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AGO 1961 No. 36 - June 07, 1961
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John J. O'Connell | 1957-1968 | Attorney General of Washington

TAXATION ‑- REAL PROPERTY ‑- AUTHORITY OF KITSAP COUNTY TO TAX PROPERTY OF KITSAP COUNTY FAIR ASSOCIATION

Kitsap county may legally assess and tax property the title to which is held by the Kitsap county fair association, even though the fair association has been named the agent for the county fair by the county commissioners.

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                                                                    June 7, 1961

Honorable Gordon L. Walgren
Prosecuting Attorney
Kitsap County
245 Fourth Street Building
Bremerton, Washington

                                                                                                                Cite as:  AGO 61-62 No. 36

Dear Sir:

            By letter previously acknowledged you requested an opinion of this office concerning the following question:

            "May Kitsap County assess and tax property, the legal title to which is held by the Kitsap County Fair Association, when the Fair Association has been named the agent, by resolution, of the county fair?"

            We answer this question in the affirmative as qualified in the analysis.

                                                                     ANALYSIS

            The Kitsap county fair association is a private nonprofit corporation formed under chapter 24.04 RCW.  The purpose clause of its articles empowers it to hold a fair in Kitsap county, to have exhibits of all kinds, relating to agriculture, horticulture, and animals, to provide premiums and prizes and to generally carry out the ordinary function of a county fair.

            RCW 84.40.010 sets forth the property subject to taxation and provides:

             [[Orig. Op. Page 2]]

            "All property now existing, or that is hereafter created or brought into this state, shall be subject to assessment and taxation for state, county, and other taxing district purposes, upon equalized valuations thereof, fixed with reference thereto on the first day of January at 12 o'clock meridian in each year, excepting such as is exempted from taxation by law."

            Chapter 84.36 RCW sets forth the exemptions to such property tax, some of the property being exempt because of its use and other property being exempt because itslegal title is held by some exempt entity.

            In the instant case the legal title to the property is held by the Kitsap county fair association which has also been named by the county commissioners as agent to run the county fair.  Thus, the fair association participates in a public endeavor sponsored by the county commissioners.  However, this agency relationship is solely to permit the allocation of public funds to the fair, which fair, although run by the fair association, is in reality a fair under the control and supervision of the county and thus may receive allocations of public funds for its support.  This relationship would not in any manner change the taxable status of the property, since the Kitsap county fair association still holds legal title to the property in question.

            We find no provision in the exemption statutes which would exempt property, the legal title to which is held by a private nonprofit association, such as the Kitsap county fair association.

            However, RCW 84.36.030 exempts property used for a certain purpose and provides in part that:

            "The following property shall be exempt from taxation:

            ". . .

            "Property of nonprofit organizations or associations engaged in character building in boys and girls under twenty-one years of age, to the extent such property is necessarily employed and devoted solely to the said purposes, provided such purposes are for the general public good and such properties are devoted to the general public benefit;"

            Thus, it may be that a portion of the property of the fair association, to the extent such property is necessarily employed and  [[Orig. Op. Page 3]] devoted solely to the character building of boys and girls under twenty-one years of age, for example, property used solely for "4-H" and Future Farmers of America (FFA) divisions of the fair could be exempt from taxation.

            It must be remembered that the property can only be exempted if it can reasonably be segregated.  Our supreme court inNorwegian Lutheran Church v. Wooster, 176 Wash. 581, 590, 30 P. (2d) 381 (1934) stated:

            "The language of the statute 'wholly used, or to the extent solely used,' indicates the possibility of segregation in some cases.  Here, clearly all those parts of the building which are rented to others are subject to taxation, and if susceptible of segregation, may be taxed separately; while the remainder of the building used for a chapel and the benevolent work carried on in connection therewith, if it can be segregated, is clearly entitled to exemption under the terms of the statute."

            Also in the case ofWilson's Modern Business College v. King County, 4 Wn. (2d) 636, 104 P. (2d) 580 (1940), the court held that where a business college rented a portion of the first floor of its building and used the remainder for educational purposes, the trial court properly held that the rented portion of the building, and a proportionate part of the land, was subject to taxation, while the remainder was not, the taxation of the rented portion being based on the ratio of value which it bore to the whole property.

            Therefore, it is our opinion that although the Kitsap county fair association has been named agent by resolution of the county commissioners, such relationship would not alter the fact that such association still owns the legal title to the property and hence such property would be subject to taxation by the county, since there is no applicable exemption for such property in chapter 84.36 RCW.  However, if the property is susceptible of segregation, that portion of the property of the Kitsap county fair association, which is necessarily employed and devoted solely to the character building of boys and girls under twenty-one years of age, would be exempt from taxation; an example would be that portion of the property used solely for "4-H" and FFA divisions of the fair.

            We enclose herewith a copy of AGO 53-55 No. 229 [[to Prosecuting Attorney, Spokane County on March 24, 1954]]holding that the Spokane Junior Livestock Show comes within the provisions of the  [[Orig. Op. Page 4]] exemption statute (RCW 84.36.030) quoted in this opinion.

            We trust the foregoing will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

RICHARD M. MONTECUCCO
Assistant Attorney General

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