Arkansas City v. Board of County Com'rs of Sumner County
| Court | United States State Supreme Court of Kansas |
| Citation | 197 Kan. 728,420 P.2d 1016 |
| Docket Number | No. 44566,44566 |
| Parties | ARKANSAS CITY, Kansas, and the City of Winfield, Kansas, municipal corporations of the 2nd Class, Appellants, v. The BOARD OF COUNTY COMMISSIONERS OF SUMNER COUNTY, Kansas, Ronald F. Dwyer, County Clerk and Ex-Officio County Assessor of Sumner County, Kansas, and Glen McMillan, County Treasurer of Sumner County, Kansas, Appellees. |
| Decision Date | 10 December 1966 |
Syllabus by the Court
1. Taxation is the rule-exemption is the exception-and statutes granting exemption from taxation are to be strictly construed.
2. By virtue of the 1963 amendments to pertinent statutes, now appearing as K.S.A. 14-1001 and K.S.A. 79-201, Sixth, the former concept of ownership-rather than use-as being the test for exemption from taxation of property belonging to a city (City of Harper v. Fink, 148 Kan. 278, 80 P.2d 1080) is no longer the rule. Use is now the important factor.
3. Plaintiff cities owned land as tenants is common. They executed oil and gas leases. Production was had. In 1964, as provided by K.S.A. 79-330 and 331, and taxing officials placed plaintiffs' one-eighth landowner's royalty interest on the tax rolls. Held-under the facts, and for reasons set forth in the opinion, imposition of the tax was correct.
W. R. Mathews, Winfield, argued the cause and Lawrence E. Christenson and Marion P. Mathews, Winfield, were with him on the brief, for appellants.
Charles E. Watson, Wellington, argued the cause and was on the the brief, for appellees.
This is an action to recover taxes paid under protest and for injunctive relief from further taxation.
Plaintiff landowners have appealed from an adverse judgment.
The facts are not in dispute.
In 1948, by a deed not shown in the record, the United States of America conveyed a half section of land situated in Sumner county to the City of Arkansas City and the City of Winfield as tenants in common. (At oral argument of this appeal it was stated that during World War II the land in question was used for a military air field.) In 1952 the cities-hereafter referred to as plaintiffs-executed oil and gas leases covering the land. Production was obtained, and plaintiffs received their one-eighth royalty interest. The moneys so received were commingled with other municipal revenues and were used for various and sundry purposes with the consent of the United States of America.
In force during the foregoing period-and for some years thereafter-was G.S.1949, 14-1001, which provided--
'All lands, houses, moneys, debts due the city, and property and assets of every description belonging to any city or municipal corporation under this act, shall be exempt from taxation, execution and sale.' (emphasis supplied)
and G.S.1949, 79-201 which, in material part, provided--
(emphasis suppled)
In City of Harper v. Fink, 148 Kan. 278, 80 P.2d 1080, it was held that under those statutes the test of whether real estate belonging to a city is exempt from taxation was ownership, and not use.
In 1963, however, both statutes were amended.
K.S.A. 14-1001 now reads:
'All lands, houses, moneys, debts due the city, and property and assets of every description belonging to any city or municipal corporation under this act, shall be exempt from taxation, execution and sale: Provided, That if any of such lands, houses, or other property or assets are leased, loaned or otherwise made available to any person, firm or corporation for use in any trade or business or commercial enterprise, such property so leased, loaned or otherwise made available shall not be exempt from...
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