Davis officials decide Hill AFB housing is tax-exempt

FARMINGTON — Three months after denying an exemption for property taxes for the military housing at Hill Air Force Base, Davis County commissioners reversed that decision Tuesday.

The 2-1 vote followed a presentation by Boyer Hill Military Housing, which operates, builds and maintains the 1,018 houses at Hill Air Force Base, and counter-arguments by deputy Davis County attorney Craig Bott.

Boyer Hill's attorney, Robert Lochhead, argued that even though Boyer Hill holds title to all of the homes at Hill, the U.S. Air Force, a tax-exempt entity, owns the land they sit on and controls access to the base, determines rent allocations and has final say over designs of the homes.

"Boyer Hill has just enough ownership to go out and get a loan against it," Lochhead said.

Bott argued that Boyer Hill is a for-profit company that owns the homes, maintains them, has full use of them and bears the risk for them.

Boyer Hill made an appeal to the Utah State Tax Commission following the commissioners' denial of exemption in June, Bott said.

"By making that appeal to the tax commission, Boyer Hill is asserting they are the owner of the property," Bott said.

Retired Air Force Maj. Gen. Pat Condon, a resident of Weber County, said he was part of the Base Realignment and Closure executive group at the Pentagon during a previous round of BRAC.

"Quite often intangible factors and impressions mean a lot" when the Air Force is trying to determine which bases to realign or close, Condon said. Taxing base housing can send the wrong message, he said.

In the end, Commissioners Louenda Downs and John Petroff Jr. agreed that the lease agreement between the Air Force and Boyer Hill is a unique kind of relationship and that the housing shouldn't be taxed.

What that means is that from 2008, the year Boyer Hill was appealing its tax status, taxing entities in Davis County will have their tax rates adjusted to make up $250,000 to $275,000 a year in lost tax revenue — about .16 percent of the combined $160 million to $170 million collected in the past year.

According to state law, taxing entities are allowed to receive the same tax revenue every year, plus taxes from new properties.

e-mail: jdougherty@desnews.com

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