AGLO 1975 No. 6 - Jan 20 1975
TAXATION ‑- PROPERTY ‑- EXEMPTIONS ‑- PROPERTY OWNED BY FARMERS HOME ADMINISTRATION
Property held or acquired by the Farmers Home Administration pursuant to its loan programs (except for property used for administrative purposes of the agency) is subject to state ad valorem taxation to the same extent as other property.
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January 20, 1975
Honorable Fred Van Sickle
P.O. Box 338
Waterville, Washington 98858 Cite as: AGLO 1975 No. 6
By letter previously acknowledged you have requested our opinion on a question which we paraphrase as follows:
Is property, title to which is acquired or held by the Farmers Home Administration, a federal agency, subject to Washington's ad valorem property tax to the same extent as other general property in the county?
We answer this question in the affirmative subject to the single qualification set forth in our analysis.
Article VII, § 1 (Amendment 14) of the Washington constitution provides, in part, that:
". . . Property of the United States and of the state, counties, school districts and other municipal corporations, and credits secured by property actually taxed in this state, not exceeding in value the value of such property, shall be exempt from taxation. . . ."
However, this constitutional exemption has subsequently been modified through the adoption of Article VII, § 3 (Amendment 19) which reads as follows:
"The United States and its agencies and instrumentalities, and their property, may be taxed under any of the tax laws of this state, whenever and in such manner as such taxation may be authorized or permitted under the laws of the United States, notwithstanding anything to the contrary in the Constitution of this state."
[[Orig. Op. Page 2]] Likewise, while RCW 84.36.010 also expresses a similar exemption from taxation of "All property belonging exclusively to the United States, . . ." RCW 84.40.315 provides that:
"Notwithstanding the provisions of RCW 84.36.010 or anything to the contrary in the laws of the state of Washington, expressed or implied, the United States and its agencies and instrumentalities and their property are hereby declared to be taxable, and shall be taxed under the existing laws of this state or any such laws hereafter enacted, whenever and in such manner as such taxation may be authorized or permitted under the laws of the United States."
As a result of the interplay of these constitutional and statutory provisions, all property, real and personal, owned or held by the United States and its agencies and instrumentalities is subject to ad valorem property taxation to the extent authorized or permitted under applicable federal law. Thus, for example, property deeded to the veterans' administration in lieu of foreclosure remains taxable;1/ and personal property of the Federal Housing Administration is taxable, even though located on real property belonging to the United States under separate title.2/
Likewise, a search of the federal statutes dealing with the Farmers Home Administration, a federal agency involved in the administration of real estate and the making or guaranteeing of emergency loans to farmers and ranchers,3/ discloses that a similar situation presently exists. State taxation or property acquired or held by the Farmers Home Administration pursuant to its loan programs is permitted by 7 U.S.C. § 1984, [[Orig. Op. Page 3]] which provides as follows:
"All property subject to a lien held by the United States or the title to which is acquired or held by the Secretary [of Agriculture] under this chapter other than property used for administrative purposes shall be subject to taxation by State, territory, district, and local political subdivisions in the same manner and to the same extent as other property is taxed: Provided,however, That no tax shall be imposed or collected on or with respect to any instrument if the tax is based on‑-
"(1) the value of any notes or mortgages or other lien instruments held by or transferred to the Secretary;
"(2) any notes or lien instruments administered under this chapter which are made, assigned, or held by a person otherwise liable for such tax; or
"(3) the value of any property conveyed or transferred to the Secretary,
"whether as a tax on the instrument, the privilege of conveying or transferring or the recordation thereof; nor shall the failure to pay or collect any such tax be a ground for refusal to record or file such instruments, or for failure to impart notice, or prevent the enforcement of its provisions in any State or Federal court."
Thus, to the extent permitted by this statute, property held or acquired by the Farmers Home Administration pursuant to its loan programs (except for property used for administrative purposes of the agency) is subject to state ad valorem taxation to the same extent as other property. The general property tax exemption granted to the United States, RCW 84.36.010, supra, presents no barrier to the imposition of property taxes on such property because such taxation is specifically authorized by federal and state law; i.e., RCW 84.40.315, supra, 7 U.S.C. § 1984, supra, and Wash. Const., Article VII, § 3 (Amendment 19), supra.
[[Orig. Op. Page 4]] We trust the foregoing has been of some assistance to you.
Very truly yours,
MATTHEW J. COYLE
Assistant Attorney General
*** FOOTNOTES ***
1/AGO 55-57 No. 351 [[to Roger L. Olson, Prosecuting Attorney, Franklin County on December 17, 1956]], copy enclosed.
2/AGO 57-58 No. 189 [[to Maloy Sensney, Prosecuting Attorney, Benton County on May 7, 1958]], copy enclosed. See, also,Boeing Aircraft Co. v. R.F.C., 25 Wn.2d 652, 171 P.2d 838 (1946).
3/7 U.S.C. §§ 1981 and 1921.