REQUEST
LETTER
02-002
Response 2/28/02
NAME
ADDRESS
Last Year when COMPANY came
into the Assessor’s office to register their vehicle, I had you check to see if
they should be exempt from taxes. When
you checked into the matter you had told me that we could ask for the Federal
Designation Form 501-C-3 to determine
if the COMPANY should be exempt.
This year when we sent out
our personal property affidavit and also asked COMPANY to provide us with Form
501-C-3, they indicated that they had never seen such a form but did include
their charter.
Will the paper work that they
sent me, which I have attached to this fax, be sufficient to grant them exempt
status.
NAME
ADDRESS
RESPONSE
LETTER
DATE
NAME
ADDRESS
RE: Advisory Opinion – Taxation of Property Owned by a Federal
Land Band Association
Dear NAME,
You have asked the Commission to determine whether
COMPANY, COMPANY is exempt from taxes on its personal property, specifically a
“vehicle” it owns. COMPANY, COMPANY has
supplied you with a copy of its charter from the Farm Credit Administration,
which you have forwarded to us. The
charter indicates that COMPANY, COMPANY is a “federal land bank association,”
chartered in accordance with 12 U.S.C. 2091.[1]
Federal law addresses whether property owned by a federal
land bank association may be taxed by state and local authorities in 12 U.S.C.
2098, which provides that:
Each Federal land bank association and the capital, reserves, and surplus thereof, and the income derived therefrom, shall be exempt from Federal, State, municipal, and local taxation, except taxes on real estate held by a Federal land bank association to the same extent, according to its value, as other similar property held by other persons is taxed.
This statute specifically exempts
a federal land bank association from state and local taxation, except on real
estate. Accordingly, personal
property owned by COMPANY, COMPANY is exempt from taxation by the State of Utah
or any of its political subsidiaries.
The personal property you specifically inquire about is a
“vehicle.” For purposes of this
opinion, we assume that the “vehicle” is one that is required to be registered
with the state and weighs 12,000 pounds or less. Such an item of personal property is also exempt from ad valorem
taxation under Utah Code Ann. §59-2-405.1, which insteads imposes a uniform fee
in lieu of ad valorem tax (“uniform fee”).
However, the Utah Legislature clearly establishes in subsection
59-2-405.1(2)(b)(iv) that “tangible personal property that is exempt from state
or county ad valorem property taxes under the laws of this state or the federal
government” is also exempt from the uniform fee.
In
summary, federal law exempts from ad valorem taxation the personal property,
including motor vehicles, owned by a federal land bank association such as
COMPANY, COMPANY. Utah law exempts from
the uniform fee any personal property that would be exempt from ad valorem
taxation under federal law. As a
result, the vehicle owned by COMPANY, COMPANY is also exempt from Utah’s
uniform fee. Accordingly, upon a
federal land bank association presenting a county with evidence, such as a
charter, indicating that it is such an entity, the county assessor should
exempt from taxation its personal property and from the uniform fee its motor
vehicles.
Although
you may have received indication earlier that a federal land bank association
would need to submit a form indicating that it is a federally designated
501(c)(3) organization, there is no such requirement. If you have any other questions, please contact us.
For
the Commission,
Marc
B. Johnson
Commissioner
MBJ/KC
02-002
[1] COMPANY, COMPANY, a federal land bank association, and COMPANY, COOMPANY, a federal production credit association, are both subsidiaries of COMPANY, COMPANY, a holding company. This advisory opinion addresses whether personal property owned by COMPANY, COMPANY is taxable. The Tax Commission and COMPANY, COMPANY already agree that personal property owned by COMPANYCOMPANY is taxable.