SILVER SPRINGS PROPERTY OWNERS RECREATIONAL IMPROVEMENT DISTRICT NO. 30 OF HASKELL, Arkansas, Appellant
Jeff AREY, Saline County Judge; Bob Ramsey, Saline County Assessor; Joy Ballard, Saline County Collector; Saline County Quorum Court; Saline County Board of Equalization; and Saline County, Arkansas, Appellees
FROM THE SALINE COUNTY CIRCUIT COURT [NO. 63CV-16-932],
HONORABLE GRISHAM PHILLIPS, JUDGE
Law Firm, by: Bobby McCallister, for appellant.
Ford, for appellees.
D. VAUGHT, Judge
Springs Property Owners Recreational Improvement District
No. 30 of Haskell, Arkansas ("Silver Springs" or
"the District"), appeals the Saline County Circuit
Courts denial of its request for a
public-use/public-ownership exemption to ad valorem taxation.
Springs is a statutorily created, quasi-governmental entity
that exists in Haskell, Arkansas. It encompasses a
residential neighborhood and 156 acres of recreational
facilities, which include a golf course, tennis courts, a
swimming pool, and two buildings. Silver Springs purchased
the recreational facilities in 2011 from Doug Loftin, who
originally created the improvement district and developed the
golf course, the swimming pool, and all other facilities on
the property are open to the public and have been since
before they were purchased by the improvement district. There
are fees for the use of these facilities. There are also
assessments against the properties in the neighborhood. The
assessment is $540 per year for each lot. The daily fee for
playing golf at the course for the general public is $25. The
daily fee for use of the pool is $5. A membership to the
facility can be purchased for $99 per month for nonresidents
and $59 per month for residents who pay a $540 per-year
assessment to the District. Those residents are given a
credit of $40 per month toward their membership to the
recreational facility, bringing their monthly payment down
from $99 per month to $59.
Portions of the clubhouse are leased to a third-party vendor
that provides restaurant services, manages the bar, and
occasionally operates the cash register in order to take
payment from golfers. The third-party vendor operates the
restaurant for profit.
the purchase of the recreational facilities by the District,
ad valorem taxes have not been paid to Saline County. Doug
Loftin made the District commissioners aware of this in 2015,
and the District commissioners then filed a request to be
declared exempt from ad valorem taxation as a result of the
Saline County Judge denied the Districts request for exempt
status, and the matter was appealed to the Saline County
Circuit Court. The circuit court likewise denied the
exemption on October 29, 2018, and this appeal followed.
party seeking a tax exemption has the burden of proving its
claim for tax-exempt status beyond a reasonable
doubt. Pledger v. Baldor Intl, 309
Ark. 30, 827 S.W.2d 646 (1992). Tax exemptions are strictly
construed against the exemption and "to doubt is to deny
the exemption." Id. at 33, 827 S.W.2d at 648.
The court in Arkansas Conference Assn of Seventh Day
Adventist, Inc. v. Benton County Board of Equalization,
304 Ark. 95, 800 S.W.2d 426 (1990), stated that
[i]n Arkansas the rule of strict construction applies to tax
exemptions, therefore the term "exclusively" is to
be narrowly construed. Hilger v. Harding College,
231 Ark. 686, 331 S.W.2d 851 (1960). Moreover, "[t]o
determine whether property is used exclusively for a
particular purpose, generally it is necessary to look to the
primary use to which the property is put and not to the
secondary use." 2 T. Cooley, The Law of Taxation § 685
(4th ed. 1924).
304 Ark. at 97, 800 S.W.2d at 427. On appeal, we review such
cases de novo and will not reverse absent a finding that the
circuit courts finding was clearly erroneous. Id.
article 16, section 5 of the Arkansas Constitution, public
property used exclusively for public purposes shall be exempt
from taxation. Arkansas Code Annotated section 26-3-301(10)
(Repl. 2012) states that: "[p]ublic property which may
be reserved for use by any person or organization, with or
without fee for such use, and is being used exclusively for
public purposes, regardless of whether the event for which
the property is reserved is open for attendance or
participation by the general public" shall be exempt
from taxation. It is not enough that public ...