Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

AGO 1977 NO. 8 > Mar 3 1977

(1) When improvements are added to publicly owned property which has been leased to a person who would not be exempt from ad valorem property taxes if that person owned the property involved, those improvements are subject to ad valorem property taxation as personal property of the private lessee if title to the improvements resides with the private lessee until expiration of the lease.  (2) Where, on the other hand, title to the improvements vest immediately upon their affixation or completion in the public lessor, such improvements are exempted by statute from ad valorem taxation and the private lessee's expenditures for the improvements are subject to the leasehold excise tax.