Tri-Cities Children's Center, Inc. v. Board of Supervisors

Opinion

LOW, P. J.

We hold that a leasehold interest in a parcel of public property is exempt from property taxes if the lessee uses the leasehold for charitable purposes.

[591]

Plaintiff Tri-Cities Children’s Center, Inc. (Tri-Cities) brought an action for a refund of property taxes and for a declaration that its leasehold interest in real property owned in fee by the Fremont Unified School District was exempt from property taxation. The trial court granted plaintiff’s motion for summary judgment on the grounds that the words “property . . . owned” as used in Revenue and Taxation Code section 214

1

are not limited to a fee ownership, but also apply to the separate ownership of a leasehold interest in publicly owned land. We affirm.

Tri-Cities is a nonprofit charitable corporation and leases portions of a school owned by the Fremont Unified School District of Alameda County. Tri-Cities operates a nursery school on the leased premises for handicapped and disadvantaged children. The Alameda County tax assessor levied real property taxes on account of plaintiff’s possessory interest in the property that it leased. Tri-Cities paid Alameda County the assessed taxes under protest. After exhausting its administrative remedies, Tri-Cities filed suit for refund.

Constitutional and statutory provisions granting exemption from taxation are to be strictly construed and such concessions will not be extended beyond the plain meaning of the language employed.

(Cypress Lawn C. Assn.

v.

San Francisco

(1931) 211 Cal. 387, 390 [295 P. 813];

Honeywell Information Systems, Inc.

v.

County of Sonoma

(1974) 44 Cal.App.3d 23, 27 [118 Cal.Rptr. 422].) All property is subject to taxation unless it is specifically exempted by law. (Cal. Const., art. XIII, § 1.) Article XIII, section 4 of the California Constitution, which provides authority for section 214, states in part: “The Legislature may exempt from property taxation in whole or in part: . . . [H] (b) Property used exclusively for religious, hospital, or charitable purposes and owned or held in trust by corporations or other entities (1) that are organized and operating for those purposes, (2) that are nonprofit, and (3) no part of whose net earnings inures to the benefit of any private shareholder or individual.”