In a much anticipated decision, the Pennsylvania Supreme Court in Tech One Associates v. Board of Property Assessment, Appeals and Review of Allegheny County, 32 WAP 2010 (April 25, 2012), held there is statutory authority to tax leasehold interests as part of the totality of the assessment. Thus an assessment can properly include the value of land, buildings, and other improvements, regardless of whether the buildings and land were put there by the landlord or the tenant. This will alter what had been confusing present practice, and will require parties to leases to carefully consider tax responsibility.
The issue before the court was the validity of a single unified assessment of both a tract of land and the buildings of a shopping center, movie theater and restaurant located on land owned by Tech One Associates. The buildings and improvements were constructed by a second entity and owned by that entity under a long term lease. The Board of Property Assessment of Allegheny County treated the land, buildings and the improvements all as real estate subject to taxation.
Please see full publication below for more information.