Ski areas must pay taxes on property

A one-vote majority of the Colorado Supreme Court ruled yesterday that ski resorts must pay property taxes on land leased from the federal government.

The court ruled that a law passed by the state Legislature in 1996 violated Article X of the state constitution, because it created a special tax exemption for companies that operate recreational enterprises on federal property.

“Unless constitutionally authorized, the legislature may not exempt some interests in federal property from taxation while taxing others,” wrote Justice Gregory Hobbs for the majority.

In Pitkin County, the decision means that the county government will not be required to refund hundreds of thousands of dollars in taxes to the Aspen Skiing Co. and a few other local businesses. If the ruling had gone the other way, the county would have had to write sizable refund checks for the taxes collected since 1996, plus 12 percent interest.

“It’s a big deal for us,” said Pitkin County assessor Tom Issac. “It means we can continue to tax the Aspen Skiing Company for its use of federal property.”

Issac couldn’t say exactly how much money the decision would mean for the county’s coffers. But he was willing to say, “It’s quite a bit of money.”

The Skico’s finance director, Ken Hammerle, could not be reached for comment.

According to press reports from 1996, the Skico paid property taxes of $85,751 in 1995 for its use of property owned by the U.S. Forest Service. The 1996 law that was overturned yesterday did not exempt the Skico from paying taxes on property it owns, only on property it leases from the federal government.

According to the ruling, the roots of the case date back to 1972, when the state Supreme Court determined a concessionaire at Mesa Verde National Park, through its lease with the federal government, “had a right to the occupation, use, enjoyment and profits of the property” and could thus be taxed on its “possessory interest” in the property.

By the late 1980s, the state Legislature had granted property tax exemptions on the possessory interests of several private companies operating on federally owned land, including the concessionaire who was ordered to pay taxes in 1972.

In 1995, the state Supreme Court overturned those exemptions. But the next year the state Legislature passed a new law reauthorizing the exemptions overturned by the court and granting new ones to ski areas and other recreational users.

Yesterday’s 4-3 ruling by the court overturned two 1998 rulings by the state Court of Appeals upholding the law and its exemptions. One of the cases in question was Eagle County Board of County Commissioners v. Vail Associates Inc.

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Posted: Tuesday, February 27, 2001