of each year. R.S. 47:1703(B) provides the following:

"B. Orleans Parish. In the parish of Orleans, the status of real and personal property on the first day of August of each year shall determine its liability for or exemption from taxation for the following calendar year." (Emphasis added.)

This office has consistently followed the well-established rule set forth by the Supreme Court of Louisiana inNew Orleans Bank Trust Company v. City of New Orleans,147 So. 42 (1933) which holds:

"The taxable status of property relates to a certain day in each year. There must be some day of the year as of which the power to tax property is determined. That day fixes the power to tax with reference to whether the property was exempt from taxation on that date."

Pursuant to R.S. 47:1703(B) that date, in Orleans Parish, is the first day of August. The fact that a transfer of ownership occurs during the taxable year does not change the tax status for that year.

For the foregoing reasons, it is the opinion of this office that immovable property that has been assessed as of August 1 at a residential rate classification of ten percent (10%) may not be reclassified to a commercial rate classification of fifteen percent (15%) during that same taxable year.

Should you have any additional questions concerning this matter, please do not hesitate to contact us.

With kindest regards, I am

Very truly yours,

RICHARD P. IEYOUB Attorney General

By: _____________________ ROBERT E. HARROUN, III Assistant Attorney General