Untitled Texas Attorney General Opinion

THE AXTORNEY GENERAJ,
OF 7rJzxAs
AUSTIN. TEXAEI
W37ll
August 15, 1974
The Honorable J. E. Blackburn OpinionNo. H- 370
Hansford County Attorney
Box 38 Re: Proper method of taxing
Spearman, Texas 79081 water pump and irrigation
casing when placed ‘in a water
well.
Dear Mr. Blackburn:
You have requested our opinion as to the proper, method of taxing
a water pump and irrigation casing which a taxpayer in your county has’
placed in a water well located in his property. In assessing the value
of the taxpayer’s land in order to collect ad valorem property taxes, the
county has taken into account the increase in the land’e value produced
by the addition,of the well. In addition, the county proposes to tax both
the pump and the casing separately aa personal property. The !taxpayer.
has obje,cted to this method of taxation on the ground that it constitutes
double taxation, and you have referred the matter to this office for an
opinion.
Except as expressly exempted, all property, real, personal, or,.
mixed, is subject to taxation. Article 7145, V. T. C. S. For tax purposes
real property is defined in Art. 7146, V. T. C.S., as follows:
Real property for the purpose of taxation, shall
be construed to include the land itself, whether laid
out in town lots or otherwise, and all buildings, structures
and improvements, or other fixtures of whatsoever kind
thereon. . . .
p. 1738 :
:
I, . .
The Honorable J. E. Blackburn page 2 (H-.370)
Personal property is defined in Art. 7147, V. T. C. S., to include:
Pereonal property, for the purposes of taxation,
shall be construed to include all goods, chattels and
effects~. . . .
Under Art. 7146, then, the existence of fixtures and other improvk-
ments on a taxpayer’s land should be considered. by tax assessors inn .
determining the value of that land. Their value should be included in the
value assigned to the realty. They are not to be taxed separately’as : ’
personal property. If the water pump and casing about which you ar,e
concerned are in fact fixtures, then it would be improper for the county
to tax them separately as personalty. Instead they should be taken intd
account in assigning a value to the taxpayer’s realty and taxed as part
of that, realty.
Generally a fixture is something that is personal in nature but’s0
annexed to realty as to have become a part of it. 25 Tex. Jur. .2d, Fixtures,.
§l p. 393. The test to be used in determining whether .a particular article
or structure is a fixture was set out in the leading case of Hutchins V.
‘Masterson & Street, 46 Tex. 551 (1877) as follows:
1st. Has there been a real or constructive
annexation of the article in question to the realty?
2nd. Was there a fitness or adaptation of such
article to the uses or purposes of the realty with
which it is connected?
3d. Whether or not it was the intention of the
party making the annexation that the chattel should
become a permanent accession to the freehold? --
this intention being inferable from the nature of the artiole,
the relation and situation of the parties interested, the
policy of the law in respect thereto, the mode of
p. 1739
The Honorable J. E. Blackburn page 3 (H- 370)
annexation, and purpose or use for which the
annexation is made.
And of these three tests, pre-eminence is
to be given to the question of intention to make
the article a permanent accession to the freehold,
while the others are chiefly of value as evidence
as to this intention . . . . Hutchins, supra at 554.
This test has been reaffirmed and applied both by the courts and by this
office on numerous occasions. Ruby v. Cambridge Mutual Fire Insurance
co.. 358 S.W.2d 943 (Tex. Civ. App., Dallas 1962, no writ); Shugart v.
Nocona Independent School District, 288 S.W.2d 243 (Tex. Civ. App.,
Ft. Worth 1956, no writ); Maro Co. v. State, 168 S.W.2d 510 (Tex. Civ.
APP.. Amarillo 1943, writ ref.); Bantuelle v. Chapman, 256 S.W. 936
(Tex. Civ. App., Texarkana 1923, no writ); and Attorney General Opinion
O-5268 (1943).
Thus resolution of the question of whether or not certain property
is a fixture depends on the circumstances surrounding its placement on
the land with particular emphasis being accorded to the intention of. the
party, or parties, who has placed it there. Since the same article or
structure may in one set of circumstances be considered ,realty and in
another be considered personalty, no categorical rules applicable to
particular properties can be stated.
There have been several cases in which the question before the
court was whether equipment such as pumps and casing were fixtures.
For instance, in Maro Co. v. State, supra, the holder of an oil and gas
lease had brought casing, rods, tanks, pumps, etc., onto the property in
order to engage in drilling with the full intention of removing the equipment ~. ,
as soon as production became unprofitable or inconvenient. In these
circumstances the court ruled that the equipment was personalty. See
also Shugart v. Nocona Independent School District, supra.
p. 1740
1
The Honorable J. E. Blackburn page 4 (H-370).
Similarly where pumps and casing were installed pursuant to an
agreement between the buyer and seller that they would remain personalty
subject to a chattel mortgage, the court found that they were personal
property and not fixtures even though they were solidly fastened to the land.
Morris v. Biggs & Co., 165 S.W.2d 915 (Tex. Civ. App., Amarillo 1942,
writ dism.) and Texas Power and Light Co. v, Malone, 42 S.W.2d 845
(Tex. Civ. App., Amarillo 1931, writ dism.). On the other hand where
water pumps and casing were installed in order to improve the productivity,
of the land and there was no indication that the equipment was not intended
to become a permanent part of the realty, courts have concluded that such
equipment was a fixture. First State and Savings Bank v. Oliver, 198 P.
920 (Ore. 1921); See Attorney General -. Opinion O-5268 (1943) and cases
cited therein.
These cases plainly indicate that no categorical rule can be fashioned
for determining whether water pumps and casing are fixtures. If it can
readily be inferred from the circumstances surrounding their installation ’
that the owner intended them to become a permanent part of the realty, then
they are fixtures. If, However, the taxpayer has installed them only for,
temporary use fully intending to~remove them whFnever convenient, then
they must be considered personalty. :
The answer to your question depends upon whether or not the
taxpayer’s water pump and casing are determined to be fixtures. If
they are, then under Art. 7146 they must be taxed as part of the realty..
The value they add to the taxpayer’s land should be taken into account in
assessing its value, and they cannot be taxed separately as personalty.
On the other hand if they are determined to be personalty, then they can
be taxed separately, but their value could not also be included in the
value ‘assigned to the taxpayer’s realty.
SUMMARY
Under Art. 7146, V. T. C. S., fixtures and other
improvements should be taxed as part of the taxpayer’s
p. 1741
The Honorable J. E. Blackburn page 5 (H-370)
real property. Their value should be taken into
account in assigning a value to the taxpayer’s realty,
and they cannot then be taxed again separately as
personal property.
Whether a water pump and irrigation casing are
fixtures depends on the facts of the particular case.
Very truly yours,
Attorney General of Texas
LARRYY. Y RK, Fir t Assfstant
T?J.-\L
w-
DAVID M. K:ENDALL, Chairman
Opinion Committee
p. 1742