Payments in Lieu of Taxes

Private property on certain Federal installations is not subject to state and local taxes even though the use to which such property is put does not differ from that of similar property located outside the Federal areas.

Congress has permitted states and their subdivisions to impose sales, use, gross receipts, and gross and net income taxes upon persons within Federal areas, but continue to prohibit imposition of property taxes.

The value of private property on Federal areas has increased dramatically in recent years with the advent of policy of leasing equipment of all types.

The Advisory Commission on Intergovernmental Relations has recommended that the Federal Government authorize the imposition of such taxes by state and local jurisdictions.

The GFOA believes that the Federal Government should permit states or other duly constituted taxing authorities to subject private owners to liability for payment of property taxes on property located in Federal areas within such state under specified conditions.

Canadians members abstained from voting.

• Publication date: May 1966