Does Arkansas's 100% disabled veteran property tax exemption cover fees and assessments charged by a suburban improvement district?

Plain-English summary

Representative Bob Ballinger asked whether a fully disabled veteran was exempt from fees or assessments a suburban improvement district levied against his real property. The Attorney General answered "no." Ark. Code Ann. § 26-3-306 exempts a disabled veteran from "state taxes" on the homestead and personal property. The AG said that provision does not contemplate an exemption from local improvement district fees or assessments.

The AG quoted Bensberg v. Parker for the distinction. An exemption from ordinary taxes for the general purposes of government does not release property from "special assessments for local improvements" charged on the theory that the property receives a special benefit. Applying that rule, she concluded Arkansas law did not exempt the veteran from this suburban improvement district's charges.

The opinion answers a question about a suburban improvement district. Its quotation describes the general distinction between ordinary taxes and special assessments, but the AG did not decide how another type of district's particular charge would be classified. She also did not analyze an assessment to fund police or fire services.

Currency note

Issued May 10, 2019. The opinion applies the veteran exemption and the special-assessment rule to the suburban improvement district charges described. Check current law and the particular charge before relying on it.

What the opinion establishes

The cited exemption's language refers to state taxes on a disabled veteran's homestead and personal property. The AG explained that this is different from a local improvement district assessment. Her cited Arkansas Supreme Court passage says ordinary taxation supports general governmental purposes, while the special assessment is charged upon property on the theory of a specific local benefit.

The AG applied that distinction to the constituent's situation without offering a breakdown of the district's projects or assessment method. The opinion gives no facts about how a district calculated an individual parcel's charge. It concludes that a fully disabled veteran remains liable for the fees or assessments this suburban improvement district levies against his real property.

Common questions

Does a 100% disability rating remove this suburban improvement district charge?

No. The AG expressly answered that a fully disabled veteran was not exempt from the district's fees or assessments against his real property under the cited Arkansas tax exemption.

Does the opinion decide the treatment of sewer or drainage district assessments?

No. It quotes a general rule about special assessments for local improvements, then applies that rule to a suburban improvement district. It does not examine charges levied by a sewer, drainage, or municipal improvement district.

What if an assessment funds police or fire services?

The opinion does not discuss those services or decide how a charge funding them should be classified. Its conclusion concerns the suburban improvement district fees and assessments in the question presented.

Can the district waive a charge for hardship?

The AG did not address the district's authority to waive an assessment. She answered whether the disabled-veteran tax exemption itself removed the obligation.

Citations

Ark. Code Ann. § 26-3-306(a)(1)(A)(i); Bensberg v. Parker, 192 Ark. 908, 910 (1936).

Source

• Official opinion search: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

STAT E O F ARKAN SAS
ATTORN EY G ENERAL
LE SLIE RUTLED G E

Opinion No. 2018-137

May 10, 2019

The Honorable Bob Ballinger
State Representative
508 Dr. Spurlin Circle
Berryville, AR 72616-3825

Dear Representative Ballinger:

This is in response to your request for an opinion on behalf of a constituent. In this regard, you have asked the following question:

Is a veteran that is declared fully disabled (100%) exempt under Arkansas law from any fees or assessments levied against his real property by a suburban improvement district?

RESPONSE

It is my opinion that a fully disabled veteran is not exempt from paying fees or assessments that a suburban improvement district levies against his real property. Therefore, the answer to your question is "no. "

Section 26-3-306 of the Arkansas Code provides, in pertinent part, that "[a] disabled veteran ... shall be exempt from payment of all state taxes on the 1 homestead and personal property owned by the disabled veteran." This provision exempts a fully disabled veteran from paying "state taxes" on his homestead property. It does not, however, contemplate an exemption from fees or assessments levied by a local improvement district. The Arkansas Supreme Court has explained that such statutory tax exemptions do not reach assessments for local improvements:

1
Ark. Code Ann . § 26-3-306(a)( I )(A)(i) (Supp. 2017) .

323 CENTER STR EET. SU ITE 200 · LI TTLE 11.0CK. A RKANSAS 7220 1 TELE l'H ONE (50 1) 682-2007 · FAX (501) 682-8084 ARKANSASAG.GOV

The Honorable Bob Ballinger
State Representative
Opinion No. 2018-13 7
Page 2

It is the well-established rule that a constitutional or statutory exemption from taxation is to be taken as an exemption from ordinary taxes, for the general purposes of government- state, county, or municipal- and does not relieve those in whose favor such exemption exists from the obligation to pay special assessments for local improvements which are charged upon pro~erty on the theory that such property is specially benefitted thereby.

It follows, in my opinion, that Arkansas law does not exempt a fully disabled veteran from paying fees or assessments that a suburban improvement district levies against his real property.

Sincerely,

~~
LESLIE RUTLED~E~
Attorney General

2
Bensberg v. Parker, 192 Ark. 908, 910 (1936) (quoting 25 Ruling Case Law§ 40 at 124); accord 1 Horace Sloan, The Law of Improvement Districts in Arkansas § 5 at 6 ( 1928).