Little Rock airport, Pulaski County debate tax case; $400,000 owed, state justices told

FILE — A sign for the Bill and Hillary Clinton National Airport in Little Rock is shown in this undated file photo.
FILE — A sign for the Bill and Hillary Clinton National Airport in Little Rock is shown in this undated file photo.

Attorneys for Pulaski County and the state's largest airport argued before the Arkansas Supreme Court on Thursday over whether the airport owes more than $400,000 in property taxes to the county.

The taxes are for three vacant buildings at Bill and Hillary Clinton National Airport/Adams Field for 2014 and 2015. The airport filed an exemption application in 2016, but it was denied by Pulaski County Assessor Janet Troutman Ward.

The attorney for the airport, Andy Taylor, echoed the ruling made by Barry Hyde, county judge of Pulaski County, who had ruled in favor of the airport in March 2018, saying that that it was "counter-intuitive" to tax a public entity if the property is not generating revenue for the private sector.

"The public would be taxing itself and no one would be benefited from this," Taylor said.

The case has implications for public and quasi-public entities across the state, and the Arkansas Municipal League joined the case, submitting briefs in support of the municipal airport.

The properties in question are the old Hawker Beechcraft complex, the former Southwest Airlines reservation center and the former Carrier building. They sit empty and have no tenants. When private tenants occupy them, they become taxable and the tenants are responsible for the payments.

The Hawker Beechcraft facility, Taylor said, is a set of hangars next to the primary runway of the airport. During inclement weather, the hangars are used as a "staging area" to remove snow and ice from the runway and also are used for storage, he said. Taylor argued that the properties were designated for public uses and therefore they shouldn't be taxed.

The attorney for Pulaski County, Meagan Davis, said the airport has never shown that the Hawker Beechcraft complex and the other two properties were used exclusively for public purposes in 2014 and 2015.

It is incumbent on the airport to show that, she argued.

"Exemptions must be strictly construed in favor of taxation and the burden is on the airport to prove this case," Davis said. "They've not demonstrated that this was used exclusively for the public's purpose."

Taylor said that the airport did, at the county court's request, provide a chart of "what was being used and when it was being used" during the taxable period.

Justice Rhonda Wood alluded to the ramifications the case could have for public property across the state.

She asked Davis whether it was her position that any public facility that is vacant, including a hospital or city hall, is subject to taxation.

Davis said what mattered is what the property is used for and who owns it.

"It's not our argument that never would vacant, unused property be exempt," she said. "It's that in this case, there hasn't been any proof that it has been used exclusively for public purposes."

Article 16 of the Arkansas Constitution states that public property used exclusively for public purposes is exempt from taxation.

Recently, the airport hired a commercial broker to market the Hawker Beechcraft complex for occupation and some portions of it have been leased, according to court statements.

In his 2018 ruling, Hyde wrote that the property was not leased during the relevant time periods so therefore it should be considered "exclusive public purpose and use."

Taylor said the same Thursday.

"There was no private use here," he said.

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