Tax Carnival #112: Super Bowl of Taxes
'Devil's' tax form prompts man to quit job

Donald Trump must pay property tax on Washington, D.C., Old Post Office project

The current U.S. Postal Service is getting a lot of attention today for its announced decision to end most Saturday mail delivery. The reduction in service is designed to cut costs.

But an attempt by real estate developer Donald Trump to save some money on a former Post Office facility project has been shut down, too.

The Donald, or Trump the Rump as he's known in our house, is planning a new, five-star luxury hotel in the Old Post Office Pavilion on Pennsylvania Avenue.

Old_Post_Office_Building_Washington_DC_Wikimedia Old Post Office Pavilion in Washington, D.C., via Wikimedia Commons

The historic Washington, D.C., structure is on federal property, which typically is exempt from local property taxes.

But because there are so many federal land holdings in D.C., the nation's capital has, in recent years, created a possessory interest tax that establishes a tax on private entities operating within federal buildings. The move was made to help the District meet it's budgetary needs.

So in order to get his hotel up and running, Trump will have to pay millions of dollars in local property taxes to the city.

Trump, who says he was unaware of the property tax assessment, asked Washington, D.C., officials for a waiver of the bill, which is estimated to be around $2 million a year.

While D.C. leaders didn't fire Trump from the project, they did say no to his request.

Pedro Ribeiro, spokesman for D.C. Mayor Vincent Gray, told the Washington Post that it would be unfair to offer a tax break to Trump and his daughter Ivanka, who is a partner in the hotel project, when similar levies are collected against other private companies in the city.

Plus, said Ribeiro, the Trumps were awarded the project through a competitive bidding process.

"It was never part of the bid proposal that the project would not be subject to the tax," Ribeiro said.

Don't be surprised to see the Donald take the issue to court. The man really, really loves a fight.

But similar legal challenges to the D.C. property tax on entities in federal buildings have failed.

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Of course he should. Obviously he has a lot of money and that surely however the amount of the tax he is to pay, he can afford it, he is just so rich.

Steve

Can blame trump for trying but it seems fair to tax him in a similar way to other land owners in the city.

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