FFW ENTERPRISES v. Fairfax County

Present: Hassell, C.J., Koontz, Kinser, Lemons, Goodwyn, and
Millette, JJ., and Lacy, S.J.

FFW ENTERPRISES
OPINION BY
v. Record No. 091883 JUSTICE S. BERNARD GOODWYN
November 4, 2010
FAIRFAX COUNTY, ET AL.

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Jane Marum Roush, Judge

FFW ENTERPRISES

v. Record No. 091930

FAIRFAX COUNTY ECONOMIC
DEVELOPMENT AUTHORITY, ET AL.

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Stanley P. Klein, Judge

In these appeals, 1 we consider whether Code §§ 58.1-3221.3

and 33.1-435 violate the Constitution of Virginia (the

Constitution). FFW Enterprises (FFW) owns commercially-zoned

real property located in Fairfax County. The property has been

assessed taxes as authorized by Code § 58.1-3221.3 and Code

§ 33.1-435, and FFW is challenging the constitutionality of

those tax statutes.

I. Procedural History

In 2008, FFW brought an action against Fairfax County (the

County) and the Board of Supervisors of Fairfax County (the

1
The appeal of Parkridge 6, LLC, et al. v. Fairfax County
Economic Development Authority, Record No. 092006, which was
consolidated with these cases, was dismissed by order dated
August 30, 2010.
Board) in the Circuit Court of Fairfax County for refunds of

taxes paid pursuant to Code § 33.1-435 and Code § 58.1-3221.3.

FFW contended that these two tax statutes were facially

unconstitutional in violation of the uniformity requirement of

Article X, Section 1 of the Constitution because the statutes

impose certain taxes on commercial and industrial real

properties within the County, while excluding other real

property.

The parties submitted a joint stipulation of facts and

proceeded on cross motions for summary judgment. The circuit

court denied FFW’s motion for summary judgment, but granted the

County’s motion for summary judgment, holding that FFW failed

to prove that the statutes were unconstitutional. In its

letter opinion, the circuit court stated:

For this court to invalidate the legislative
classification of property for taxation purposes,
there must be no rational basis for the
classification. The County has posited several
conceivable rational bases for the classifications
in this case:

For example, the General Assembly may have
believed that commercial and industrial
property would benefit disproportionately from
the transportation improvements to be made
using tax revenues (as the landowners
requesting creation of the Phase I District
asserted in their Petition), perhaps because
such improvement might enable more intense
commercial and industrial uses than otherwise
would be possible and thus potentially could
result in more significantly increased
commercial and industrial property values.

2
 The General Assembly may have believed that
residents would share indirectly in the costs
of transportation improvements by a tax levied
only on commercial and industrial property, in
that they would pay higher prices for goods
and services because the owners of such
properties likely would attempt to recover the
cost of the additional tax burden from
customers and tenants, and thus to impose the
tax on residential properties would result in
a form of undesirable double taxation of
residents. The General Assembly may have
believed that because of the potential
opportunity for owners of commercial and
industrial properties to pass at least some of
the cost of the additional tax burden on to
others, such properties could more easily,
fairly, and equitably bear that burden.

It is not the County’s burden, however, to prove that
there is a rational basis for the classification.
The burden rests upon the challenger of a tax
classification to prove that no reasonable basis for
that classification can be conceived. FFW has failed
to meet that burden.

FFW appeals (Record No. 091883).

In 2009, after the above-mentioned case concluded, the

Fairfax County Economic Development Authority (EDA) brought a

complaint in the Circuit Court of Fairfax County under Code

§ 15.2-2650, et seq., concerning validation of Transportation

District Improvement Revenue Bonds (the Bonds). The Bonds were

to be repaid by the proceeds of the tax levied pursuant to Code

§ 33.1-435. Under the provisions of Code § 15.2-2651, such a

proceeding may validate, inter alia, “the tax or other means

provided for payment of the bonds,” so EDA sought a ruling that

a tax per Code § 33.1-435 is constitutional. FFW, as a

3
property owner in the County, intervened in the bond validation

proceeding as a statutory defendant under Code § 15.2-2650, et

seq., and opposed the EDA’s complaint. FFW appeared at that

proceeding to reserve its rights as to the constitutional

arguments made in the prior case. The circuit court held that

the imposition of the tax pursuant to Code § 33.1-435 complied

with the Constitution and entered an order validating the

bonds. FFW appeals (Record No. 091930).

Upon joint motion of the parties, this Court has

consolidated the two appeals (Record Nos. 091883 and 091930).

Both appeals concern the constitutionality of the relevant tax

statutes.

II. Factual Background

Code § 33.1-431 was enacted by the General Assembly in

2001. See 2001 Acts ch. 611. It permits a county with a

population of more than 500,000 2 to create a transportation

district and impose a special improvements tax on real property

zoned for commercial or industrial use (or used for such

purposes), as well as on taxable leasehold interests located

within that transportation district. Code §§ 33.1-430, -431

and –435. One of the requirements for creating such a

2
At present, Fairfax County is the only county in Virginia
with a population of over 500,000. See U.S. Census Bureau,
State & County QuickFacts, Fairfax County, Virginia,

4
transportation district is that the owners of at least fifty-

one percent of either the land area or of the assessed value of

real property within the proposed transportation district,

whose property would be subject to the tax, must petition the

county and ask that the district be created and that property

in the district be taxed. Code § 33.1-431(A). Revenues raised

by this tax are either to be dedicated to transportation

improvements within the district, or to be paid to the

Commonwealth Transportation Board. Code §§ 33.1-431, -435 and

-436.

In 2003, pursuant to Code § 33.1-431, the owners of at

least fifty-one percent of the assessed value of real property

zoned for commercial or industrial use, or used for such

purposes, located within the boundaries of the proposed

district, petitioned the Board to create the Phase I Dulles

Rail Transportation Improvement District (the District). The

owners submitting the petition contended that the District

should be subject to taxation in accordance with Code § 33.1-

435, in order to fund a portion of the cost of extending the

“Metrorail” service toward Dulles Airport, specifically, the

extension of the Orange Line of Metrorail from Falls Church to

Reston. The petition contended that the owners of taxable real

http://quickfacts.census.gov/qfd/states/51/51059.html (last
visited Nov. 2, 2010).

5
estate zoned for commercial or industrial use, and subject to

taxation under Code § 33.1-435, would “benefit specially” from

the proposed transportation improvements.

The Board adopted resolutions in 2004 to create the

proposed District. 3 Beginning in 2006, the tax authorized by

Code § 33.1-435 began to be levied on the real property located

in the District that was zoned for commercial or industrial use

or used for such purposes, including property owned by FFW.

FFW paid the taxes assessed under Code § 33.1-435 for tax years

2006, 2007 and 2008. Residential real property located within

the District is not subject to the tax.

Code § 58.1-3221.3 was adopted by the General Assembly in

2007. See 2007 Acts ch. 896. In summary, that statute permits

all counties and cities embraced by the Northern Virginia

Transportation Authority to assess a tax on real property zoned

or used for commercial and industrial uses. The proceeds of

such tax are dedicated to local transportation improvements.

Residential real property is not subject to the tax.

In 2008, the Board began to levy and collect a tax

authorized by Code § 58.1-3221.3 on all commercial and

industrial property located within Fairfax County as an

3
FFW stipulates that all actions of the Board and County
have been done in strict accordance with the statutory
requirements of the respective Code sections.

6
additional part of the funding strategy for transportation

improvements in the County. For tax year 2008, FFW paid

$546.96, as assessed under Code § 58.1-3221.3.

III. Analysis

FFW claims that the taxes imposed pursuant to Code

§§ 58.1-3221.3 and 33.1-435 violate the uniformity requirement

of Article X, Section 1 of the Constitution. FFW argues that

the statutes are unconstitutional because, applying the

principle of expressio unius est exclusio alterius 4 in

interpreting the Constitution, Article X, Section 1 requires

the General Assembly to treat all real property within a given

jurisdiction as a single indivisible class for purposes of

taxation. FFW further asserts that even if the General

Assembly does have the constitutional authority to classify

real property within a jurisdiction, the classifications used

in Code §§ 58.1-3221.3 and 33.1-435 are unconstitutional

because they lack any reasonable basis.

There is a strong presumption in favor of the

constitutionality of statutes. Town of Ashland v. Board of

Supervisors, 202 Va. 409, 416, 117 S.E.2d 679, 684 (1961);

Hunton v. Commonwealth, 166 Va. 229, 236, 183 S.E.2d 873, 876

(1936). Indeed, “[t]here is no stronger presumption known to

7
the law than that which is made by the courts with respect to

the constitutionality of an act of Legislature.” Whitlock v.

Hawkins, 105 Va. 242, 248, 53 S.E. 401, 403 (1906). Any

reasonable doubt as to the constitutionality of a statute must

be resolved in favor of its constitutionality, and “[o]nly

where it is plainly in violation of the Constitution may the

court so decide.” Almond v. Gilmer, 188 Va. 822, 834, 51

S.E.2d 272, 276 (1949). The General Assembly may enact any law

or take any action “unless it is prohibited by the state or

federal constitution in express terms or by necessary

implication.” Dean v. Paolicelli, 194 Va. 219, 227, 72 S.E.2d

506, 511 (1952); see also Kirkpatrick v. Board of Supervisors,

146 Va. 113, 126, 136 S.E. 186, 190 (1926).

“We will not invalidate a statute unless that statute

clearly violates a provision of the United States or Virginia

Constitutions.” Marshall v. Northern Virginia Transportation

Authority, 275 Va. 419, 427, 657 S.E.2d 71, 75 (2008) (citing

In re Phillips, 265 Va. 81, 85-86, 574 S.E.2d 270, 272 (2003);

City Council of Emporia v. Newsome, 226 Va. 518, 523, 311

S.E.2d 761, 764 (1984)). Here, we are only concerned with the

applicable provisions of the Constitution of Virginia. “The

party challenging an enactment has the burden of proving that

4
“A canon of construction holding that to express or
include one thing implies the exclusion of the other, or of the

8
the statute is unconstitutional.” Id. at 428, 657 S.E.2d at 75

(citing Hess v. Snyder Hunt Corp., 240 Va. 49, 53, 392 S.E.2d

817, 820 (1990); Blue Cross of Virginia v. Commonwealth, 221

Va. 349, 358-59, 269 S.E.2d 827, 832-33 (1980)).

When challenging the legality of an assessment,

[T]he burden of proof shall be upon the taxpayer to
show that the property in question is valued at more
than its fair market value or that the assessment is
not uniform in its application, or that the assessment
is otherwise invalid or illegal, but it shall not be
necessary for the taxpayer to show that intentional,
systematic and willful discrimination has been made.

Code § 58.1-3984(A).

FFW urges this Court to adopt “the rule of universality”

and to hold that the uniformity provision of Article X, Section

1 mandates that all real property be deemed one indivisible

subject class for purpose of taxation, subject only to the

express exceptions contained in the Constitution itself. FFW

states that the rule of universality it urges this Court to

adopt is simply a shorthand term for the application of the

principle of expressio unius est exclusio alterius to the

uniformity provision contained in Article X, Section 1 of the

Constitution. FFW, citing Wade J. Newhouse, Constitutional

Uniformity and Equality in State Taxation § 2.03(B), at 18 (2d

ed. 1984), contends that “[w]hether a state’s constitutional

uniformity requirement mandates a ‘rule of universality’ –

alternative.” Black’s Law Dictionary 661 (9th ed. 2009).

9
i.e., prohibits the state legislature from exempting particular

classes of property from taxation beyond those exemptions

expressly provided in the Constitution itself” – can be

determined by the structure and language of the subject

constitution itself. FFW concludes that the structure and

language of the Constitution, properly construed, implies that

a rule of universality with regard to the taxation of real

property exists.

FFW argues that the specification in the Constitution of

certain types of real estate eligible for an exemption,

deferral or relief from taxation 5 implies that types of real

5
Article X, Section 1 provides in part:

All property, except as hereinafter provided,
shall be taxed. All taxes shall be levied and
collected under general laws and shall be
uniform upon the same class of subjects within
the territorial limits of the authority levying
the tax, except that the General Assembly may
provide for differences in the rate of taxation
to be imposed upon real estate by a city or
town within all or parts of areas added to its
territorial limits, or by a new unit of general
government, within its area, created by or
encompassing two or more, or parts of two or
more, existing units of general government
. . . . The General Assembly may define and
classify taxable subjects.

Article X, Section 2 provides in part:

The General Assembly may define and classify
real estate devoted to agricultural,
horticultural, forest, or open space uses, and
may by general law authorize any county, city,

10
estate not so specified, such as residential real estate as a

whole, shall not be entitled to exemption, deferral or relief.

FFW asserts the natural reading of Article X, Sections 1, 2 and

6, applying the doctrine of expressio unius est exclusio

alterius, results in the conclusion that the uniformity clause

in Article X, Section 1 requires all real property within a

given jurisdiction be treated as a single, indivisible class

for the purpose of taxation, except for the exceptions

specifically mentioned in the Constitution. Thus, FFW claims

that Code §§ 58.1-3221.3 and 33.1-435 are unconstitutional

because those statutes violate the uniformity clause in Article

X, Section 1.

town, or regional government to allow deferral
of, or relief from, portions of taxes otherwise
payable on such real estate if it were not so
classified, provided the General Assembly shall
first determine that classification of such
real estate for such purpose is in the public
interest for the preservation or conservation
of real estate for such uses.

Article X, Section 6 states in part: “Except
as otherwise provided in this Constitution, the
following property and no other shall be exempt from
taxation, State and local, including inheritance
taxes,” after which a list of certain classes of
property is provided.

FFW notes that residential real property as a
whole is not listed in the Constitution of Virginia
“under any of these sections as a class of property
that may receive a deferral of, or relief or
exemption from, taxation.”

11
 We disagree. When addressing the power of the General

Assembly, the appropriate starting place is the first paragraph

of Article IV, Section 14, which provides:

The authority of the General Assembly shall extend to
all subjects of legislation not herein forbidden or
restricted; and a specific grant of authority in this
Constitution upon a subject shall not work a
restriction of its authority upon the same or any
other subject. The omission in this Constitution of
specific grants of authority heretofore conferred
shall not be construed to deprive the General
Assembly of such authority, or to indicate a change
of policy in reference thereto, unless such purpose
plainly appear.

Va. Const. art. IV, § 14. As described by Prof. Howard, the

portion of the constitutional provision quoted above states two

propositions:

(1) that the Legislature has the power to legislate
on any subject unless the Constitution says
otherwise;

(2) that the canon of construction, expressio unius
est exclusio alterius, does not apply in
interpreting the legislative powers of the
General Assembly.

1 A.E. Dick Howard, Commentaries on the Constitution of

Virginia 538 (1974); see also Report of the Commission on

Constitutional Revision 152-53 (Jan. 1, 1969). The

Constitution does not grant power to the General Assembly; it

only restricts powers “otherwise practically unlimited.” Lewis

Trucking Corp. v. Commonwealth, 207 Va. 23, 29, 147 S.E.2d 747,

12
751 (1966); see also Terry v. Mazur, 234 Va. 442, 449, 362

S.E.2d 904, 908 (1987).

FFW’s argument urging this Court to adopt a “rule of

universality” is based upon the incorrect premise that the

Constitution delegates powers and specifies authority, and that

incorrect premise results in too narrow an interpretation of

the power of the General Assembly. In contrast to the federal

Constitution, the Constitution of Virginia “is not a grant of

legislative powers to the General Assembly, but is a

restraining instrument only, and, except as to matters ceded to

the federal government, the legislative powers of the General

Assembly are without limit.” Harrison v. Day, 201 Va. 386,

396, 111 S.E.2d 504, 511 (1959); accord City of Roanoke v.

Elliott, 123 Va. 393, 406, 96 S.E. 819, 824 (1918).

Although no provisions of the Constitution directly limit

the General Assembly’s authority to define and classify taxable

subjects, FFW asserts that application of the doctrine of

expressio unius est exclusio alterius creates an implied “rule

of universality” restricting the General Assembly’s authority

on this subject. Arguments based on implied constitutional

limitations on the legislative power of the General Assembly

are particularly disfavored. “If there be any restraints by

implication, the restraint must be so necessary and so plainly

manifest as to require the implication in order to enforce the

13
restraints expressly imposed.” Breckenbridge v. County School

Board, 146 Va. 1, 5-6, 135 S.E. 693, 695 (1926); see Marshall,

275 Va. at 428, 657 S.E.2d at 75-76. “[W]hen a court, in

determining the constitutionality of a statute, departs from

the express limitations of the Constitution and relies instead

on implied constitutional restrictions, the legislative

usurpation must be very clear and palpable to justify the

court’s holding that an enactment is unconstitutional.”

Marshall, 275 Va. at 428, 657 S.E.2d at 76 (citing Whitlock,

105 Va. at 249, 53 S.E. at 403).

Among the powers of the General Assembly expressly

recognized by the Constitution is the authority to define and

classify taxable subjects. Va. Const. art. X, § 1. We hold

that Virginia law does not support FFW’s argument that the

Constitution contains an unstated, implied ban on the ability

of the General Assembly to classify commercial and industrial

real estate differently from other real estate for taxation

purposes.

FFW argues that even if this Court declines to adopt the

“rule of universality” with regard to real property, the taxes

imposed by Code §§ 58.1-3221.3 and 33.1-435 are

unconstitutional under the uniformity provision of Article X,

Section 1 of the Constitution because the tax classifications

therein lack a reasonable basis. It is clear that Article X,

14
Section 1 grants the General Assembly the ability to “define

and classify taxable subjects.” However, that power is not

absolute. Any such classification must rest upon a reasonable

basis. In determining whether a tax classification is

unconstitutional for lack of uniformity under Article X,

Section 1, we have stated that the classification may not be

“arbitrary, discriminatory or unreasonable.” East Coast

Freight Lines v. City of Richmond, 194 Va. 517, 527, 74 S.E.2d

283, 289 (1953). This standard has been likened to “rational

basis” scrutiny. Board of Supervisors v. McDonald’s Corp., 261

Va. 583, 591, 544 S.E.2d 334, 339 (2001) (using same standard

for zoning ordinances); see also Commonwealth v. Whiting Oil

Co., 167 Va. 73, 78, 187 S.E. 498, 500 (1936). “One who

assails the classification . . . must carry the burden of

showing that it does not rest upon any reasonable basis, but is

essentially arbitrary.” Whiting Oil Co., 167 Va. at 78, 187

S.E. at 500.

FFW has presented a facial challenge to the

constitutionality of the tax classifications in Code §§ 58.1-

3221.3 and 33.1-435, and it has the burden of proving that

there is no reasonable basis for the classification legislated

by the General Assembly. FFW bears the burden of negating

every basis that might reasonably support the General

Assembly’s presumptively constitutional decisions to classify

15
specified kinds of real property as objects of taxation in Code

§§ 33.1-435 and 58.1-3221.3.

Citing City of Hampton v. Insurance Co. of North America,

177 Va. 494, 14 S.E.2d 396 (1941), FFW claims that a tax on a

particular class of property to raise revenue for a specific

purpose lacks a rational basis, and is not uniform under

Article X, Section 1 of the Constitution, if those not part of

the taxed class benefit from the purpose of the tax as much or

more than those who are taxed. FFW notes that the subject tax

statutes only tax certain commercial or industrial real

property and exclude residential real property from the

respective tax classes. FFW also notes that the challenged

taxes, by their terms, collect revenues for the purpose of

funding transportation improvements that either benefit the

entire taxing locality or the general public as a whole.

According to FFW, these facts are sufficient to prove that the

challenged tax statutes violate the uniformity provision, and

the circuit court erred in failing to find the tax statutes

unconstitutional.

In City of Hampton, this Court considered the

constitutionality of state statutes under which the city of

Hampton passed an ordinance levying a tax on fire insurance

companies licensed to do business in Virginia. Id. at 496, 14

S.E.2d at 396. The Hampton tax was on fire insurance policies

16
covering property within the city’s limits, and the proceeds of

the tax were for the benefit of a firemen’s relief fund. Id.

The Court was asked to determine the constitutionality of the

tax classification under the uniformity provision of the

Constitution at the time. 6 Id. at 497, 14 S.E.2d at 397.

This Court stated:

An examination of the Act of 1934 and the
ordinance in question imposing the tax reveals its
lack of equality and uniformity. It is seen at once
that a burden is placed upon a limited class of
insurers or taxpayers for the purpose of the relief
of a certain other limited class of persons or
citizens. Under the guise of taxation, money is
taken from the pockets of a certain class or type of
persons and put in the tills of another class of
persons. When we look for a reason for this apparent
disregard of the spirit which underlies all forms of
taxation, we find its alleged justification in the
suggestion of a quid pro quo; that certain fire
insurance companies should be required to pay a tax
to provide a fund for needy members of the fire
departments of the municipalities in which they are
because the fire insurance companies are benefited by
the existence and the functioning of the fire
departments.

With the thought of the constitutional
requirement of equality and uniformity of taxation, we
are led to a step further to the inquiry, are there
others, who are benefited as much or more than those
smarting under the tax imposition, who go unwhipped of
its burden?

Id. at 497-98, 14 S.E.2d at 397.

The decision in City of Hampton is based upon the

circumstances present in that case, specifically, the limited

6
Va. Const. § 168 (1902).

17
class of beneficiaries of the tax and the quid pro quo

justification given for that tax. FFW’s reliance upon City of

Hampton, in this instance, is misplaced because similar

circumstances are not present. Here, the class of

beneficiaries is broad and multiple justifications were offered

for the tax.

Moreover, even if the “benefit/burden” test of City of

Hampton is applied to this case, the circuit court did not err

in finding that FFW failed to present evidence that residential

property owners will be benefited by the proceeds of the

property taxes “as much [if] not more” than commercial and

industrial property owners. FFW asserts that it need only

demonstrate that others who are untaxed will benefit from the

transportation improvements funded by the taxes. However, that

does not prove, and there is no evidence in the record, that

they will benefit as much or more from those improvements as

the property owners in the taxed class, especially in this

instance when a majority of the taxpayers subject to the tax

imposed by Code § 33.1-435 have declared that they will benefit

specially from the proposed transportation improvements. FFW

has failed to posit or to present evidence concerning any other

reason why the tax classifications chosen by the General

Assembly are unreasonable or arbitrary.

18
 IV. Conclusion

We hold that FFW has failed to meet its burden to prove

that no reasonable basis for the tax classifications in Code

§§ 58.1-3221.3 and 33.1-435 can be conceived. The fact that

untaxed others will benefit to some extent from the

improvements funded by the taxes does not prove that there is

no rational basis for the tax classifications approved by the

General Assembly.

For the foregoing reasons, we will affirm the judgments of

the circuit court.

Affirmed.

19