It depends upon how those are structured according to the law . An example I ' m not a California attorney here , just using this crazy example but something that does happen with local tax laws is how the building itself might be taxed at one rate , but the equipment meaning machine presses , mills , welding equipment , etc . are taxed at another rate . If you own the property , the tax rates for both items then get merged together at the same taxation rate . In other words , it is the crazy laws of that location that encourage the off loading of the building property to somebody else , so you can save a few hundred thousand dollars per year on property taxes . I agree that somebody needs to end up paying the taxes , but that property owner can also sometimes get special tax breaks due to being a small business , owned by minority groups , or a whole bunch of things that a company like SpaceX doesn ' t want to bother with but they don ' t mind giving to some shell company doing something like operating the building they are leasing . So then that company is able to pay less in property taxes and get a steady income by doing nothing but dealing with the local tax officials .