Court Opinion

ID: 9810055
Source: CourtListenerOpinion
Date Created: 2023-08-31 21:38:46.629394+00
Date Added: 2024-06-11T13:39:20.894924
License: Public Domain

JUSTICE EID,
dissenting.
{82 The majority holds that the Concessionaires' possessory interests are taxable because they meet the three-part test of Board of County Commissioners v. Vail Associates, Inc., 19 P.3d 1263 (Colo. 2001). I have no issue with the majority's recitation of the three factors, including the independence prong, which requires "an interest that provides a revenue-generating capability to the private owner independent of the government property owner." Id. at 1279. The problem with the majority's opinion is that it simply applies the three-factor test without fleshing out what the test is meant to capture-namely, the "significant incidents of private ownership" that make the interest taxable in the first place. Id. In my view, an ownership interest is "significant" when it is akin to "private ownership," as was the case in Vail Associates. Id. at 1267, 1278-80 (finding the "occupancy, use, and enjoyment of 12,590 acres of federal land ... for the operation of its ski area through [the year 2081]" demonstrated "significant incidents of private ownership" and thus was taxable). Without a sense of what counts as a "significant" ownership interest, application of the factors devolves into the simple identification of any evidence that the particular factor exists. For example, under the majority's approach, any evidence that the Concession*890aires' operations are independent of government control-however meager that may be-is sufficient to meet the independence prong. In the end, the majority's analysis leads to the result that the legislature sought to avoid-namely, "that the taxation of any possessory interest might lead to the taxation of all possessory interests, no matter how de minimis." Id. at 1278. Because the majority simply applies the three-part test of Vail Associates without a sense of what counts as a "significant" private ownership interest, I respectfully dissent from its opinion.
« 83 We derived the three-part test in Vail Associates from Mesa Verde Company v. Montezuma Board of County Commissioners (Mesa Verde I), 495 P2d 229 (Colo. 1972), which involved the taxation of various facilities and improvements built on national park land since 1987 by the park's exclusive concessioner. The concessioner argued that the improvements were, like the land, owned by the federal government, and thus were tax exempt. Id. at 280. We rejected that position, concluding that the only thing that distinguished the concessioner's interest in the improvements from full private ownership was the fact that the concessioner lacked "bare legal title" to them. Id. at 238. We noted that the contract between the con-cessioner and the government gave the con-cessioner "a possessory interest in all [improvements] consisting of all incidents of ownership, except legal title" Id. at 280, 232 (emphasis added). "[Ilt appears," we continued, "that the [concessioner] has full use of the improvements, as well as the right to operate these properties for private profit." Id. at 283. In such cases, "where a party has the right to possession, use, enjoyment, and profits of the property," it cannot avoid a "fair and just share of state taxation." Id. (concluding that "all the evidence indicates that the most significant incidents of ownership are possessed" by the concession-er).
11 84 We distilled this language from Mesa Verde I into the three-part test in Vail Associates: "(1) an interest that provides a revenue-generating capability to the private owner independent of the government property owner; (2) the ability of the possessory interest owner to exclude others from making the same use of the interest; and (8) sufficient duration of the possessory interest to realize a private benefit therefrom." 19 P.3d at 1279 (citing Mesa Verde I, 495 P.2d at 233). But importantly, the factors grew out of the "significant incidents" of ownership that the concessioner possessed by contract in Mesa Verde I-namely, "all incidents of ownership" except for legal title. 495 P.2d at 2832. Similarly, Vail's permit from the federal government "entitled Vail to the occupancy, use, and enjoyment of 12,590 acres of federal land ... for operation of its ski area through ... 2031"-that is, all but legal title. 19 P.3d at 1267. Indeed, the fact that Vail's interest was akin to private ownership was so obvious we hardly analyzed the interest. Id. at 1280 {simply stating, without analysis, that the three-part test was met); see also maj. op. € 43 (noting that "[wle discussed neither the source of the ski resort's revenues nor any restrictions the government placed on the resort's operations").
1 85 In sum, when we spoke in Mesa Verde I and Vail Associates of significant incidents of ownership, we were talking about an interest analogous to private ownership. In both cases, the government owned the land, but the concessioner owned and substantially controlled the operations that took place on the land to such a degree as to be analogous to a private owner. Their interests were therefore taxable.
1 86 The possessory interests held by the Concessionaires in this case bear no resemblance to the interests at issue in Mesa Verde I and Vail Associates The City controls virtually every aspect of the Concessionaires' business. As the majority acknowledges, maj. op. I1 9, 51-54, it controls what products they can sell, what their menus must include, what they can charge for their products, what hours they must operate, whom they may hire, and what improvements they may make. In my view, the Concessionaires' control of their business operations is not analogous to private ownership, and therefore their possessory interests do not display the requisite "significant incidents of private ownership." Future cases might be closer *891and require difficult line drawing, but this is not one of them.
187 The majority applies the independence prong to these facts and concludes that "the City's operating restrictions in this case do not deprive Concessionaires of the independent revenue-generating capability of their concession spaces." Id. at T41. In other words, as long as a concessioner has any independence to generate revenue, its interest is taxable. And as the majority later concludes, although the City controls "some" aspects of their business, these operating restrictions do not "convert Concessionaires into agents or partners of the City." Id. at €54. This is simply the other side of the "any independence" coin: as long as a con-cessioner is not a government entity, any possessory interest it may hold must be taxable. But importantly, this is precisely the situation the legislature sought to avoid-namely, that the taxation of any possessory interest would lead to the taxation of all possessory interests, "no matter how de min-imis." Vail Associates, 19 P.3d at 1278. In Vail Associates, we expressly disavowed such a result, stating that "[olur decision does not reach so far." Id. But today the majority has reached "so far."
1 88 In the end, if a set of factors is applied without regard to the ultimate goal to be reached, the factors amount to nothing more than a list to be checked off and added up. But we have expressly disavowed this approach in other contexts, including, most recently, the set of factors to be considered in determining whether a defendant's statements during custodial interrogation are voluntary. See, e.g., People v. Liggett, 2014 CO 72, ¶ 22, 834 P.3d 231, 237 (cautioning that a list of thirteen factors used to determine whether a defendant's statements made during custodial interrogation were voluntary must be applied not as a mechanical checklist, but rather "to inform the ultimate inquiry, which is whether the police's conduct was coercive so as to overbear the defendant's will") (citing People v. McIntyre, 2014 CO 39, ¶ 16, 325 P.3d 5836 587). Here, the ultimate inquiry is whether the possessory interest in question approximates private ownership such that it is taxable.
{89 Under my analysis, it is unnecessary to reach the valuation question in this case. I note, however, that the "significant incidents of private ownership" question is related to the valuation component if the ultimate taxable interest is not adequately developed and defined, difficulties in placing a value on that interest will follow. See maj. op. 1157-71; cone. & dis. op. 11 77-81. Because I do not believe the Concessionaires' possessory interests are taxable in the first instance, I respectfully dissent from the majority's opinion holding otherwise.
I am authorized to state that JUSTICE COATS joins in this dissent.