TAXATION - OF FHA PERSONAL PROPERTY ‑- WAIVER OF IMMUNITY BY UNITED STATES

TAXATION ‑- OF FHA PERSONAL PROPERTY ‑- WAIVER OF IMMUNITY BY UNITED STATES.

Personal property acquired by the FHA under 12 U.S.C.A. § 1707, et seq., located on real property belonging to the United States under separate title may be assessed for ad valorem personal property taxes.

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                                                                    May 7, 1958

Honorable Maloy Sensney
Prosecuting Attorney
Benton County
Fisk Building
Prosser, Washington                                                                                                  Cite as:  AGO 57-58 No. 189

Attention:  Mr. Herbert H. Davis, Deputy

Dear Sir:

            You recently requested our opinion on several questions relating to taxation of property owned by the Federal Housing Administration.  We paraphrase your questions as follows:

            (1) Is the FHA liable for 1958 personal property taxes levied in October, 1957, by Benton County against personalty acquired by the FHA upon a mortgage foreclosure in December, 1957, when the personal property is located on real property belonging under separate title to the United States?

            (2) May Benton County assess and levy ad valorem taxes for 1959 and subsequent years against personal property acquired by the FHA situated on real property belonging to the United States?

            Our answer to both questions is in the affirmative.

                                                                     ANALYSIS

            If personal property acquired by the FHA is subject to ad valorem taxes, then the  [[Orig. Op. Page 2]] FHA is liable for 1958 taxes.  Thus, the underlying problem, as raised in your second question, is whether personal property acquired by the FHA is exempt from taxation, or, stated in another way, has Congress waived immunity from local taxation over such property?

            Admittedly, the real property owned by the federal government under separate title upon which the personal property of the FHA is located is exempt from taxation.  Whether Congress has released its tax immunity over the personal property acquired by the FHA is dependent upon the provisions of 12 U.S.C.A. § 1707, et seq., the act under which the FHA foreclosed and acquired the property?

            12 U.S.C.A. § 1714 provides:

            "Nothing in this subchapter shall be construed to exempt any real property acquired and held by the Commissioner under this subchapter from taxation by any State or political subdivision thereof, to the same extent, according to its value, as other real property is taxed."

            Under the above provision, Congress has clearly waived tax immunity to any real property acquired by the FHA under 12 U.S.C.A. § 1707, et seq.  From the standpoint of statutory construction, it would appear that under § 1714,supra, personal property not being expressly included therein is to be accorded exempt status.  Under the 19th Amendment of our state constitution property of the United States may be taxed when authorized or permitted by the laws of the United States.  Under the result ofState ex rel. Ferguson, FHA Administrator v. Donnell, 349 Mo. 975, 163 S.W. (2d) 940 (1942), personal property acquired by the FHA was nevertheless held to be impliedly within the waiver of immunity provisions of § 1714,supra.

            In theDonnell case the FHA had acquired certain personal property upon foreclosure under the above cited federal statutes.  The personal property had been assessed by the St. Louis County Assessor and subsequently contested by the FHA Administrator.  The court first concluded that the federal law was broad enough to authorize the FHA Administrator to acquire personal property.

            In referring to § 1714,supra, the court said:

            "We think that when Congress provided that state taxes on real estate should not be exempted, it also impliedly  [[Orig. Op. Page 3]] provided that a state tax on personal property held by the Federal Administrator that was necessary to the use of the real estate should not be exempted.  There could be no reason for any such distinction between real property and such personal property."

            Accordingly, on the basis of the above decision construing § 1714,supra, to include personal property, we conclude that Benton County may impose ad valorem taxes against the personal property acquired by the FHA and collect the same for 1958 and during the time title thereto is held by the Commissioner.

            We trust the foregoing answers your inquiry.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

ROBERT L. SIMPSON
Assistant Attorney General