(dissenting) — The majority holds that the taxable value of a lessee-owned improvement on publicly owned land must be reduced to reflect the reversionary interest of the public lessor at the termination of the underlying ground lease. This decision effectively imposes an ad valorem property tax against the particular ownership interest in the property, rather than the property itself. This violates the express terms of the applicable taxing statutes and ignores established precedent. I dissent.
I
Duwamish Warehouse Company leases certain lands from the Port of Seattle. Under the lease agreement, Duwamish retains ownership of the subject warehouse building during the pendency of the lease. At the expiration of the ground lease, ownership and possession of the building, without further consideration, automatically reverts to the Port of Seattle. Duwamish pays no rent for the warehouse building, and the building is not defined as "contract rent" for purposes of RCW 82.29A.020. Under RCW 82.29A.160, the improvement is separately assessed by the King County Assessor pursuant to RCW Title 84. The only issue presented here is whether the Port's reversionary interest in the building must be considered in determining its value for taxation purposes under RCW 84.40.030.
II
In 1976, the Legislature adopted a comprehensive reform of public leasehold taxation by adopting the leasehold excise tax, now codified as RCW 82.29A. This statute substitutes a 12 percent excise tax on rent in place of any ad valorem property tax on public property leased for private *258use. RCW 82.29A.030.1 Duwamish pays no "taxable rent" for the improvement because it retains ownership of the warehouse during the pendency of the ground lease. Under RCW 82.29A.160, such improvements owned by the lessee "shall be taxable to such lessee or sublessee under Title 84 RCW."
It is undisputed that the warehouse here falls under this proviso and is taxable to Duwamish under RCW Title 84. The question is whether the taxable value of the lessee-owned improvement should be reduced to reflect the rever-sionary interest of the Port.
Under RCW 84.40.030, all property must be assessed at 100 percent of its true and fair value in money unless specifically provided otherwise by law. The majority holds the Port's reversionary interest in the warehouse must be considered in order for the assessor to accurately determine the building's "true and fair value in money," or "fair market value". Fair market value is the amount of money which a purchaser willing, but not obliged, to buy would pay an owner willing, but not obligated to sell, considering all uses to which the property is adapted and might in reason be applied. Carkonen v. Williams, 76 Wn.2d 617, 458 P.2d 280 (1969). The majority argues that a buyer would consider reversion of the warehouse building at the expiration of the ground lease in determining what the building is worth.
This decision is grounded on a fundamentally incorrect premise. The majority states at pages 254-55:
Moreover, when the Legislature separated improvements as a taxable unit, it did not expressly state that the entire fee value of the improvement is taxable to the lessee. When there is doubt as to whether the Legislature intended to tax the fee value, the statute must be interpreted to tax only the limited interest in the improvement.
*259(Italics mine.) Both the Legislature and this court have explicitly rejected the proposition that ad valorem taxes are assessed against the taxpayers' interest in the property. RCW 84.40.030 provides in part:
Taxable leasehold estates shall be valued at such price as they would bring at a fair, voluntary sale for cash without any deductions for any indebtedness owed including rentals to be paid.
Thus, the statute is clear that neither the owner's equity nor the existence of any encumbrance or competing interest in the property is relevant in assessing its objective value for purposes of taxation. We stated the principle simply and clearly in Clark-Kunzl Co. v. Williams, 78 Wn.2d 59, 63, 469 P.2d 874 (1970):
Ad valorem property taxes are primarily in rem in character. The tax is imposed against the property itself, not against the owners of the various interests in the land.
In the present case, Duwamish retains full ownership interest in the warehouse building. Because no "contract rent" is paid for this improvement, it is taxable under the provisions of RCW Title 84. RCW 82.29A.160. Nothing in the valuation statute, RCW 84.40.030, suggests that the nature of the owner's interest in the improvement, or another party's subordinate reversionary interest are to be considered in determining the value of the warehouse itself. It is the market value of the building which is subject to the tax, not the market value of the owner's legal interest therein. The fact that a government entity will acquire title to the building at the term of the underlying ground lease is not relevant to the value of the building for taxation purposes.
Conclusion
The majority, in violation of the clear and unambiguous language of the taxing statutes, arbitrarily and without justification gives the subject taxpayer a discount. This violates the fundamental constitutional requirement that *260taxation be uniform. Const. art. 7, § 1 (amend. 14). I dissent.
Dolliver and Dimmick, JJ., concur with Dore, J.
Reconsideration denied October 17, 1984.
RCW 82.29A.030 provides in part:
"There is hereby levied and shall be collected a leasehold excise tax on the act or privilege of occupying or using publicly owned real or personal property through a leasehold interest on and after January 1, 1976, at a rate of twelve percent of taxable rent. ..."