Cutter Flying Service, Inc. v. Property Tax Dept.
Decision Date | 30 August 1977 |
Docket Number | No. 2773,2773 |
Citation | 1977 NMCA 105,572 P.2d 943,91 N.M. 215 |
Parties | In the Matter of the Consolidated Protests of Valuation of Property for Property Taxation Purposes of, CUTTER FLYING SERVICE, INC., Southwest Air Rangers, Inc., Frontier Airlines, Inc., Continental Airlines, Inc., Trans World Airlines, Inc., and Texas International Airlines, Inc., Protestants-Appellants, v. PROPERTY TAX DEPARTMENT of the State of New Mexico, Valuation Authority-Appellee. |
Court | Court of Appeals of New Mexico |
This is an appeal for review of an order of the Director of the Department of Property Tax denying appellants' protest of assessment and levy of ad valorem taxes on their respective leasehold and other interests in the Albuquerque International Airport.
Appellants Continental Airlines, Inc., Trans World Airlines, Inc., Frontier Airlines, Inc., and Texas International Airlines, Inc., will be referred to collectively as "airlines." Appellants Cutter Flying Service, Inc., and Southwest Air Rangers, Inc., will be referred to as "airport operators."
Each of the airlines entered into separate agreements entitled "leases" at different times with the City of Albuquerque for the use of some of its improvements and facilities at the municipal airport. Although differing in some respects, these agreements can, for the purposes of this opinion, all be divided into five parts:
1. Areas used exclusively by the lessor airline: offices, a ticket and baggage-handling counter, and operations space.
2. Areas used jointly with other airlines: passenger gates and holding areas, baggage claim area, ground area for parking, taxiing, loading and unloading aircraft.
3. Facilities used jointly with other airlines: public address system, aircraft toilet waste disposal facility.
4. Areas in terminal building used in common with public.
5. Runways used jointly with other airlines, military and others.
The agreements of the two airport operators can be divided into three parts:
1. Space in hangar building and adjacent land used exclusively by the lessor airport operator.
2. Aircraft tiedown areas used jointly with others.
3. Collection of fees for use of runways, paid by individual users in the form of a tax on aviation fuel and oil and remitted to the city by the airport operator. Southwest Air Rangers' lease (which is more recent than Cutter's) provides that if a private plane does not purchase fuel from Southwest, "the Lessee shall immediately upon notice thereof advise the Aviation Director so that Lessor may property (sic) compute and bill necessary landing fees."
In his order, the Director made the following two pertinent conclusions of law:
The pertinent constitutional provisions are:
"The property of the United States, the state and all counties, towns, cities and school districts, and other municipal corporations, public libraries, community ditches and all laterals thereof, all church property, all property used for educational or charitable purposes, all cemeteries not used or held for private or corporate profit, and all bonds of the state of New Mexico, and of the counties, municipalities and districts thereof shall be exempt from taxation." N.M.Const. art. 8, § 3.
The pertinent statutory provisions from the Property Tax Code, Chapter 72, Articles 28, 29, 30, and 31, N.M.S.A.1953 (Supp.1975) are: Section 72-28-2(E):
.
.
Section 72-29-2.2 (1976 Interim Supp.):
Section 72-29-2.3 (1976 Interim Supp.):
Section 72-29-2.4 (1976 Interim Supp.):
The appellants allege seven points of error. Their first point, which is dispositive of this appeal, reads as follows:
"The interests of the taxpayers in the Albuquerque International Airport are not subject to valuation for property taxation purposes and the actions of the Director of the Department in valuing the interests for property taxation was contrary to law."
As a preliminary matter it is necessary to determine the nature of the interests created by the agreements between the appellants individually and the City of Albuquerque. The applicable law is as follows:
"(A) lease is an agreement under which the owner gives up the possession and use of his property for a valuable consideration and for a definite term." Transamerica Leasing Corp. v. Bureau of Revenue, 80 N.M. 48, 450 P.2d 934 (Ct.App.1969).
3 Thompson on Real Property § 1031 at 97-98:
See, Chavez v. Torlina, 15 N.M. 53, 99 P. 690 (1909).
"It is said that the difference between a license and a lease is that a lease gives to the tenant the right of possession against the world, while a license creates no interest in the land, but it is simply the authority or power to use it in some specific way." Thompson, supra, § 1032 at 106.
Thompson, supra, § 1032 at 109.
"A license to occupy land is in the nature of a tenancy at will; but a license confers no title or interest in the land." Thompson, supra, § 1032 at 105.
Tidwell v. State ex rel. Herman, 21 Ariz.App. 3, 514 P.2d 1260 (1973):
See, Board of County Com'rs. of Dona Ana County v. Sykes, 74 N.M. 435, 394 P.2d 278 (1964).
"The character of the instrument is not to be determined by its form, but from the intention of the parties as shown by the contents of the instrument." Transamerica Leasing Corp. v. Bureau of Revenue, supra.
It is readily apparent from the foregoing and from a study of the agreements that the airlines acquired a leasehold interest in those areas of which they had exclusive use. They acquired a mere license to use the rest, runways, etc. Stated negatively, they did not acquire the dominion and control necessary to constitute a leasehold as to those areas.
The airport operators likewise acquired a leasehold interest only in those areas over...
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1997 -NMCA- 86, Welch v. Sandoval County Valuation Protests Bd.
...not "land[s] ... held by ... Pueblo Indians." It is property of the lessee. See Cutter Flying Serv. v. Property Tax Dep't, 91 N.M. 215, 219-20, 572 P.2d 943, 947-48 (Ct.App.1977) (opinion of Hernandez, J.) (discussing property taxation of leases at municipal airport). New Mexico has the aut......
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Mannick v. Wakeland, 24,078.
...grounds as stated in State v. McCormack, 101 N.M. 349, 682 P.2d 742 (Ct.App.1984); Cutter Flying Serv., Inc. v. Prop. Tax Dep't, 91 N.M. 215, 221, 572 P.2d 943, 949 (Ct.App.1977) (opinion of Hernandez, J.) (indicating that real property includes structures, fixtures, and 3. Prima facie tort......