Washington County v. Board of Trustees
480 S.W.3d 173
Ark.2016Background
- The University of Arkansas sought immunity (or alternatively exemption) from ad valorem taxation for specific parcels for tax years 2010–2012; Washington County denied, and the University paid under protest and litigated.
- Cases were consolidated; Fayetteville School District intervened (no objection). Cross-motions for summary judgment were filed; the circuit court granted the University’s motion and denied defendants’.
- The circuit court held the University is an instrumentality of the State and accordingly immune from ad valorem taxation.
- Fayetteville appealed, arguing the Arkansas Constitution requires a use-based exemption analysis (exclusive public use) and does not confer sovereign immunity from ad valorem taxation.
- The Supreme Court of Arkansas reviewed de novo and affirmed, holding (1) state-owned property is presumptively immune absent legislative provision to tax state property and (2) the University is an instrumentality of the State such that the parcels at issue are immune.
Issues
| Issue | Plaintiff's Argument (Fayetteville) | Defendant's Argument (University) | Held |
|---|---|---|---|
| Whether the University is immune from ad valorem taxation | Constitution requires property be taxed unless exempt under Art. 16 §5(b) (exclusive public use); no blanket immunity for state instrumentalities | University (and amici) argued sovereign immunity applies to state instrumentalities and precludes taxation of their property | Court held University is an instrumentality of the State and property is immune from ad valorem taxation under the Constitution and precedent |
| Whether Art. 16 §5(b) exclusive-use test governs state-owned property | §5(b) exclusive-use exemption must be satisfied for immunity; Short controls | University: §5(a) and sovereign immunity render §5(b) analysis unnecessary for state property | Court held Short addressed exemption only and is not controlling here; immunity analysis controls for state-owned property |
| Whether the General Assembly has delegated authority to tax state property | Fayetteville: legislative delegation or statute must allow county taxation of state property | University: no statute subjects state-owned property to ad valorem tax; absent such law, immunity stands | Court found legislature has not enacted law subjecting state-owned property to ad valorem taxation; therefore immunity applies |
| Whether factual dispute exists about parcels’ public purpose | Fayetteville: some parcels used for non-public purposes (e.g., alleged profit activities) so immunity/exemption may not apply | University: parcels are held for public purposes (bookstore, green space/future development) and entitled to immunity; no material fact dispute on record | Court found no genuine material fact issue for parcels before it and affirmed summary judgment for University |
Key Cases Cited
- Arkansas v. Texas, 346 U.S. 368 (U.S. 1953) (University is an official state instrumentality; suit against University is suit against the State)
- Van Brocklin v. Anderson, 117 U.S. 151 (U.S. 1886) (state property held for public uses is not taxable unless state clearly enacts taxation)
- Arkansas State Highway Comm’n v. Sub-Dist. No. 3 of Grassy Lake, 237 Ark. 614 (Ark. 1964) (recognizing practical consequences of state sovereign immunity from taxation)
- Blackwood v. Sibeck, 180 Ark. 815 (Ark. 1930) (state and municipal property presumptively excluded from general tax laws absent clear legislative intent)
- School Dist. of Ft. Smith v. Howe, 62 Ark. 481 (Ark. 1896) (public property exemption under Art. 16 §5 turns on exclusive public use; historical discussion distinguishing state property)
- State v. University of Arkansas Board of Trustees, 241 Ark. 399 (Ark. 1966) (holding suit against University is a suit against the State)
- Arkansas Teacher Retirement System v. Short, 2011 Ark. 263 (Ark. 2011) (analysis concerned §5(b) exclusive-use exemption, not sovereign immunity)