This GT Alert addresses the recent Court of Appeal decision in DFS Group LP v. County of San Mateo (Calif. Ct. App., 1st Dist., January 31, 2019, 31 Cal.App.5th 1059; Petition for Review denied by Calif. Supreme Ct., April 24, 2019), which held that local assessors and assessment appeals boards must address intangible assets in their assessment of property for property tax purposes, including intangibles relating to exclusive operating rights at an international airport.
Intangible assets are exempt from property tax assessment in California. The exemption extends to cash, government permits, intellectual property, assembled workforce, working capital, favorable contracts, naming rights, training and instruction manuals and, in DFS Group, an exclusive concession to operate a business on government-owned property. In short, California assessors can assess the real property on which a business is located, and the personal property used by the business, but cannot assess “business enterprise” or other intangible assets.
To read the full GT Alert, click here.
For more on SALT, click here.