Tax Type
Property Tax
Description
Land Leased by Towns and Churches; Taxability
Topic
Property Subject to Tax
Date Issued
07-02-1965
This will acknowledge your letter of July 1, which reads as follows:
"One of the incorporated towns in Mecklenburg County owns what used to be a small farm of 41 acres. The town receives some rent for the tobacco acreage as well as a little income from rental of the houses on the place.
"Under § 183 of the Constitution it appears that property owned by a political subdivision is exempt from taxation, but inasmuch as a portion of this real estate is rented, I would like your opinion as to whether or not it is tax free.
"Also some of our churches own land from which they receive income from rent. Would such property be exempt from local taxation?'
It is true that § 183 of the Constitution exempts from taxation property owned by a town. It is further provided in the fourth paragraph of subsection (g) of this Constitution provision as follows:
- "Whenever any building or land, or part thereof, mentioned in this section, and not belonging to the State, shall be leased or shall otherwise be a source of revenue or profit, all of such buildings and land shall be liable to taxation as other land and buildings in the same county, city or town. But the General Assembly may provide for the partial taxation of property not exclusively used for the purposes herein named.'
Under this paragraph the land owned by the town and leased would cease to be tax free during the time it is leased. This same situation would apply to property owned by a church.
Attorney General's Opinion