A dispute between Pulaski County and the state's largest airport over more than $400,000 in property taxes is going to a higher court.
Pulaski County Assessor Janet Troutman Ward is appealing a ruling blocking her office from collecting the taxes owed on three vacant buildings at Bill and Hillary Clinton National Airport/Adams Field.
Barry Hyde, the county judge of Pulaski County, said in a March 2 ruling that the airport was entitled to the exemption from paying the taxes it had filed on Oct. 13, 2016. Ward's office denied the exemption application on Oct 27, 2016.
The denial left the airport on the hook for $406,445.30 in overdue property taxes for the old Hawker Beechcraft complex for 2014 and 2015, when most or all of it sat unused after the aircraft manufacturer filed for bankruptcy in 2013 and vacated the property. The site had been used to customize business jets after they were manufactured elsewhere.
The airport's requests for property-tax exemptions on two other properties, the former Southwest Airlines reservation center and the former Carrier building, also were denied. The amount of money at issue was much smaller on those two properties.
Hyde, who isn't a lawyer, heard the case in county court, a venue in which the county's chief executive officer presides. County court was established in the Arkansas Constitution under Article 7, Section 28, which states that matters relating to county taxes, roads, bridges and some other issues are heard in county court before any other court.
He took testimony in hearings held on Sept. 25, 2017; Jan. 25; and Feb. 23.
The airport disagreed with the county assessor's office decision to require the airport to pay the property taxes for the buildings when they sit empty and have no tenants. The buildings are subject to property taxes when private tenants occupy them. The tenants are responsible for the payments.
The assessor's office said the unused buildings aren't exempt from taxation when they are vacant because, while they are owned by a governmental agency, they have no public use, as defined by the state constitution.
Article 16 of the state constitution states that "public property used exclusively for public purposes" is exempt from taxation.
Hyde's order cited Supreme Court cases used by airport attorneys as more relevant to the case before him.
"These cases establish that when a public entity is leasing public property to a private entity, the property should be subject to taxation," Hyde wrote. "When the public entity is not leasing the property, but is actively trying to lease the property, the property is not subject to taxation."
The county judge also noted that the airport had retained a commercial broker to market the buildings for new tenants. Some portions of the Hawker Beechcraft complex since have been leased.
"The unrebutted testimony in this case is that the property was not leased during the relevant time periods, and that the property was being actively marketed for lease through a commercial broker," Hyde wrote. "This is an exclusive public purpose and use."
The airport declined to comment on the appeal.
"We understand that an appeal has been filed, and will rely on our attorneys to respond appropriately," said Shane Carter, an airport spokesman.
Pulaski County Attorney Adam Fogleman, who is representing Ward's office, filed the notice of appeal Friday morning in Pulaski County Circuit Court. The case was assigned to Circuit Judge Alice Gray.
Metro on 03/31/2018