Washington Cty. Bd. of Ts
2016 Ark. 34
Ark.2016Background
- The University of Arkansas applied for immunity or, alternatively, exemption from ad valorem taxes for certain parcels for tax years 2010–2012; litigation narrowed the dispute to 11 parcels (10 real, 1 personal).
- Washington County Assessor denied the applications; University paid taxes under protest and appealed through the Board of Equalization, county court, and then to circuit court; Fayetteville School District intervened.
- Cross-motions for summary judgment were filed; the circuit court granted the University's motion, finding the University immune from ad valorem taxation as an instrumentality of the State.
- Fayetteville appealed, arguing the Arkansas Constitution (Art. 16 §5) subjects property to taxation unless it is used exclusively for public purposes (an exemption analysis), and that the University is not categorically immune.
- The Supreme Court of Arkansas reviewed de novo and affirmed, holding (1) state-owned property is immune from ad valorem taxation absent legislative authorization, and (2) the University is an instrumentality of the State and thus entitled to immunity for the parcels at issue.
Issues
| Issue | Plaintiff's Argument (Fayetteville) | Defendant's Argument (University) | Held |
|---|---|---|---|
| Whether the University is immune from ad valorem taxation | Art. 16 §5 requires an exemption (exclusive public use) showing; state instrumentalities are not categorically immune | University is an instrumentality of the State and thus immune from ad valorem taxation (sovereign immunity) | Held: University is an instrumentality and its property is immune absent legislative waiver |
| Whether Art. 16 §5 requires "exclusive use" test or permits immunity | The constitution contemplates a use-based exemption; Short requires exclusive public use for exemption | Immunity exists apart from the exemption framework; constitutional text does not expressly subject sovereign property to tax | Held: The "exclusive use" exemption (§5(b)) addresses exemptions; immunity of state-owned property is recognized by precedent and constitution lacks language subjecting sovereign property to tax |
| Whether disputed parcels are "held for a public purpose" (fact question) | Parcels may not be held exclusively for public purposes (e.g., bookstore as profit-making) — factual dispute | Parcels are held for public purposes; title and other evidence support immunity; assessor affidavit speculative | Held: No genuine material fact prevents immunity here — record supports that the specific parcels are held for public purpose and summary judgment was proper |
| Whether Legislature has authorized taxation of state property | Fayetteville: Legislature could be read to subject property to tax or require use-analysis; equity arguments support taxation | Legislature has not enacted law subjecting state-owned property to ad valorem taxation or delegated that power to counties | Held: Legislature has not waived or abrogated immunity; absent clear legislative action, sovereign immunity from ad valorem taxation stands |
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 State)
- Van Brocklin v. Anderson, 117 U.S. 151 (U.S. 1886) (state property is not taxable unless the state clearly intends it to be)
- Arkansas State Highway Comm'n v. Sub-Dist. No. 3 Grassy Lake, 237 Ark. 614 (Ark. 1964) (recognizes sovereign immunity consequences in eminent-domain/tax-base contexts)
- School District of Ft. Smith v. Howe, 62 Ark. 481 (Ark. 1896) (public-property exemption applies to public corporations; exemption depends on use)
- Blackwood v. Sibeck, 180 Ark. 815 (Ark. 1930) (discusses presumption against taxing state/municipal property and rationale for immunity)
- Arkansas Teacher Retirement System v. Short, 381 S.W.3d 834 (Ark. 2011) (focused on §5(b) exclusive-use exemption analysis rather than sovereign immunity)
- State v. University of Arkansas Board of Trustees, 241 Ark. 399 (Ark. 1966) (recognizes suits against University as suits against the State)