Can Cumberland County put a car tax on vehicles owned by people who aren't in the military but live on Fort Bragg?

Plain-English summary

Cumberland County's attorney asked whether the county could tax vehicles owned by non-servicemembers and located on Fort Bragg. The AG could not give a definitive answer because it lacked specific information about when and how the federal government acquired the property. It inferred from the State's and federal government's historical treatment of Fort Bragg that the United States had acquired exclusive jurisdiction, except for service of process. On that premise, it said Cumberland County appeared unable to tax personal property whose tax situs was on the base.

The opinion distinguished a 1987 AG conclusion that certain property of a nonresident non-servicemember spouse had a North Carolina tax situs and was taxable. That earlier view had not examined property located on Fort Bragg. The 1993 opinion turned instead on whether the land was within exclusive federal jurisdiction under the Constitution's Jurisdiction Clause.

The opinion describes different rules for land acquired before 1907, from 1907 to February 1940, and after that date. North Carolina's 1907 consent statute ceded jurisdiction over qualifying federal acquisitions, but did not itself transfer title. For land acquired after February 1, 1940, express federal acceptance of exclusive jurisdiction was required. Without the missing acquisition facts, the AG could only state a practical inference, not a settled tax result.

Currency note

This opinion addresses the law and facts available in 1993. A present tax question requires the specific tract's acquisition and jurisdiction records and current law.

Background and statutory framework

The Jurisdiction Clause allows the federal government to exercise exclusive authority over land purchased with a state's consent for forts and other specified federal purposes. The opinion says a state ordinarily cannot tax activities within such an enclave unless it retained taxing power. It distinguishes other means of federal acquisition, for which state jurisdiction may remain. The federal Buck Act allowed state sales, use, and income taxes in otherwise exclusive federal areas; the opinion did not identify ad valorem personal property tax among those categories.

Under N.C.G.S. § 104-7, the State consented to federal acquisition and ceded exclusive jurisdiction except for service of civil and criminal process over land acquired under that provision. The United States still had to accept jurisdiction. The opinion says express acceptance was unnecessary for pre-February 1940 acquisitions but required for later acquisitions under 40 U.S.C. § 255. The AG had not obtained the title-transfer dates needed to apply these rules conclusively to Fort Bragg.

Common questions

Did the AG conclusively say Cumberland County could not tax the vehicles?

No. The opinion says the answer depends on acquisition history it could not confirm. Based on an inference about the governments' historical treatment of the base, it said the tax appeared barred for property with tax situs there.

Why did the acquisition date matter?

It affected the rules for ceding and accepting exclusive federal jurisdiction. The opinion separately analyzes land acquired before North Carolina's 1907 consent law, during the period from 1907 to February 1940, and after the federal acceptance presumption took effect.

What did the opinion say about the Buck Act?

It said Congress had subjected sales, use, and income taxation within otherwise exclusive federal areas to state law. The opinion did not list ad valorem personal property taxation as covered by that waiver.

Citations

• U.S. Const. art. I, § 8, cl. 17 (Jurisdiction Clause; exclusive federal jurisdiction over places purchased with state consent for forts and other federal buildings)
• N.C.G.S. § 104-7 (1907 NC consent statute; cedes jurisdiction except for service of process)
• 40 U.S.C. § 255 (presumption that federal jurisdiction was not accepted absent express acceptance)
• 4 U.S.C. §§ 105-110 (Buck Act of 1940; state may tax sales, use, and income on federal enclaves)
• Surplus Trading Co. v. Cook, 281 U.S. 647, 650 (1930) (U.S. Supreme Court; federal enclave doctrine and territorial jurisdiction)
• State v. Burrell, 256 N.C. 288, 297, 123 S.E.2d 795, 801, cert. denied, 370 U.S. 961 (1962) (NC Supreme Court; state retains territorial jurisdiction until federal acceptance)
• Markham v. United States, 215 F.2d 56 (4th Cir. 1954), cert. denied, 348 U.S. 939 (1954) (Fourth Circuit; 40 U.S.C. § 255 not retroactive to pre-1940 acquisitions)

Source

• Landing page: https://ncdoj.gov/opinions/ad-valorem-tax-on-personal-property-of-non-service-members-located-on-fort-bragg/

Original opinion text

24 May 1993

G.B. Johnson
County Attorney
Cumberland County
Post Office Drawer 1829
Fayetteville, North Carolina 28302

Re: Advisory Opinion — Ad Valorem Tax on Personal Property of Non-service members Located on Fort Bragg.

Dear Mr. Johnson:

You have requested our opinion as to whether Cumberland County may impose ad valorem taxes upon vehicles owned by non-servicemembers and located on Fort Bragg. A 1987 Attorney General Opinion analyzed whether the ownership interest of a nonresident non-servicemember spouse in personal property is subject to ad valorem taxes. The opinion concluded that such personal property was not exempted by virtue of the Soldier and Sailors Civil Relief Act. As such, it acquired a tax situs in North Carolina and was subject to the ad valorem tax. The opinion did not address whether the above conclusion would be applicable if the personal property were located on Fort Bragg.

As the following discussion illustrates, the extent of Cumberland County's jurisdiction to tax the personal property situated on Fort Bragg depends upon the time and manner of acquisition of Fort Bragg by the federal government. Unfortunately, we have been unable to obtain specific information regarding the date of actual transfer of title and therefore cannot provide you with a definitive answer to your question. As a practical matter, however, we infer from how the State and the federal government have historically treated Fort Bragg that the federal government has in fact acquired exclusive jurisdiction over Fort Bragg, with the exception of service of process. It therefore appears that Cumberland County may not impose a tax upon personal property which has acquired a tax situs on Fort Bragg.

The Jurisdiction Clause of the United States Constitution grants authority to the federal government to accept and govern territories within the boundaries of a sovereign state. This Clause provides: "Congress shall have the power to exercise exclusive jurisdiction in all cases whatsoever … over all places purchased by the Consent of the Legislature of the States in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, Dock-Yards and other needful buildings." U.S. Const. art. I, § 8, cl. 17. Lands acquired in such manner are commonly referred to as "federal enclaves." See generally J. HELLERSTEIN & W. HELLERSTEIN, STATE TAXATION, Vol. II, ¶ 22.05 (2d ed. 1993).

A state may not impose taxes on activities occurring within a federal enclave, absent retention of this power by the state. This implied constitutional grant of immunity from state taxation does not apply to territory acquired by means other than the Jurisdiction Clause. If the land were reserved from the original public domain, purchased without the consent of the state or acquired by eminent domain, it remains part of the state's "territory and within the operation of her laws, save that the latter cannot affect the title of the United States or embarrass it in using the lands or interfere with its right of disposal." Surplus Trading Co. v. Cook, 281 U.S. 647, 650 (1930). If the land were purchased without the consent of the state, the state retains the power to tax.

If the land were purchased with the consent of the state, the federal government enjoys immunity from state taxation to the extent the state failed to reserve such power. Congress has the authority, however, to modify, limit or waive immunity from state taxation through specific legislation. For example, by The Buck Act of 1940, 4 U.S.C. §§ 105-110, Congress specifically subjected activities and persons within areas of otherwise exclusive federal jurisdiction to state sales, use and income taxes.

Acquisition of Fort Bragg Prior to 24 January 1907

Assuming the United States acquired Fort Bragg prior to 24 January 1907, determining whether North Carolina has ceded exclusive jurisdiction to the United States would depend upon the manner of acquisition of Fort Bragg. Although a staff member from Fort Bragg maintains that Fort Bragg was acquired by the United States from North Carolina simply by virtue of the enactment of N.C.G.S. § 104-7, we cannot agree with this contention. As explained more fully below, this statute merely cedes jurisdiction to the federal government – it does not operate to transfer title.

Acquisition of Fort Bragg Between 24 January 1907 and 1 February 1940

In 1907 the North Carolina General Assembly enacted N.C.G.S. § 104-7. By this provision, North Carolina, in compliance with the Jurisdiction Clause of the United States Constitution, consented to the acquisition of land within the State by the United States and ceded exclusive jurisdiction, except for the service of civil and criminal processes, over land so acquired by the federal government.

Although N.C.G.S. § 104-7 cedes exclusive jurisdiction to the United States over the land acquired, the State of North Carolina lacks authority to compel the United States to accept jurisdiction over an area. State v. Burrell, 256 N.C. 288, 123 S.E.2d 795, cert. denied, 370 U.S. 961 (1962). "Unless and until the United States has accepted jurisdiction over lands hereafter to be acquired as aforesaid, it should be conclusively presumed that no such jurisdiction has been accepted." 40 U.S.C. § 255. When the United States government has not accepted jurisdiction over the area ceded by N.C.G.S. § 104-7, "the State retain[s] its territorial jurisdiction over the area in question so far as its exercise involves no interference with the carrying out of the federal project." State v. Burrell, 256 N.C. at 297, 123 S.E.2d at 801. If the land were acquired prior to 1 February 1940, explicit acceptance of exclusive jurisdiction by the United States is not necessary as 40 U.S.C. § 255 has no retroactive effect. See Markham v. United States, 215 F.2d 56 (4th Cir. 1954), cert. denied, 348 U.S. 939 (1954).

If Fort Bragg were acquired by the United States after 24 January 1907 and prior to 1 February 1940, the effective date of the statutory presumption appearing in 40 U.S.C. § 255, then North Carolina has ceded all jurisdiction to the federal government, except for jurisdiction for the service of process. Thus the State of North Carolina and Cumberland County would have no jurisdiction to tax personal property which has acquired a tax situs on Fort Bragg.

Acquisition of Fort Bragg After 1 February 1940

If Fort Bragg were acquired by the United States after 1 February 1940, then North Carolina would be deemed to have ceded jurisdiction to tax to the federal government, provided that the federal government had expressly accepted exclusive jurisdiction. In other words, for the federal government to acquire land after the effective date of the statutory presumption, it must take specific steps as prescribed by 40 U.S.C. § 255.

We hope this proves helpful. If this office can be of further assistance, please feel free to call us at (919) 716-6400 or 733-3252.

Reginald L. Watkins
Senior Deputy Attorney General

Kay Linn Miller
Associate Attorney General