The Colorado Supreme Court has ruled in favor of Montezuma County’s long-fought contention that commercial businesses operating on public property are legally taxable.

The court’s 4-3 decision, issued Monday, has far-reaching implications for Colorado governments and municipalities because it creates a property-tax windfall.

Possessory interests are those on lands leased by commercial businesses operating on public property, including private businesses within national parks, ski areas operating on federal land, sports franchises at taxpayer-owned stadiums, and commercial operations in public airports.

Those businesses were exempted from state property tax by a 1996 state law passed at the urging of such businesses. Commercial sports franchises such as the Denver Broncos lobbied heavily for the statute, which was was upheld on appeal.

In 1989 Montezuma County began taxing ARA-Mesa Verde Company, the concessionaire at Mesa Verde National Park, believing it had the constitutional right to do so. The company challenged the decision, and the Montezuma County Commission, through its attorney, Bob Slough, saw its case go to the state supreme court three separate times, each time picking up counties supporting the taxing right along with companies opposing it.

Mesa Verde Company paid property taxes on its facilities in Mesa Verde National Park in 1989; no taxes on the property were assessed between 1990 and 1995, and the county resumed billing for those taxes in 1996 but the concessionaire protested the tax bill and did not pay.

Montezuma County Treasurer Bobbie Spore said Monday that the firm’s unpaid bill since 1996 amounted to "a quarter of a million dollars, give or take."

The battle finally culminated in two cases heard by the state supreme court last fall — one involving Vail Associates versus Eagle County, and the other involving seven counties, including Montezuma, versus the State Board of Equalization.

The court opinion, delivered by Justice Gregory J. Hobbs Jr., overturns the appeals court ruling that allowed companies on public lands the exemption from property taxes, on the grounds that such exemptions violate the constitution. The state constitution allows governments the authority to levy taxes within their territories.

"The statutory exemption prohibits taxation of certain possessory interests, such as Vail’s, while continuing taxation for other possessory interests, such as mineral leases, in federal lands," wrote Hobbs in a lengthy decision.

"The Supreme Court holds the tax exemption to be unconstitutional because it selects some possessory interests for exemption, but not others and the exemption is not among those provided for in the Colorado Constitution."

The decision "reverses the court of appeals, severs the unconstitutional provisions from the tax code," and "orders the tax authorities to proceed with the taxation of possessory interests that evidence significant incidents of private property."

ARAMARK corporate attorney Dave Buckman, speaking Monday from the company’s Philadelphia headquarters, said that he was aware of the case, but had not heard of the decision authorizing the tax. He declined to comment.

This is the second time the state supreme court has ruled in favor of the county’s right to tax possessory interests, and the fourth time it has heard the case. In 1992 the court ruled the county did not have the legal standing to challenge state law. In 1994, using a new law allowing such a challenge, the county filed its case again, and the court ruled in favor of the company again.

The county filed for a re-hearing, and in 1995 the court ruled in favor of the county 5-2, prompting industry lobbyists to successfully push for the 1996 law that was overturned by the recent exemption ruling.

County Assessor Bob Cruzan said, "This (ruling) means we’ve been on solid legal ground in assessing these taxes."