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STATE OF MINNESOTA

IN SUPREME COURT

A19-0889

Tax Court Lillehaug, J.
Concurring in part, dissenting in part, Chutich,
Enterprise Leasing Co. of Minnesota, Anderson, Thissen, JJ.

Relator,

vs. Filed: January 15, 2020
Office of Appellate Courts
County of Hennepin,

Respondent.

________________________

Gary A. Van Cleve, Timothy A. Rye, Larkin Hoffman Daly & Lindgren Ltd., Minneapolis,
Minnesota, for relator.
Michael O. Freeman, Hennepin County Attorney, Sara L . Bruggeman, Assistant County
Attorney, Minneapolis, Minnesota, for respondent.
_____________________________
S Y L L A B U S
1. Concession fees paid for the use of airport property are subject to the
mandatory-disclosure requirements of Minn. Stat. § 278.05, subd. 6 (2018).
2. Minnesota Statutes § 278.05, subd. 6(a), requires that the mandatory
disclosures be made by the petitioner, not by a third party.
Affirmed.

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O P I N I O N
LILLEHAUG, Justice.

In this appeal from the Minnesota Tax Court, the taxpayer, Enterprise Leasing Co.
of Minnesota (Enterprise), challenges the tax court’s dismissal of its property tax petition
for failure to disclose certain concession fee information as required by Minn. Stat.
§ 278.05, subd. 6 (2018). We conclude that the tax court did not err in dismissing the
petition, and thus affirm.
The facts of this case are largely undisputed and, for the most part, the same as set
forth in Avis Budget Car Rental LLC v. County of Hennepin, No. A19-0886, ___ N.W.2d
___ (Minn. Jan. 15, 2020). Thus, we provide here only a summary of the facts regarding
Enterprise’s tax liability for the space it leases at the Minneapolis-Saint Paul International
Airport, which is owned and operated by the Metropolitan Airports Commission (MAC).
Like Avis, Enterprise has entered into a General Terms and Conditions Lease
Agreement and Supplemental Lease Agreements with MAC. Enterprise is also subject to
a Temporary Lot F Parking Space Lease Agreement, which provides for the payment of
“ground rent” for temporary parking space in Lot F at the airport. Enterprise pays MAC
either “concession fees” or a “minimum annual guarantee,” whichever is greater.
MAC itself is exempt from property taxation under Minn. Stat. § 360.035 (2018).
But lessees of property at the airport, like Enterprise, are assessed property tax “in the same
amount and to the same extent as though the lessee or user was the owner of such property.”
Minn. Stat. § 272.01, subd. 2(a) (2018); see also Nw. Airlines, Inc. v. Cty. of Hennepin,
632 N.W.2d 216, 220 –21 (Minn. 2001) (concluding that tax provisions “shift the real
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property tax liability to relator as a personal property tax in an amount MAC would have
had to pay had MAC not been an exempt property owner”). Hennepin County therefore
assessed the value of Enterprise’s property at the airport as of January 2, 2016, for taxes
payable in 2017, which Enterprise then challenged in the Minnesota Tax Court.
During the proceeding in the tax court, the County provided Enterprise with a
compliance checklist for the disclosures required by Minn. Stat. § 278.05, subd. 6.
Enterprise represented in its disclosure that it had a lease agreement by which it was paying
base rent on 933,508.25 square feet. It represented that its “current monthly rent” was
$635,875. This number included $537,149 for “MAG 2014 Contract.” Although
Enterprise disclosed base rent calculations that were based, in part, on the minimum annual
guarantee, it did not disclose that, pursuant to the Lease Agreement, the fee it was obliged
to pay was the higher of the concession fee —a percentage of gross revenue—and the
minimum annual guarantee. Nor did it disclose whether the actual payments to MAC were
based on the fee or the guarantee.
Hennepin County had, independently, received information from MAC regarding
Enterprise’s sales revenue, percentage rent, minimum annual guarantee, and overall rent
paid for 2014 and 2015. The County nonetheless moved to dismiss Enterprise’s petition
for failure to comply with the mandatory -disclosure requirements of section 278.05,
subdivision 6(a). The tax court granted this motion. Enterprise appealed, raising the same
two issues presented by, and decided in, Avis.

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For the reasons explained in Avis, the tax court did not err in dismissing Enterprise’s
petition because the concession fees were rent, or at least income, and thus subject to the
mandatory-disclosure requirements of Minn. Stat. § 278.05, subd. 6. Further, the
disclosures required by this statute must be made by the petitioner, not a third party.
Regardless of the information the County had from MAC, Enterprise did not disclose the
information; thus, Enterprise did not comply with the requirements of the statute and its
petition was properly dismissed. See Minn. Stat. § 278.05, subd. 6(b) (stating that the
“[f]ailure to provide the information required” by the statute “shall result in the dismissal
of the petition”).
We therefore affirm the decision of the tax court.
Affirmed.

C/D-1
C O N C U R R E N C E & D I S S E N T
CHUTICH, Justice (concurring in part, dissenting in part).
For the reasons stated in my concurrence and dissent in Avis Budget Car Rental LLC
v. County of Hennepin , No. A19 -0886, ___ N.W.2d ___ (Minn. Jan. 15, 2020), I also
concur in part and dissent in part from the court’s decision in this case.

ANDERSON, Justice (concurring in part, dissenting in part).
I join in the concurrence and dissent of Justice Chutich.

THISSEN, Justice (concurring in part, dissenting in part).
I join in the concurrence and dissent of Justice Chutich.