"A seawall, bulkhead, or other structure installed solely to prevent shore erosion or damage by wave action of any body of water may not be assessed as an improvement, unless the seawall, bulkhead or other structure is part of another improvement". Tax-Property Article, Section 8-238.

A recent decision by the Maryland Court of Special Appeals interpreted this provision. Atlantic Venture, Inc. v. Supervisor of Assessments of Baltimore City, 94 Md. App. 73(1992). The Court held that bulkhead¹ must be valued (if not exempt under Section 8-238) in the improvements component of the assessment. Bulkhead cannot be valued in the land component of the assessment. Two criteria² were cited to determine if a bulkhead is taxable. First, when the bulkheading furthers a commercial purpose such as the maintenance and support of attached piers, it is taxable. Second, when the bulkhead provides a berthing area for ships, or accommodates the loading and unloading of commercial vessels, the bulkhead is taxable.

Bulkhead is exempt if it is built solely to prevent erosion. A taxpayer may derive a benefit from bulkhead through the addition of land area for commercial use such as a parking lot, but this does not automatically make the bulkhead taxable.

The Court's reasoning would apply to marinas because most marina improvements are for commercial purposes; therefore, the bulkhead used to support piers and slips should be assessed. In residential situations, the predominant purpose of bulkhead is usually to prevent erosion, despite the attachment of a pier.

The assessor may conclude after reviewing a property that certain residential or commercial bulkhead should or should not be assessed. When making these decisions, the assessor should review them with the Supervisor of Assessments prior to final decision. In any case when bulkhead is considered taxable, it should be valued separately as an improvement. If it is exempt, the bulkhead should be identified on the worksheet and noted as exempt.

¹ In this procedure, "bulkhead" means a "seawall, bulkhead or other structure".

² These criteria are by the way of example. They are not exhaustive. Additionally, the Court's decision did not address the situation where the bulkhead is installed to prevent shore erosion, but it is part of another improvement, and therefore taxable.

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