CNL Hotels & Resorts, Inc. v. Maricopa County

OPINION

BRUTINEL, Justice.

¶ 1 Improvements on land leased from the state qualify for a reduced ad valorem tax rate if they “become the property of the ... state ... on termination of the leasehold interest in the property.” A.R.S. § 42-12009(A)(1)(a) (2009). We hold that this provision applies when, at the time of taxation, improvements exist on the land that, under the terms of the lease, would become the state’s property upon lease termination.

I

¶ 2 In 1993, the predecessor-in-interest to CNL Hotels and Resorts Inc. (“CNL”) entered into two ninety-nine year leases of state trust land to build…