Appeal of claims seeking reimbursement for property taxes is granted in part and denied in part. The contractor leased property to the government, and the lease obligated the government to pay real estate taxes. The contractor sought reimbursement for four different county taxes. The CBCA found that two of those taxes qualified as real estate taxes that were contemplated by the parties when they executed the lease, and that the government was liable for those taxes. The two other taxes, however, were imposed after execution of the lease. Those taxes were not contemplated by the parties and therefore not real estate taxes that the government was obligated to pay.
NOAA Maryland, LLC leased property to the GSA in Prince George’s County Maryland. The lease obligated GSA to pay real estate taxes assessed against the building or the land for the purpose of funding general government services. However, special assessments and “future taxes” were excluded from the lease’s definition of real estate taxes.
After GSA had been leasing the property for over a decade, NOAA Maryland submitted claims to GSA seeking reimbursement for four different local taxes: a stormwater tax, a transportation tax, a clean water tax, and an education tax. NOAA Maryland sought over $350,000. GSA refused to pay the claims. NOAA Maryland appealed to the CBCA, which held a hearing on the claims.
The board noted that to determine whether an assessment is a real estate, tribunals must consider whether the tax is (1) an ad valorem tax assessed in the same manner as other real estate taxes; (2) not for a single fixed amount; (3) assessed every year for an indefinite duration; (4) used to benefit the general public, not specific property owners; and (5) used to augment the level of traditional government services.
The board found that two of the taxes claimed by NOAA Maryland—the stormwater and transportation taxes—fit the definition of real estate taxes. They were levied and collected like other county property taxes, included in the county’s consolidated real property tax bill, imposed ad valorem for an indefinite duration, and were within the scope of general government services provided by the county. Importantly, the taxes predated the execution of the lease, so they did not fall into the category of "future taxes" that were excluded from the lease.
But the same could not be said of the clean water and education taxes that NOAA Maryland also claimed. Those taxes were imposed by the county years after GSA executed the lease and thus were "future taxes" under the lease. The board noted that the plain language of the lease indicated that a “future tax” was a tax not contemplated by the parties at the time they entered the lease.
NOAA Maryland argued that the because the education tax is funded by an increase in the county real estate taxes, it should be considered a real estate tax under the lease. But the board found that NOAA Maryland had not presented any evidence that the parties contemplated this education tax when they entered the lease.
NOAA Maryland also presented testimony from its corporate representative stating that the company had always understood that GSA would reimburse these types of taxes. The board, however, found that this testimony was not supported by the written record—no affidavit, declaration, email, or contract modification confirmed this interpretation.
NOAA Maryland is represented by Diana Parks Curran and Hadeel N. Masseoud of Curran Legal Services Group, Inc. The government is represented by James F. H. Scott of the General Services Administration.