Court Opinion

ID: 9602348
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:53:26.727366+00
Date Added: 2024-06-11T18:02:02.842471
License: Public Domain

Dolliver, J.
(concurring in part, dissenting in part)— The majority has concluded that portion of the rent attributable to favorable location and to having access to the stream of commerce is taxable. I dissent on this issue. I concur with the majority's finding that franchise rights, such as exclusivity rights in this case are not taxable under RCW 82.29A, and that the pedestrian thoroughfares intersecting the Fun Forest area may be computed in the taxable square footage in MAC's lease.
At the outset, the majority cites the rule that tax exemptions are to be strictly construed. While true, I believe this leads to an erroneous perspective of the case. The issue before the court is not to construe the scope of an exemption, but rather the scope and extent of the tax itself.
The majority states, "In light of the tax's purpose, the portion of the rent attributable to favorable location, and to having access to the 'stream of commerce,' must be taxable." The purpose of the tax is to collect from the lessees of public property certain sums "to fairly compensate governmental units for services rendered to such lessees of publicly owned property". RCW 82.29A.010. The tax is to apply to the "leasehold interest" as it is defined in the statute. Why it would "defeat the purpose of the tax" not to hold that access is an "other right" is not made clear.
I believe the difficulty with the majority analysis is that it construes access to "the stream of commerce" and access to a "favorable location" to be one and the same. This, of course, results in the conclusion that "favorable location" is *974an element logically factored into the leasehold interest.
However, access "to the stream of commerce" and "favorable location" are two distinct and separate ideas. Access to the stream of commerce means much more than just a favorable location. For example, a landlord who owns a favorable location on a busy intersection has a favorable location to the flow of business traffic, yet cannot control access; there exist three other corners with virtually identical access. By contrast, certain landlords like the City of Seattle can often control access to a flow of business traffic. Their control is such that they can grant or deny access to that trafile. The City of Seattle as a landlord controls the access of business traffic — access to the stream of commerce — at Seattle Center.
As the trial court observed:
It is a mixed question of fact and law, but here I believe the plaintiff, Mac Amusement, receives more from the City of Seattle of value than just the leasehold interest. They receive more than just a good location. . . .
It is really, when you boil it down to be the only carnival — I don't know if "carnival" is the right word, but I think of it in that sense — that will have access to thousands of people, I suppose, who go to the Seattle Center
Trial court oral opinion, at 3, 5-6.
Plaintiff receives a favorable location; but it also receives more: a grant of access plus the denial of that grant to its competitors.
The trial court should be affirmed.
Brachtenbach, C.J., and Dimmick, J., concur with Dolliver, J.