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January 01, 2011 Written by 

Businesses on Gov't Property

Private businesses on public properties, under certain circumstances, are assessed and subject to property taxation. For assessment purposes, these businesses are referred to as Possessory Interests and occurs when there is possession or the right to possession of real estate and fee title is held by a tax exempt public agency.

The definition of a taxable possessory interest under California Law is as follows:

The term "possessory interest" as it is used for property taxation purposes in California includes either the possession or the right to possession of real estate whose fee title is held by a tax exempt public agency.

Examples of possessory interests include, the right to graze livestock on public lands, the possession of public property at an airport such as an airplane hanger or a car rental company counter and service facilities, a booth at a convention center or a concession stand at a fairgrounds.

Regardless of the type of document evidencing the right to possession, a taxable possessory interest exists whenever a private person or persons have the exclusive right to a beneficial use of tax exempt publicly owned real property. The fact that only verbal agreements have been made and that no written document exists does not mean that a taxable possessory interest does not exist.

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Real Property Division

County Government Center
East Wing, 5th 
Floor
70 West Hedding Street
San Jose, CA 95110
Phone: 408-299-5300
Fax: 408-299-3015
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