Case Information
*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN
Houumble Fmd L. Blundell
Dirtriot Attmy
22nd Judlalal Rlatrlct
Loo%bart,TeJBI
Dear sir:
LulLng Indqpemdent latrlot# llrnl ii aon- in trenat, what 18 length of tbm 1t in rtomge vlthout 5, 1945, you lmvv reqrueted to the above mbjeat. me P en, quoted: 8 a tanksmulloQated epeudent 8ahool DistCiot. Catplny Apmtofttmtmk IlErto rtore
OPudO Oil and uaodbythoa0a&WytostonWude lat., .19'&5 company 'A‘ reported bvln& or bnrrels Or amde oil In otorwe rrohool distriot, subject to be ren- dePud ror taxsrr. The nwnber of twrel8 of arkle oil mpartud by aomyany ‘A’ VBS aoaoiderebly lea8 then the number reported by the Rallrosd ~cmaloaion. When the otYiaers of ctmprg *A* vere retid abcut the dit- rert?Rce~ they stated that a pert 0r ths Oil vhloh vas dFd not hem '8ltuS' il3 th. LuliW iR StOl’Wge 8t Lulli-@ Schwl DistrirJt end therefm ~8s not teacable bY tb@ diatP&ot .
Bon. Frad L. Blu~dell, Page 2
"We rhould 8~raOiSte your opinion ontbe follOvtRg quSatioRar
'(1) Is all arrde oil vbioh is bald by coplpeng ‘A’ in .Ftorrr@s *t tha Lullq tank S6rm on Jenuary 1, 1985 rubjeat to tmcation ?i$ the Lullag Iadepmxdsnt School Diatriot?
"(2). If a part af' tbs 011 held in tbs LulZng tank ferm on January 1, 1945 is in trmalt and not taaPbla by ttw Luling Sohool Matriot, bov lmg m~y it ba lmld in storage at tha Lullng tank frzm awl mot b8 aubjeat to tS%StiOR by tbS Luling Indqmd- eat 96ho42 MaWLot?"
Without mom details regarding tha atOm@ of thy oil In question, a deflulta aneva~ to the quest&ma p~aaatad is difficult. T h e l takmantbytbo aompanytbattba l Itw of tb* 011 in quaatlon vaa not Fn tba soboo% diatfiot is a ocwlu- aion vlth whiob, In ths ba*noe of knav1od&m of tba t*ata ou vbIubauPhocmluaionvaa baaed,neltberaonourmnoe nordla- agraamant la peaslble. HOU*WOC, e dIaquI*itlon Of tbs pmx~iplma hare tn~olv~dnpgaervatoa~awr tha queatiom ga~mallytithout tllb l ubnfa aion of furthar detailed ~aota.
Assuming that tha tmcatlon la question 0uq.r~a ad
valomm taxya, the taxabllfty of the 011 in a+~%‘@= turna on a detorml.natlon of the eltua al awh Oil ior taxfltl0n puPpWe*.
Oslmrally, tlaa ve11le*tab1I*&d oomlcQ1aw mrs3.m ef "mobIl$a aequuntuc ~raorma" (srmblea follcw the poraon) or ths ban its legrtz aitua at tha ploae p~imfpiail tbat pwowl mperty cb its wner'II dolgci10 r&a a governed the taxationof tSn@blS rrOnSlproparty. Although the Coartitutlan of 'hxaa (ArtIule , Seotlon 11) pZWidS8 tbSt "all PrOpartY, VhSthSr ~vn~d by r pa~~ona or aorporationr shell ba iha8seaed fan teXMlan, a@ t@aes paid tn the aounty vbwa altuatSd", it hem baenhrld bytba Sumnm court of Texea tie this provlalonia uomoretbans dsalaratlon of the oom~~iavrulelntbat "aln0S it bad nf6r~~0stotbataxirig paver!, Iti evldSntlg nmarlt propS??ty VhSro aitusted tar thS purposes of te%StiOR under the B*IUW51 pPiW~)3~88 of lav am thsn un&0r*tood.” (city of port Worth Y. southland Ga’ephound Llnea 9. W. 2d) 3%; 8. c. is 2.. F. Ry. co. 0. cl* of Dallas, 14 s. u. (26 2921 *3 Ho&* Fred L. Bluz?Mll, Peg;0 3
0-t g~~pqu& IUS. 00. .v. city uf Austin, 243 91 v. 778; Y. liadea, 2ll Be w. 766~ Parri* v. KlmblS, city ,& mfmtm a. w. 6%). 'phia inu zwatiet;, is aeld also to apply to "p Apt;al@ 7153, Revised clfvi StatuEaa Op lba*, a* ACED *f+ pow owlOwnt to the Sbovr, Owmmm.anal pmmlalaa (me0 OS*** aupm ) , vhich provtdra :
"All pmmFW. awe1 and pam+anl, exoept much am ianqulrvd tok1iakdrndea#*aedothania*, @Ml1 ba llated end l a a0a ae6 tn tha *omty ulmse it to Snd ell pesamal propert , subjoe ir SitUSUd1 trXationendteu&mmrl~yx'elO*dd frtm haStaM 0 t ,.,i OOdaty, shall W liatofl l rd saaia*od in tha *Nty d tha kaldewe aS the mmar tharoof, or in tha B)OuatY when the prLnaQe2 offioe of Suob OUWP is aitwtad.w
HWWOP, tha prlmofplo tbrt the tezeble aitw o? peraakalpmpotiy La at tha naldmfae of the mner %a notrttheut and iteppeeravell l ottlodthatteryLibl* pwaaul eroeptiwa p r r pg ydw~8~ub o a l ltua far, uxatiar 81pvlmr0 tan b& rad 51 ti. JUP.
(OSlolsStOti Y* l8Sdea, a\rpn, SW. 451, p. 466;. It l.a u&d that the l ltw of tenglble per- sonal pmpea-ty~depawla on #a otmsaetw oi sa wo (0.~. & 8.~. Ry.Co. v. CltyofDallaa,aupn)ardtbmtthe teatiavbmn o r not ‘tha p p qetp is l ltuatad titblt~ tk jwladiatfw am,y $a-a~~ie~,peofit thwe. (51 k. Jur., sec. 454, p. 469 l ti
. tha ovne~*m dcunlclle doar not aoqulre taabla aitua in awb juria- dtitiou (Fort With Y. Swthl4nd Licma, uprefi FSTCIS t. ELrblo, arrpre$ 51 Am. JUT., Sac. 455, p. 469). Dal*ya in transit, humvar, mpy ox-o&a teoblo aitua in a jwiadlctlon~ tm which tha proparty pSaaea and much tama on tha mt ati dumtioa of tha belay (51 Am. Jr., Sac. 45Sr mupro; Awe. In+%? L. RX
IX tb delay is lnoldent to tha tmnaportat%~ o? #a property, no aitua is aaquimd, but if t&o pmpmty is do&aim94 in tPenai,t fan e partiaulasll pwpwo oc objeot other than Its
Hoh.'Fred L. Blundell, Page 4
tranapOrt&iOn, situs la acquired In the juriadlotion where it vaa 80 detained. So it hem been held that 011 aaaumulated In the uorklng tanka of e pipe line oompany by reason of aon- geated traffia and the lnablllty of the aompeny~a patrons to receive the production of the fields aarvad d,ld not aoqulre taxable situ8 in the county where it vas held in store e (Cum- On berlend Pipe Line Co. v. Commonveelth, 79 9. W. 2nd. 3 6). % the other hand, 011 shipped from one jurisdlation to e aeoond where it was to be eparatad and processed end then shipped to a third jurlsdlatlon vea held to eaquira altua in the reoond jurimdiotlon alnce tha purpose of the deleg we8 not lnolent to its trenaportatlon (Oeneral 011 Co. Y. Craln, 209 U. 9. 211). It has also been held that grain shipped from eouthem to eaat- em states but removed from tha oars in an intermediate state for the purpose of olaaalfloation and saoklng aoqulred taxable in the lntermedlate state (Baoon Y. Illlnola, 277 u. 9. Bitw 504). In this lest Oaae the ovnerahlp or the grain and the right to dlapoae of it or divert its shipment in the lntermed- late State we8 oonsldered a material f8at.w.
The duration of the ~dalay should baer a dlraot rela- tion to prevloua pract&oea and the usual oourae d the bualneaa under oonalderation. t ham been maid that permananoy of 1ocStlon f la not required to fix aitua for taxation (0. 0. & 5. F. Ry:Co. v. City oP Dallaa, rupra) and that the queatiq3 is ea much one of feat 88 of lav (Qrlggaby Conat. Co. v. Fraawg, 32 Se. 399). The concept of permanenoy in this ragSrd is variable and ona vrlter (oonf'ounded by the Imperfection of words) deaarlbad the location of property oonte lated em "permanent for the time being*. (51 Am. Jur., 900. 454 . "g
From the foregoing, it Fa apparent that the taxabilIty, or taxable altua of the oil in question oannot be properly deter- mined simply on the premise that It va8 stored on a oertain date by an oil company or by e pipe line aompany. Ror aen there be fixed an invariable time when the 011 (If in transit at the out- set) cease8 to be transient and beoomaa Apermanentt." 1t is not impossible, hovever, to consldar the questions in the instant case contingently.
That portion of the 011 vhloh a8 of January 1, 1945, was stored incident to its trans ortetlon should be oonsldered Pro tlve OS ita being In transit is in transit and not taxable.
are such considerations as that (1) the tanks in which it we8 stored were an Integral part of the pipe line trana ortetioa system and vere 80 rendered for tax p~osea, (2) tie use of the tanks vaa exclusively for storage of oil fn transportation or that the tanka were not ueed for storage for other purpoae8, *5 Hon. Fred L. Blundell, Page 5
(3) the Oompany'8 only Interest in the Oil wa8 its tran8por- tation, (4) the owuer8hip of th8 oil rent&3 in ram other firm ng wa8 obligated to deliwr it to a or peMon, (5) the 0 deflnlte deatlnetlon, 6) the oomp~ny hsd no right to divert T it to any use of its own.
That portion of the oil whiah 81 of Janu8ry 1, 1945,
was stored for purporee other then its tratyportation rhohld be oon8ldered to haw aoquired 8ltu8 in the rohool dietrlct and, therefore, taxable. Probatiw o? 8uoh acquirition of situ8 8re ruoh coxmideratlon8 618 that (1) the oompauy oumd the oil and had the right to ume it ior any purpo8e it might choose, the tank8 used wer8 not a p8rt of the pip8 line 8y8teIU, 3 the storage MI ill tank8 generally u8ed for pur- [I
poae8 other than tron8portation, (4) th8 oil ~88 rtored for pUrpO8e8 Other th8n tIW8pOl'tPtiOn 8wh 88 reparation, Fedi8- tribution, oonaumption, sale, etc.
If any portion oi the oil det8rmined to be in at th8 OUt88t MI) held or delayed la rtor8ge for a traIl8i.t period of tlm8 entirely dirproportionBt8 to the urual p8riods in whiah oil l-188 been previously held without 8011~ rub8tential rea8on therefor, it 8hould be aormidered to haw aoqulmd ritua for t8Xi3tiOn in the 8ohool dirtrlat. !#8 pO88On fOr 8~ dblay should ooooern 8triotly the trannportstlon of' the oil 8uoh a8 break-down8 or oOng88ted CNIffia.
It ir hoped th8t the above asp serve you in deter-
mfnlng the taxability OS th,e oil in the lnrtant aa8e by th8 8ahOol dirtriot. If' it rhorild not, it i8 8IAgge8ted that a statement by the arolpany together with Saotr pertinent to the above be aubtnltted aonslderatlon. for further
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