When a Mississippi sixteenth-section land lessee fails to pay ad valorem taxes, the lease expires, and a new lessee takes over the same parcel, who owes the unpaid taxes and can the county simply forgive them?
Plain-English summary
Sixteenth section lands are state-owned lands held in trust for the benefit of public schools. School districts lease them out, and the leasehold is taxable like any other real-estate interest. Jones County had recurring problems: a lessee fails to pay both lease rent and ad valorem taxes, the school district's lease default and termination process kicks in (Section 29-3-57's 60-day rule), the lease expires, no tax sale matures in time, and then a new lessee takes the same parcel under a new lease. Meanwhile, the old taxes are still on the books.
Three questions to the AG, three answers:
- Who owes the old taxes? The original lessee, personally. Ad valorem taxes on a leasehold are a personal debt of the leaseholder. A new lessee is not responsible for the prior lessee's unpaid taxes. (Cites the 1998 Crawford opinion.)
- Can the new lessee pay current taxes on the new lease while the old taxes are still unpaid? Yes. The cited tax-collector restriction in Section 27-41-31 only applies when there has been a tax sale; if no tax sale occurred, that restriction is irrelevant. And the school district has a fiduciary duty to maximize trust revenue, which cuts in favor of letting the new lease proceed.
- Can the county just forgive the old taxes? No. Article 4, Section 100 of the Mississippi Constitution forbids counties from writing off or forgiving debts. The county can do an accounting move (mark the debt "uncollectable" or move it to an inactive ledger so it doesn't show as an asset), but the debt itself remains and could be collected later if circumstances change.
The AG also referred the County to the Office of State Auditor's Technical Assistance Division for the procedural-accounting questions, since AG opinions are limited to prospective questions of state law (Section 7-5-25).
What this means for you
If you are an attorney or business manager for a Mississippi school district
Three operational rules:
- Don't condition new leases on settlement of old leasehold taxes. A new lessee has no legal obligation to pay the prior lessee's delinquent taxes, and refusing to lease until the old debt is settled would actually harm the trust beneficiaries (the inhabitants of the township) by foregoing revenue. The Jones Cnty. Sch. Dist. case and Section 29-3-1 frame the school district's role as trustee charged with maximizing trust revenue.
- Pursue the original lessee for the personal debt. Section 27-41-11 obligates the tax collector to pursue unpaid taxes plus penalties, fees, costs, and interest. The debt does not vanish when the lease expires.
- You cannot forgive or waive the debt. What you can do is run an accounting move to remove uncollectable debt from your active ledger so it stops distorting your audit. Coordinate with the county chancery clerk and the State Auditor's Technical Assistance Division.
If you are a county tax collector
When a sixteenth-section lessee defaults on ad valorem taxes:
- If the leasehold goes to tax sale, the sale satisfies the tax claim. After that, no outstanding tax remains on the leasehold (Smith 1992; Miller 2015).
- If the lease expires before a tax sale matures, the tax debt is the original lessee's personal liability. Pursue collection under Section 27-41-11.
- Do not refuse to accept current taxes from a new lessee on the new lease just because the old lessee's taxes are unpaid. Section 27-41-31's restriction on accepting current taxes applies only when a prior tax sale has not been redeemed, not when there was no tax sale at all.
If you are a current or prospective sixteenth-section lessee
Two things to know:
- Your lease can be terminated for 60 days of delinquency under Section 29-3-57. The school district's default trigger is automatic and firm.
- Unpaid taxes follow you personally, not the parcel. If you walk away from the lease without paying, the county can still come after you for the back taxes plus penalties, fees, costs, and interest. Don't assume the obligation evaporates with the lease.
If you are a journalist or local government auditor
Watch for two patterns:
- Counties marking sixteenth-section delinquencies "uncollectable" without separate collection efforts. The accounting move is permissible; abandoning collection is not the same as the debt being forgiven, and Article 4, Section 100 prohibits actual forgiveness.
- New leases being written without addressing prior delinquencies. That is not a violation; in fact, the AG says the school district's trust duty often requires moving forward with the new lease. But the parallel collection action against the prior lessee should still be happening.
Common questions
Q: Who owes ad valorem taxes on a sixteenth-section leasehold if the lessee defaults?
A: The original lessee, personally. Ad valorem taxes on the leasehold are a personal debt under Section 27-41-11.
Q: Does a new lessee inherit the old lessee's unpaid taxes?
A: No. The Crawford 1998 AG opinion (still in force) said new lease holders are not responsible for taxes the prior lessee did not pay. The 2025 Caves opinion confirms it.
Q: Can the county refuse to accept current taxes from the new lessee until the old taxes are paid?
A: No, unless there was a tax sale that has not been redeemed. Section 27-41-31 only applies in the tax-sale-followed-by-no-redemption situation. If no tax sale occurred, the new lessee's current taxes can and should be accepted.
Q: Can the county forgive or waive the old delinquent taxes?
A: No. Article 4, Section 100 of the Mississippi Constitution prohibits a county from writing off or forgiving debts. The McDonald 1996 AG opinion is the controlling authority.
Q: Can the county "write off" the debt as uncollectable in its books?
A: Yes, in the accounting sense. The McDonald 1996 opinion explains that if "writing off" means moving the uncollectable debt to a special ledger category so it stops showing as an asset, that is permissible. The debt itself is not extinguished and can be collected later if circumstances change.
Q: What happens to a sixteenth-section lease at 60 days of delinquency?
A: It goes into default and is declared terminated under Section 29-3-57. The school district then has the cleared parcel back to lease again.
Q: What if the leasehold is sold at a tax sale?
A: The tax sale collects the taxes; "there are no outstanding taxes" at that point (Smith 1992; Miller 2015). Title to the balance of the lessee's leasehold passes to the tax sale purchaser. Section 29-3-71 is explicit that a tax sale of sixteenth-section land transfers only the lessee's title, not the underlying state ownership.
Background and statutory framework
Sixteenth section lands are a Mississippi institution dating to the federal land grants that funded public schools in the original public-domain states. Section 29-3-1 holds these lands in trust for the public schools, and Article VIII, Section 211 of the Mississippi Constitution preserves the trust. The beneficiaries are the inhabitants of the township in which the land sits (Jones Cnty. Sch. Dist. v. Dep't of Revenue, 111 So. 3d 588 (Miss. 2013)).
The trust framework has two practical consequences. First, school boards and boards of supervisors are held to a trustee standard of care. The G. Smith 2008 AG opinion put it succinctly: "All efforts to maximize the revenue for the beneficiaries of the trust must be made in exercising their trustee duties." Second, the lands are leased rather than sold; lessees hold a leasehold interest that is taxable like other real estate (Section 29-3-71), but tax sales of leased sixteenth-section land transfer only the lessee's interest, not the underlying state ownership.
The collection mechanics are standard ad valorem mechanics. Section 27-41-11 obligates the tax collector to pursue unpaid taxes plus penalties, fees, costs, and interest. Section 27-41-31 has a narrow restriction (no acceptance of current taxes if prior taxes have been the subject of an unredeemed tax sale), but that restriction is keyed to a tax sale, not just to the existence of unpaid taxes.
Article 4, Section 100 of the Mississippi Constitution is a prohibition on counties forgiving public debts. The McDonald 1996 AG opinion and a long line of similar opinions distinguish between forgiveness (prohibited) and accounting moves to mark debts uncollectable (permissible). The economic reality of an uncollectable debt is the same in both cases, but the legal posture differs: a "write-off" in the accounting sense leaves the debt on the books and recoverable; forgiveness extinguishes it.
Citations and references
Statutes:
- Miss. Code Ann. § 29-3-1 (sixteenth section lands held in trust)
- Miss. Code Ann. § 29-3-71 (taxation of leased sixteenth section lands; tax sale transfers only leasehold)
- Miss. Code Ann. § 29-3-57 (60-day delinquency triggers default)
- Miss. Code Ann. § 27-41-11 (tax collector duty)
- Miss. Code Ann. § 27-41-31 (no current-tax acceptance after unredeemed tax sale)
- Miss. Code Ann. § 7-5-25 (AG opinion authority)
Constitutional provisions:
- Mississippi Constitution, Article 4, Section 100 (no county debt forgiveness)
- Mississippi Constitution, Article VIII, Section 211 (sixteenth section lands)
Case:
- Jones County School District v. Department of Revenue, 111 So. 3d 588 (Miss. 2013): Beneficiaries of sixteenth-section trust are inhabitants of the township.
Prior AG opinions cited:
- MS AG Op., G. Smith (July 3, 2008): School board and board of supervisors held to trustee standard.
- MS AG Op., Miller (Aug. 7, 2015): Tax sale of leasehold collects taxes; no outstanding tax thereafter.
- MS AG Op., Smith (Oct. 2, 1992): Same.
- MS AG Op., Crawford (Apr. 10, 1998): New lease holder not responsible for prior lessee's unpaid taxes.
- MS AG Op., McDonald (Nov. 8, 1996): Counties cannot forgive debt; accounting "write-off" is permitted.
Source
- Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
- Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2025/09/R.-Caves-August-28-2025-Ad-Valorem-Taxes-and-Leases-of-Sixteenth-Section-Lands.pdf
Original opinion text
August 28, 2025
Risher Caves, Esq.
Attorney, Jones County Board of Education
Post Office Drawer 167
Laurel, Mississippi 39441-0167
Re: Ad Valorem Taxes and Leases of Sixteenth Section Lands
Dear Mr. Caves:
The Office of the Attorney General has received your request for an official opinion.
Background
Based on a telephone conversation with you, we understand the following: Jones County ("County") has had multiple instances in which a lessee of sixteenth section land fails to pay the lease rental and ad valorem taxes on the leasehold. A tax sale would vest title to the balance of the lessee's leasehold in a tax sale purchaser, but the lease expires before a tax sale matures. The Jones County School District ("School District") later enters a new lease with a subsequent lessee. The ad valorem taxes from the first lease remain delinquent. While we cannot validate or invalidate past action, we understand the issue revolves around whether the prior lessee owes ad valorem taxes on the initial lease and whether the current lessee can pay ad valorem taxes on the current sixteenth section lease if the taxes from the first lease have not been paid.
Questions Presented
- If a lessee of sixteenth section land fails to pay the ad valorem taxes on the leasehold, the original lease expires, and the School District later enters a new lease with a subsequent lessee, who is responsible for the ad valorem taxes owed from the first lease?
- Can the subsequent lessee pay taxes on his or her current lease if the delinquent ad valorem taxes on the first lease are still owed?
- Can the delinquent ad valorem taxes from the first lease be forgiven or waived?
Brief Response
- Delinquent ad valorem taxes owed on a sixteenth section leasehold are a personal debt of the original lessee. A subsequent lessee is not responsible for taxes not paid by a prior lessee.
- There is no prohibition against leasing sixteenth section land or accepting payment of current ad valorem taxes for such lease simply because a prior lessee still owes delinquent ad valorem taxes. In fact, the School District in exercising their trustee duties must make all efforts to maximize the revenue of the sixteenth section land for the beneficiaries of the trust.
- Delinquent ad valorem taxes cannot be waived or forgiven. However, the debt could be recorded as uncollectable in the County books.
Applicable Law and Discussion
Sixteenth section land is state-owned land "held in trust for the benefit of the public schools. . . ." Miss. Code Ann. § 29-3-1. "The beneficiaries . . . [of the sixteenth section school trust land] are the inhabitants of the respective townships." Jones Cnty. Sch. Dist. v. Dep't of Revenue, 111 So. 3d 588, 595 (Miss. 2013) (internal citation and quotations omitted); see also MISS. CONST. art. VIII, § 211. "Like the board of education, the board of supervisors is also held to the standard of care of a trustee in their decisions regarding the 16th Section Public Trust Lands under . . . Section 29-3-1. All efforts to maximize the revenue for the beneficiaries of the trust must be made in exercising their trustee duties." MS AG Op., G. Smith at *2 (July 3, 2008).
Pursuant to Section 29-3-71:
Sixteenth section lands reserved for the use of schools, or lands reserved or granted in lieu of or as a substitute for the sixteenth sections, shall be liable, after the same shall have been leased, to be taxed as other lands are taxed during the continuance of the lease, but in case of sale thereof for taxes, only the title of the lessee or his heirs or assigns shall pass by the sale.
If a sixteenth section leasehold is sold in a tax sale, "then via that sale, the county collected its taxes and there are no outstanding taxes." MS AG Op., Miller at 2 (Aug. 7, 2015) (quoting MS AG Op., Smith at 1 (Oct. 2, 1992)). However, if the leasehold is not sold in a tax sale, the tax collector has the duty to collect the unpaid taxes in accordance with Section 27-41-11. MS AG Op., Crawford at 1 (Apr. 10, 1998) (internal citations omitted). This section provides that the person who fails or neglects to pay the taxes assessed against him by the due date is required to pay the taxes plus fees, penalties, costs, and interest. Miss. Code Ann. § 27-41-11. Accordingly, the debt owed for the delinquent ad valorem taxes on sixteenth section land is a personal debt of the original lessee and not a subsequent lessee. See Crawford at 2 (opining that "a new lease holder is not responsible for taxes not paid by a prior lessee") (internal citations omitted). Further, pursuant to Section 29-3-57, sixteenth section leases are in default upon 60-day delinquency and declared terminated.
With respect to whether the uncollected taxes owed by the first leaseholder can be forgiven or waived, Article 4, Section 100 of the Mississippi Constitution prohibits a county from writing off or forgiving debts. MS AG Op., McDonald at *1 (Nov. 8, 1996). However, we have further opined that:
[I]f by "writing-off" uncollectible debts you mean the utilization of accounting procedures to move uncollectible debts to a special category on the county [entity's] books entitled "uncollectible" or "inactive" accounts, so that these debts do not show up in the yearly audit as "assets", then the county entity may "write-off" such uncollectible debts in that sense. Any such debts could still be collected if circumstances changed at a later date since those debts would not actually have been forgiven.
Id. (citation omitted). Accordingly, delinquent ad valorem taxes cannot be waived or forgiven. However, the debt could be recorded as uncollectable. We refer you to the Technical Assistance Division in the Office of the State Auditor for questions regarding how the Tax Assessor/Collector should reflect certain transactions in his or her records.
In your request you cite Section 27-41-31 for the proposition that a subsequent sixteenth section leaseholder cannot pay his or her ad valorem taxes on the sixteenth section lease until the prior lessee's delinquent taxes are paid. The relevant provision provides:
The tax collector shall not accept payment of current year taxes for real property which has sold for delinquent taxes until the taxpayer provides the tax collector with proof that the tax sales for such real property for the previous two (2) years have been redeemed in the chancery clerk's office.
Miss. Code Ann. § 27-41-31 (emphasis added). However, where there was no tax sale, the above Section 27-41-31 does not apply. There is no prohibition against leasing sixteenth section land or accepting payment of current ad valorem taxes for such lease simply because a prior lessee still owes delinquent ad valorem taxes. In fact, the School District in exercising their trustee duties must make all efforts to maximize the revenue of the sixteenth section land for the beneficiaries of the trust.
If this office may be of any further assistance to you, please do not hesitate to contact us.
Sincerely,
LYNN FITCH, ATTORNEY GENERAL
By: /s/ Beebe Garrard
Beebe Garrard
Special Assistant Attorney General