United Air Lines, Inc. v. County of San Diego

The County of San Diego (County) appeals a summary judgment in favor of certain air passenger carriers (hereafter referred to collectively as Airlines), refunding taxes assessed on what the County determined to be their taxable possessory interests in the use of the San Diego International Airport (Airport), a facility owned and operated by the San Diego Unified Port District (Port District), a tax exempt governmental entity. 1 The County also appeals the denial of its own motion for summary judgment.

The trial court found: (1) the Airlines had no taxable possessory interest in the land since their use was not sufficiently exclusive; (2) the taxes were an indirect tax on the carriage of persons traveling in air commerce and prohibited by 49 United States Code, appendix section 1513(a); (3) the taxes unconstitutionally discriminated between taxpayers in the same class (commercial and general aviation); and, (4) the taxes violated federal statutes (49 U.S.C., appen. §§ 2210(a), 1305(b)). For the following reasons, we hold the trial court’s rulings are legally erroneous.

The Airlines reassert two additional grounds rejected by the trial court to support the summary…

? I concur in the result reached by the lead opinion and the majority of its reasoning. The only area of concern I have is the issue of exclusivity. While I would concede the trend has been to expand the concept of possessory interest almost beyond any limits (see Ehrman & Flavin, Taxing Cal. Property (3d. ed. 1989) § 3.08, ch. 3, p. 22), I agree with many of the *440 thoughts ably expressed in the dissent on the parameters of the exclusivity doctrine. Were we writing on a clean slate, I would be inclined to hold that a use of property is not “exclusive”—and hence not a taxable possessory interest—where the character of the use is identical to that shared with members of the general public on an unrestricted basis.

As the dissent implicitly recognizes, however (dis. opn., post, pp. 444-445), such an approach is difficult to square with the decision in Scott-Free River Expeditions, Inc. v. County of El Dorado (1988) 203 Cal.App.3d 896 [ 250 Cal.Rptr. 504 ]. There, the court held that the county could tax the possessory interest in a river held by 80 commercial rafting companies despite the fact that members of the general public enjoyed unrestricted use of tiie river for…

The taxability of possessory interests in real property, the fee of which is owned by tax-exempt entities, is well established. The evolution of the definition of a taxable “possessory interest” is set forth in a short but effective historical review in Freeman v. County of Fresno (1981) 126 Cal.App.3d 459, 462-464 [ 178 Cal.Rptr. 764 ], and described as a “protax trend.” (Id. at p. 463.) Ehraian and Flavin, in their text Taxing California Property, sum up the trend by stating: “There are almost no limits to which the possessory interest concept can be pushed.” (1 Ehrman & Flavin, Taxing Cal. Property (3d ed. 1989) § 3.08, ch. 3, at p. 22)

Originally viewed as an interest akin to a lease, as distinguished from a mere license (Kaiser Co. v. Reid (1947) 30 Cal.2d 610 [ 184 P.2d 879 ]), the definition of a “possessory interest” has been expanded to recognize a “property” interest in all manner of uses of tax-exempt property, many of which only vaguely resemble traditional common law concepts of an interest in land. (See the detailed summaries of uses set forth in Freeman v. County of Fresno, supra, 126 Cal.App.3d at p. 461, fn. 1 , and Scott-Free River Expeditions, Inc. v. County of…

The County of San Diego (County) appeals a summary judgment in favor of certain air passenger carriers (hereafter referred to collectively as Airlines), refunding taxes assessed on what the County determined to be their taxable possessory interests in the use of the San Diego International Airport (Airport), a facility owned and operated by the San Diego Unified Port District (Port District), a tax exempt governmental entity. [1] The County also appeals the denial of its own motion for summary judgment.

The trial court found: (1) the Airlines had no taxable possessory interest in the land since their use was not sufficiently exclusive; (2) the taxes were an indirect tax on the carriage of persons traveling in air commerce and prohibited by 49 United States Code, appendix section 1513(a); (3) the taxes unconstitutionally discriminated between taxpayers in the same class (commercial and general aviation); and, (4) the taxes violated federal statutes (49 U.S.C., appen. §§ 2210(a), 1305(b)). For the following reasons, we hold the trial court's rulings are legally erroneous.

The Airlines reassert two additional grounds rejected by the trial court to support the…