                              IN THE
           ARIZONA COURT OF APPEALS
                           DIVISION ONE




                    HUB PROPERTIES TRUST,
               a Maryland real estate investment trust,
                         Plaintiff/Appellant,

                                  v.

  MARICOPA COUNTY, a political subdivision of the State of Arizona;
         THE ARIZONA DEPARTMENT OF REVENUE,
              an agency of the State of Arizona,
                    Defendants/Appellees.

                        No. 1 CA-TX 14-0005
                         FILED 8-20-2015


         Appeal from the Superior Court in Maricopa County
                           TX2011-000654
                 The Honorable Dean M. Fink, Judge

                            AFFIRMED


                             COUNSEL

Mooney, Wright & Moore, PLLC, Mesa
By Paul J. Mooney, Jim L. Wright
Counsel for Plaintiff/Appellant
Maricopa County Attorney’s Office, Phoenix
By Kathleen A. Patterson
Counsel for Defendant/Appellee Maricopa County

Arizona Attorney General’s Office, Phoenix
By Kenneth J. Love, Jerry A. Fries
Counsel for Defendant/Appellee Arizona Department of Revenue



                                OPINION

Presiding Judge Patricia A. Orozco delivered the opinion of the Court, in
which Judge Randall M. Howe and Judge Maurice Portley joined.


O R O Z C O, Judge:

¶1           Hub Properties Trust (Hub) appeals the grant of summary
judgment in favor of Maricopa County and the Arizona Department of
Revenue (collectively the State). For the following reasons, we affirm.

                FACTS AND PROCEDURAL HISTORY

¶2          This appeal concerns a property tax assessment for real
property in Maricopa County (the Property) for tax year 2011. Hub
purchased the Property from the City of Phoenix (the City) on March 4,
2011. When the City owned the Property, it was exempt from property
taxes pursuant to Article 9, Section 2(1) of the Arizona Constitution and
Arizona Revised Statutes (A.R.S.) section 42-11102.A. (West 2015).1

¶3            After Hub purchased the Property, the County Assessor’s
Office determined the Property was no longer exempt municipal
commercial property. As a result, the Property was included in the
Assessor’s roll as taxable property and was included in the County’s tax roll
for tax year 2011. The Maricopa County Board of Supervisors then fixed,
levied and assessed property taxes for the Property for the County’s
assessment and tax roll for the 2011 tax year.

¶4           Hub subsequently brought suit claiming the taxes assessed on
the Property were illegally collected because the Property “was not subject

1     We cite the current version of applicable statutes when no revisions
material to this decision have since occurred.


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                       HUB v. MARICOPA/ADOR
                         Opinion of the Court

to ad valorem taxation” and appealed the Property’s valuation. The parties
filed cross-motions for summary judgment on the former claim and the tax
court granted the State’s motion, finding the Property was no longer tax
exempt after the City sold it to Hub. The parties subsequently settled Hub’s
valuation claim and the tax court entered a stipulated judgment on that
issue. Hub timely appealed the tax court’s grant of summary judgment in
favor of the State. We have jurisdiction pursuant to Article 6, section 9 of
the Arizona Constitution and A.R.S. §§ 12-120.21.A.1 and -2101.A.1 (West
2015).

                               DISCUSSION

¶5             We review the grant of summary judgment and questions of
law, including the interpretation of statutes, de novo. Maycock v. Asilomar
Dev., Inc., 207 Ariz. 495, 498, 500, ¶¶ 14 (App. 2004). In reviewing issues of
statutory construction, we look to the statute’s plain language to determine
its meaning. Koss Corp. v. American Express Co., 233 Ariz. 74, 79, ¶ 12, 309
P.3d 898, 903 (App. 2013).

I.     Property Tax Exemption

¶6             All property in Arizona is subject to taxation unless expressly
exempt. See A.R.S. § 42-11002. Such an exemption applies to federal, state,
county, and municipal property. Ariz. Cons. art. 9 § 2.1; A.R.S. § 42-
11102.A. There is a general presumption against tax exemptions and laws
creating property tax exemptions are to be strictly construed. See Verde
Valley Sch. v. Yavapai Cnty., 90 Ariz. 180, 182, 367 P.2d 223, 225 (1961).

¶7            A tax exemption must be specifically granted by statute. New
Cornelia Coop. Mercantile Co. v. Ariz. State Tax Comm’n, 23 Ariz. App. 324,
327 (App. 1975). Moreover, “[t]he taxpayers have the burden of
establishing the right to an exemption from taxation.” McElhaney Cattle Co.
v. Smith, 132 Ariz. 286, 291 (1982).

¶8             On appeal, Hub argues that because the City owned the
Property “during the entire assessment period for the tax year 2011, on the
tax lien date, and for more than two full months of the tax year at issue
herein,” the Property was exempt during tax year 2011. Thus, Hub
contends the Property was illegally taxed that year. Hub’s argument
presumes that once property is exempt, it is exempt for the entire tax year
even if there is a change of use or ownership. Hub argues:

       [A]lthough the [ ] Property was arguably non-exempt for ten
       months out of tax year 2011-despite being tax exempt during


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                         HUB v. MARICOPA/ADOR
                           Opinion of the Court

       the entire assessment period for tax year 2011, and on the
       statutory lien date-the Legislature has not provided for the
       prorated taxation of real property that transitions from
       government ownership to private ownership during the tax
       year. Simply put, there is no provision in the law for the
       prorated taxation of such property. Absent such a provision,
       there is no legal authority for the [State’s] actions in this case.

¶9             Although the City owned the property during the pertinent
property valuation period, that is not dispositive in determining whether
the Property was tax exempt after Hub bought it in tax year 2011. The
statute provides that the County Assessor shall determine the Property’s
“full cash value” on or before January 1, 2010 for the State’s 2011 tax roll.
See A.R.S. §§ 42-13051.B.2, -11001.19(a) (West 2015). After the sale to Hub,
however, the Property was no longer exempt municipal commercial
property. On or before the third Monday in August 2011, the Maricopa
County Board of Supervisors “fix[ed], lev[ied], and assess[ed]” property
taxes for the Property in accordance with A.R.S. § 42-17151.A.1. (West 2015).
There is no dispute that Hub owned the Property during the 2011
assessment period.

¶10            The tax court correctly noted the logical extension of Hub’s
position that “taxable status is fixed on the valuation date” is that if the State
had purchased the Property from a private party in March 2011, the State
could be required to pay property taxes until the next valuation period.
This would clearly contravene the plain meaning of both Article 9, Section
2 of the Arizona Constitution and A.R.S. § 42-11102.A. “There shall be
exempt from taxation all federal, state, county and municipal property.” Ariz.
Cons. art. 9, § 2 (emphasis added). “Federal, state, county and municipal
property is exempt from taxation[.]” A.R.S. § 42-11102.A (emphasis added).

¶11           Moreover, we find Hub has failed to meet its burden of
showing it was entitled to a property tax exemption for tax year 2011 and
cannot point to a statutory provision that explicitly grants such an
exemption. The tax court concluded, “[t]he period of exemption . . . begins
on the date the property enters government ownership and ends on the date
it leaves government ownership.” We agree. Although the Property was
tax exempt while the City owned it in 2011, the exemption was lifted when
Hub purchased the Property in March. See City of Phoenix v. Elias, 64 Ariz.
95, 97-101 (1946) (holding property was exempt until January 6th while the
State owned it, but could be taxed upon its subsequent transfer to a private
party). Thus, we affirm the tax court’s ruling that the Property was not tax
exempt after the City sold it to Hub in 2011.


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                        HUB v. MARICOPA/ADOR
                          Opinion of the Court

II.    Double Taxation

¶12           Hub contends that it was subject to double taxation because
the City could have been required to pay government property lease excise
taxes (GPLET) while it owned the Property in 2011 pursuant to A.R.S. § 42-
6203.G (West 2015). “Double taxation occurs when the same property or
person is taxed twice for the same purpose or for the same taxing period by
the same taxing authority[.]” Lake Havasu City v. Mohave Cnty., 138 Ariz.
552, 562 (App. 1983) (internal citations and quotations omitted).

¶13           Under A.R.S. § 42-6203.G:

       Prime lessees of government property improvements who
       become taxable or whose taxable status terminates during the
       calendar year in which the taxes are due, including prime
       lessees subject to exemption or abatement under §§ 42-6208
       and 42-6209, shall pay tax for that calendar year on a pro rata
       basis.

Hub admits that no GPLET were imposed during the 2011 tax year.
Instead, Hub’s double taxation argument stems from the possibility that the
State could have assessed GPLET for the 2011 tax year.

¶14            We find three reasons why such a tax would not constitute
double taxation when imposed with property taxes. First, GPLET would
not be imposed on the same party. Hub is not a “prime lessee” because it
did not enter into a lease directly with a government lessor; it purchased
the Property from the City. See A.R.S. § 42-6201.4 (West 2015). Second, the
taxes are not assessed for the same purpose. GPLET are assessed on prime
lessees “for the use or occupancy of each government lessor’s government
property improvement” while ad valorem taxes are assessed on the property
itself based on its full cash value. A.R.S. § 42-6202.A; see supra ¶ 9. Third,
the taxes are levied by different taxing authorities. “Government lessors”
levy GPLET. A.R.S. § 42-6202.A. By contrast, the property taxes Hub paid
were levied by the County Assessor. See A.R.S. § 42-17151.A. Thus, we
affirm the tax court’s ruling that “[t]here is plainly no double taxation here.”

III.   Due Process

¶15           Unlike Hub’s illegal taxation claim, the parties voluntarily
settled Hub’s property valuation claim and the tax court entered a
stipulated judgment. However, Hub argues its due process rights were
violated because:



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                        HUB v. MARICOPA/ADOR
                          Opinion of the Court

       The County’s actions in assessing property taxes against the .
       . . Property for tax year 2011 gave no . . . notice to [Hub] . . .
       and provided it no opportunity to appeal the proposed
       valuation to either the Assessor or to the State Board of
       Equalization prior to having to remit the tax.

Hub mischaracterizes the requirements of due process. “If it is property
that is being taxed, due process requires that the property owner be advised
of the tax, and that it have the opportunity to be heard with respect to its
assessment.” Seafirst Corp. v. Ariz. Dep’t. of Revenue, 172 Ariz. 54, 59 (Tax Ct.
1992).

¶16           Hub undoubtedly had notice of the Property’s valuation and
had a right to appeal the valuation pursuant to A.R.S. § 42-16205.01.A.1
(West 2015), which permits a new property owner to appeal a property’s
valuation to a court if the former owner of the property did not have a
pending appeal or had not received a final judgment or dismissal regarding
the property valuation. Moreover, Hub exercised its due process rights by
filing its complaint in the tax court; Hub’s second claim for relief was a
“Valuation Appeal.”

¶17          Hub exercised its right to be heard in the tax court, and we
find no authority supporting Hub’s argument that due process requires the
Assessor or the State Board of Equalization to hear valuation appeals, and
Hub has not cited to any such authority. Thus, we find no due process
violation and affirm the tax court’s ruling on this issue.

                               CONCLUSION

We affirm the tax court’s grant of the State’s motion for summary judgment.




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