The Northern Midlands Council has won the right to appeal a decision which could change how rates and fees are charged for Launceston Airport's lessee.
The Federal Court on Thursday granted an appeal to the council against Justice David O'Callaghan's decision in October which had dismissed the council's claim for unpaid rates from the Australian Pacific Airports Corporation.
The council claimed they were owed about $1.7 million.
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The council does not have the power to apply rates and charges on the airport, owned by the Commonwealth government, due to constitutional laws.
When federal airports were privatised in the 1990s, long-term leases were put out to private enterprise.
As part of the contract, lessees were required to make ex-gratia payments to relevant councils in lieu of rates.
A dispute between Northern Midlands Council and APAC started after the airport site was revalued by Tasmania's Valuer-General in 2014 which saw a steep increase in what the APAC would be required to pay in equivalent rates.
The company argued rates shouldn't apply to areas outside shops and hospitality venues within the airport.
The argument was supported by the airport's owner, the Commonwealth Government.
APAC paid the council rates according to an independent assessment by valuer Herron Todd White.
That assessment excluded departure and arrival lounges, baggage claim areas, toilets, and waiting areas.
The Northern Midlands Council has previously claimed due to this methodology, the tally of unpaid rates from the airport owners grew by $285,000 a year
Justice O'Callaghan's decision was set aside by a panel of three federal court judges on Thursday.
The matter will now go back to him for a final determination.
The appeal will be heard in tandem with the Clarence City Council.
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