Court Opinion

ID: 6733955
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:16:22.451518+00
Date Added: 2024-06-11T16:01:42.266518
License: Public Domain

CLARK, Judge.
The Foundation contends first that its forest property is exempt from ad valorem taxation, and second that, even if it is not exempt, the County’s assessment is erroneous. In a companion *434case, In The Matter Of The Appeal Of: North Carolina Forestry Foundation, Inc. From The Assessment Of Its Property Known As The “Hofmann Forest” For Ad Valorem Taxation By Onslow County For 1974 And 1975, No. 76CVS2618, this Court in an opinion filed concurrently decided the issue of exemption, holding that the Hofmann Forest was not exempt from ad valorem taxation, and we accept and concur in the decision.
The Foundation’s attack on the trial court’s affirmation of the Tax Commission’s adoption of the County’s assessment is without merit. In order to show error, the taxpayer must show that the tax supervisor used an arbitrary method of valuation, or that he used an illegal method. The assessment must substantially exceed the true value of the property. In re Appeal of Amp, Inc., 287 N.C. 547, 215 S.E. 2d 752 (1975). The Foundation produces no evidence that the assessment substantially exceeded the true value or that the supervisor was arbitrary. The Foundation’s main attack went to the method of valuation which failed to exclude the leasehold. Although a lease is a chattel real, and, prior to 1971, intangible personal property, it has always been taxed ad valorem and not by the State intangibles tax. Bragg, Inv. Co. v. Cumberland County, 245 N.C. 492, 96 S.E. 2d 341 (1957). While it is true that, prior to 1971, the leasehold was taxable to the lessee, and deducted from the value of the fee taxable to the lessor, the 1971 General Assembly changed the arrangement. Now leases are intangible personal property only when they are leases in “exempted real property.” G.S. 105-273(8). Thus, the only leases taxable to the lessee are leases on fees exempt from taxation on the lessor. Where the fee is nonexempt, the lease is not intangible personal property and is taxable to the owner, as is all real and personal property not exempt under G.S. 105-274. The Foundation’s exclusion of the long-term lease from the assessment of ad valorem taxes is directly contrary to the statutory mandate.
The Superior Court’s affirmation of the Tax Commission’s holdings, adopting the County Boards conclusions that the Forest is non-exempt property and that the Jones’ County assessment of $100 an acre was not excessive, is
Affirmed.
Judges Morris and Mitchell concur.