The council has argued airport owner, Australia Pacific Airports, has failed since 2013 to pay a fair share of ex gratia rates as it is required to do under its lease on the facility from the Commonwealth Government.

The court heard on Wednesday the airport last paid about $229,000 in ex gratia rates in 2013-14.

An email from airport general manager Paul Hodgen was submitted as evidence which showed the value of annual ex gratia rates from 2012-13 to 2016-17 declined each year. The court heard there was disagreement from both parties over the airport's valuation.

APA has disputed the increased valuation of the airport in 2013 by Tasmania's Valuer-General but the council has claimed the company in its own valuation sought from a Melbourne firm excluded sections of the property and overlooked profit-generating fees and charges.

The matter is being heard at the same time as one involving Clarence City Council and Hobart Airport on the same issue.

Counsel representing the councils, Shaun McElwaine, in his final submission said the dispute arose from the constitutional status of the land on which the airports rest, the valuation of that land, and the distinction between taxes and service charges.

He said the Commonwealth's argument that the airports were not profitable operations did not stand up.

Launceston Airport's commercial and business development manager, Michael Cullen, (pictured) was quizzed on the airport's operations in a closed court which revealed it did make a profit.

Lawyers representing Hobart Airport did not argue that the airport did not make a profit, Mr McElwaine said.

The case before Justice David O'Callaghan is expected to wrap up today with the remaining final submissions.

The Northern Midlands Council believes it is owed about $2 million in rates and contends the tally goes up $280,000 each year the matter remains unresolved.