What happens if a lease of an exempt property terminates during a tax year?

When a lease of an exempt property terminates during the tax year, the lessee is entitled to cancellation of fees and a refund. This is because the termination of the lease means that the property is no longer in use by the lessee, who would no longer benefit from the exemptions that applied while the property was being leased.

The refund process is based on the principle that property taxes are generally assessed based on the period the property is in use as a taxable entity. If the lease is terminated, this signifies that the property should not be charged for the full tax year since the lessee is no longer utilizing the property, thus justifying a refund for the period during which they were not in possession.

In terms of other choices, the option about the lessee not being able to request refunds does not align with the rights granted under state tax laws. Additionally, the statement regarding immediate reassessment of the property is not applicable as reassessments occur under specific circumstances and are not automatic with lease terminations. Lastly, requiring the lessee to pay the full year’s taxes contradicts the principle of fairness in taxation, particularly when an exemption exists during the period of lease.