Vanguard Car Rental USA, Inc. v. County of San Mateo

—The County of San Mateo (County) assessed ad valorem property taxes on certain areas leased in common by Vanguard Car Rental USA, Inc. (Vanguard), within a rental car facility at San Francisco International Airport (SFO). Vanguard protested the assessments, first to the County and then in the superior court, and sought a refund of taxes paid. The County denied the protest. The superior court, on a stipulated evidentiary record, concluded that Vanguard had a taxable possessory interest in the subject areas and entered judgment for the County. Vanguard appeals, broadly contending that a commercial tenant on public property cannot, as a matter of law, have a taxable possessory interest in defined common areas. We disagree and will affirm the judgment.

I. Factual and Procedural Background

SFO is located in San Mateo County, but owned by the City and County of San Francisco (City). In 1998, Alamo, by written agreement with City (Alamo Lease), leased space at SFO’s rental car facility (RCF). At the same time, National entered into a nearly identical written lease agreement (National Lease). The two lease agreements reflect that six other rental car companies were also to…