Segroves v. Supervisor of Assessments

Moore, J., delivered the opinion of the Court. ⁴⁹⁰ Appellants have tried for four years to elude the impact of Art. 81, § 8 (7) (a), Md. Ann. Code (1980 Repl. Vol.) by appealing the tax assessments on their respective homes to the Property Tax Assessment Appeal Board, the Maryland Tax Court, the Circuit Court for Harford County (Higinbothom, J.), and now this Court. Their persistence may be commendable, but their arguments are as lacking in merit today as they were at the beginning. The provision they seek to escape plainly embraces them; accordingly, we shall affirm the court below.

I The Eastern Christian College bought 44 acres in Bel Air, Harford County, Maryland, in 1961. Two small parcels of land were leased to appellants, J. Thomas Segroves and Paul Bajko, in 1964 for 99 years. The purpose of the leases was to allow Mr. Segroves, who was then president of the college and is now chancellor, and Mr. Bajko, who directs the college’s Department of Missions, to obtain the financing with which to build their homes. The leases provide that appellants are responsible for property taxes and that the college has the right to purchase Mr. Segroves’ house if he leaves the college and Mr. Bajko’s house if he ceases Christian missionary work.

Until 1976, the appellants enjoyed an exemption from assessment and property tax as part of the college’s educational exemption under Art. 81, § 9 (e). This was corrected in 1976 when a new county Supervisor of Assessments determined that the leaseholds were in fact owned by the appellants, not the college, and thereafter denied their requests for exemptions. 1 ⁴⁹¹ II Appellants have devoted their efforts on appeal to three contentions: 1) The equitable and beneficial owner of the properties in question is the Eastern Christian College, a tax-exempt educational institution, because it is in possession and control under Art. 81, § 4 (c). 2) The properties are used exclusively for religious and educational purposes, are essential and vital to the college’s operation, and thus should be exempt from taxation under Art. 81, § 9 (a) and (e). 3) The effect of taxing the properties would be to allow the appellants to indemnify themselves from the college under Art. 81, § 4 (c) and such indemnity would constitute an indirect tax on a religious educational institution, contrary to Art. 81, § 9 (a) and (e). Each of these contentions simply ignores the statutory provisions. First, Eastern Christian College relinquished any entitlement to exemption of the properties by signing 99-year leases with appellants.

Art. 81, § 8 (7) (a) is clearly applicable: (7) Leaseholds and other limited interests in real or personal property. — No leasehold or other limited interest in real or tangible personal property shall be subject to taxation except the following which shall be subject to taxation in the same amount and the same extent as though the person in possession or the user thereof were the owner of such property. (a) The interest of a tenant under a ninety-nine year lease of real property within this State, whether or not renewable, or under a lease for a shorter term which is perpetually renewable. (Emphasis added.) ⁴⁹² The holder of the leasehold interest for 99 years is treated in the same manner as if he were the owner of the property. Here, even though the college has some control over the properties through its right of conditional purchase, the appellants as 99-year lessees are legal owners and in possession. 2 Thus, they are chargeable with the taxes thereon as owners of the fee.

Art. 81, § 4 (c) has no application.