When State Universities and Businesses Gang Up on the Taxpayers

National Review
Thursday, November 8, 2018
George Leef

https://www.nationalreview.com/corner/when-state-universities-and-busine...

In yesterday’s Martin Center article, Sean McCarthy of the Arizona Tax Research Association explains how this has been done in his state, with Arizona State University providing the tax-exempt basis for business development.

In yesterday’s Martin Center article, Sean McCarthy of the Arizona Tax Research Association explains how this has been done in his state, with Arizona State University providing the tax-exempt basis for business development.

McCarthy writes: “In Arizona, the university system has a cavalier attitude regarding the use of its tax-exempt status. In one glaring example, the state’s largest commercial office development, built in 2016 and anchored by State Farm Insurance, pays no property taxes and will not for 99 years, thanks to a tax avoidance scheme developed by Arizona State University (ASU). The 2.2 million-square-foot glass complex in Tempe is technically owned by the Arizona Board of Regents (ABOR) and resides on their land; however, the effective owner is Transwestern Investment Group, which leases it to State Farm.”

Arrangements of this kind are both unfair and possibly illegal. McCarthy explains, “The deals also give their recipients an unfair edge over competitors. The State Farm office complex will certainly provide more revenue to ASU than the school would have received had the land remained a parking lot for students. But what of State Farm’s competitors down the street who pay full property taxes, supporting the local public schools to their economic disadvantage? Beyond fairness, the state Constitution requires that taxes be general and uniform among similar classes to prevent favoritism.”

More: https://www.nationalreview.com/corner/when-state-universities-and-busine...