Title: Mesa Leasing Limited v. City of Burlington

State: vermont

Issuer: Vermont Supreme Court

Document:

Mesa Leasing Limited v. City of Burlington (98-037); 169 Vt. 93; 730 A.2d 1102

[Filed 19-Feb-1999]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal  revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter  of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any  errors in order that corrections may be made before this opinion goes
  to press.

                                 No. 98-037

Mesa Leasing Limited	                         Supreme Court

                                                 On Appeal from
     v.		                                 Chittenden Superior Court

City of Burlington	                         January Term, 1999

Linda Levitt, J.

       Joseph F. Obuchowski of Roesler, Whittlesey, Meekings & Amidon,
  Burlington, for Plaintiff-Appellant

       Kenneth A. Schatz and Kimberlee J. Sturtevant, Office of the City
  Attorney, Burlington, for  Defendant-Appellee

PRESENT:  Amestoy, C.J., Morse, Johnson and Skoglund, JJ.

       MORSE, J.   The owner of a commercial excursion vessel operating out
  of the City of  Burlington appeals the superior court's determination that
  the City had the authority to impose a  personal property tax upon the
  vessel for years in which it was not physically present in  Burlington on
  April 1, the statutory day of assessment.  We conclude that the vessel had
  a tax  situs in Burlington for the years in question, and thus affirm the
  superior court's judgment.

       The facts are not in dispute.  The subject property is the Spirit of
  Ethan Allen II, a cruise  vessel that operates on Lake Champlain from April
  to November out of the Burlington Community  Boathouse.  The vessel's
  owner, Mesa Leasing Limited, leases the vessel to Green Mountain Boat 
  Lines Limited.  The principal shareholders of both corporations are the
  same two persons.

       The Spirit of Ethan Allen II arrived in Burlington on April 2 for the
  1995 sailing season,  which ended in November of that year.  The vessel
  returned to Burlington on April 4, 1996 for 

 

  the 1996 sailing season.  During the periods that the vessel was not in
  operation out of Burlington,  it was being stored in the Town of Shelburne
  Shipyard.  In addition to paying personal property  taxes, Green Mountain
  paid the City $8,800 per year in 1995 and 1996 for the right to dock the 
  vessel in Burlington.  No town other than Burlington has imposed personal
  property taxes on the  vessel.

       The issue is whether the City had the authority to impose a personal
  property tax on the  Spirit of Ethan Allen II for years in which the vessel
  was not physically located in Burlington on  April 1.  Vessels used for
  income producing purposes may be taxed as personal property in  accordance
  with 32 V.S.A. § 3691.  See 32 V.S.A. § 3692.  Under the general rule set
  forth in  § 3691, taxable tangible personal property "shall be set in the
  list to the last owner thereof on  April 1 in each year, in the town . . .
  where such property is situated."  In response to the parties'  opposing
  summary judgment motions, the superior court ruled that April 1 is the date
  for  establishing ownership, not the location of the property, and that
  because the income generating  use of the Spirit of Ethan Allen II is in
  Burlington, Burlington is the permanent situs for tax  purposes.

       On appeal, Mesa Leasing argues that because the Spirit of Ethan Allen
  II was not  physically located in Burlington on April 1 for the years in
  question, the City had no authority  under § 3691 to impose a personal
  property tax.  On the other side, the City reiterates the superior  court's
  conclusion that Burlington is the place from which the income producing
  vessel operates  and thus the tax situs for purposes of §§ 3691-3692.

       We agree with the superior court that § 3691 does not preclude a town
  from imposing a  personal property tax upon property not physically located
  in that town on April 1.  April 1 is  merely the day of assessment, an
  arbitrary day from which towns commence the process of  determining which
  properties will be taxed at what value.  See 32 V.S.A. § 4001(a) (on April
  1,  state shall furnish towns inventory forms requiring taxpayers to list
  all taxable real and personal  property); 32 V.S.A. § 4041 (on April 1,
  listers shall proceed to take up such inventories 

 

  and examine property that they are required to appraise); 32 V.S.A. § 4044
  (taxable personal  estate shall be appraised at its fair market value on
  April 1).  Inclusion of the April 1 assessment  day in § 3691 does not
  suggest that personal property may be taxed only by towns in which the 
  property is physically located on that particular day.  See Buchanan County
  v. State Tax Comm'n,  407 S.W.2d 910, 914 (Mo. 1966) (statute providing
  that personal property shall be taxed in  county where property is
  "situated" on stated day "is not the same as providing that the property 
  shall be taxable where `physically present' on that day").  Construing the
  statute in such a manner  would defeat its purpose by allowing owners to
  remove their property from the taxing jurisdiction  for a brief period to
  avoid the tax.  See Braun v. Board of Dental Examiners, 167 Vt. 110, 117,