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 goverment 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