TAXATION-ASSESSMENT OF GOVERNMENT-OWNED PROPERTY LEASED TO PRIVATE ENTERPRISE

Authors

Allen C. Holmes, University of Michigan Law SchoolFollow

Abstract

The Board of Property Assessment, Appeals, and Review of Allegheny County for ad valorem taxes in the state of Pennsylvania increased the assessed value of the realty of the Mesta Machine Company by the sum of $618,000 to include the value of certain additional machinery which had been installed on the premises. The machinery was leased by the United States Government to the company and was placed in the factory in order that the company might manufacture heavy field guns for the Government, under a cost-plus-fixed-fee contract. The legal title and the beneficial ownership of the machinery remained in the United States; the machinery was leased to the company for the nominal consideration of one dollar under a contract which provided that the company could not use it for any other purpose than the manufacture of guns for the United States. The court of common pleas of Allegheny County disallowed the assessment and the board appealed to the Supreme Court of Pennsylvania. Held, the machinery became part of the realty when it was placed in the factory and could be taxed along with the land and building belonging to the company. The legal obligation to pay the tax was on the company, not the Government; the voluntary agreement of the Government to pay the tax, therefore, is immaterial. Appeal of Mesta Machine Co., 347 Pa. 191, 32 A. (2d) 236 (1943).

Recommended Citation

Allen C. Holmes, TAXATION-ASSESSMENT OF GOVERNMENT-OWNED PROPERTY LEASED TO PRIVATE ENTERPRISE, 42 Mich. L. Rev. 936 (1944).
Available at: https://repository.law.umich.edu/mlr/vol42/iss5/14