EA MNEY GENERAL XAS

CWAWPORD c.MAIRTlN AUSTIN,TEXAR 78711 .aT-roRNEYCaENIFRAL October5,1970

HonorableTed Butler Opinion No.M-701 Criminal DistrictAttorney Bexar County,Texas Re: The imposition of'ad valorem San Antonio, Texas tax under Article 7146, V.C.S. as amended, uponmobile homes or trailers,which are owned by nonresident servicemen and are temporarily situated withInTexas ,uponproperty Dear Mr. Butler: not owned by the nonresident.
Your request for an opinionposes the following question:

. . 1 does your Opinion No. Ww-742 still remaiq effect,ive

or with the Amendment to Article 7146, V.A.T.S., do you have another'~"I opinion?', : : Article 7146,:Vernon's Civil Statutes, as amended by Acts 1969, 61st Leg., eff.' September,

1, 1969, reads'as foll.ows: "Realproperty 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 lmprovements, or other fixtures of whatsoever kind thereon, and all the rights and privlleges belonging or in anywise appertaining'thereto, and all mines, minerals, quarries and fossils in and under the same, and forms of housing .' adaptabae to motlvatlon'by a p.owerconnected. thereto commonly called 'trallers.',or ~krabile homes,' which are or can be used for resideritialp business, commercial, or office purposes.,except those located within the boundaries of an assessing unit for less than 60 days or unoccupied and for sale. The value of any trailer ormobile home shall not be included in the assessment of the land on which It is located, unless both the

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HonorableTed Butler, Page 2,: ~. (M-701)

land and the trailer or mobile home are owned by the sameperson. If the owner of the trailer or mobile home is not the owner of the.land, the trailer or mobile home 'shall be rendered for taxation separately from the land and taxes assessed shall be.a liability of the owner of the trailer ormobile home, and not a liability of the landowner. Land on which a trailer or mobile home is located shall not be subject to execution for the collection of taxes assessed against a trailer or mobile home ,.: unless both are owned by the sameperson.% "'," .: Opinion No. WW-742 (1959),dealtwith the question of whether a house trailer owned~ by a nonresident serviceman could be considered real property and subject to ad valorem taxation if it was situated on a plot of land owned by the nonresident serviceman,who did not intend that the house trailer shouldbecome a permanent part of the land,but merely his,temporary residence duringhis period of duty in the .State. of Texas. In that opinion this office determinedby the use of Texas case law criteria defining real property that the trailer remained personalty inasmuch as the party annexing the trailer to the lot did not intend that It become a permanent accession to the freehold. Further, the trailer was determinednontaxable under the Soldiers and Sailors' Relief Act, 50 USC App 574, which read and still x5rlows: reads, 121 ,1?%,?% .a?

. : "Forthe purposes of taxation in respect of the ~personalproperty~.
. . of any such person (a serviceman)by any State
. . .,ofwhich such person is not a resident or inwhich he is not dcnniciled

. . .personal property shall not be deemed to be ldcated orpresent in or have a situs for taxation in such 'state.i s ." Article 7146, Vernon's Civil Statutes, before its amendment in 196g'and at the time Opinion No'W-742 

### was issued, provided: ._

“Realproperty for the purpose of taxation,‘. shall be construed to include the land itself, whether laid out in town lots~or otherwise, and all buildings, structuresand improve'- ments, or other fixtures of whatsoever kind

-3388-HonorableTed Butler, Page 3,(M-701) " _, thereon, and all the rights and privileges belonging or in any wise appertaining thereto, and all mines, minerals, quarries and fossils in and under the same.' Thus, mobile homes or trailerswere not specifically defined as real property under Article 7146, Vernon's Civil Statutes,~untilthisArticle was amended on September 1, 1969. ,Beforethis date, as was done in Opln,lonWW-742, it was necessary to apply the case law rules of fixtures .todetermine:., whether property was realty or personalty within the meaning ofArticle 7146, However, once the amendmentbecame effective on the date heretoforementioned, mobile homes ~or,t~railers became real orooertv for ad valorem tax ourooses and were~no lonaer subie;t 'to mketing the definition*set forth in case e Hurt v. $oope~r,110 S.W.2d 896 (Tex.Sup. authorities 1937): "Thk si%&e having def cerned M ?i?ied the word,'we are not'conrithits usual meaning.'! Gifford-Hill & Co. v." State of Texas

i,442 S.W.2d 320 (Tex.Sup.1969): "In imposing the sales ta

nix .fromwhich this litigation arose the Legislature has specifically defined the term 'sale.' This definition is binding on the courts in an interpretationof thisArticle.")
In New York Mobile HomesAssociatIon v. Steckel. 9 N.Y.2d z53ip;15N.Y.S.2d 487, 175 N.E.2d 151 816 A.L.R,2d 270.(N.Y. Ct. * 1961), the New York Court uph&d an ad valorem vision defining the terms "lands9" 'realestateg," and tax pro- "real property" as "forms‘ofhousing adaptable to motivation by a power connected thereto, commonly called 'trailers@or !mobile homes,' which are or can be used for residential,business, commercial or officepurposes, except those (1) locatedwithin the boundaries of an assessing unit for less than 60 days D o
-’ The Court determined the trailers or mobile homes were used as residences,that they remained stationary, that their water supply came from tubing attached to an outlet in the ground, that they were connected to the tark sewage system and that they were set on blocks so that m 0 0 there is a rational basis for the legislative classification a 0 *",ofmobile homes or trailers as realproperty.
It is, therefore, apparent thatArticle 7146, Vernon's Civil Statutes, as amended9 has changed Opinion WW-742, unless thisArticle as emended conflicts or interfereswith 50 USC App. 574, Soldiers and Sailors'ReliefAct, in which case the "SupremacyClause" rule as itvree v. Bland, 82 s.ct. 1089, 369 u-s, 663 (1962)would apply. The United

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Ted Butler, Page &,(M-701)~

States Supreme Court in Free v. Bland, supra,held that a ~. Texas statutory enactment conflictedwith a United States Treasury Regulation. Inmaking this determination,the, Courtpronounced the "SupremacyClause" rule:'

II

. . . The relative Importance to the State of 'Its own law is not material when the~reis a conflictwith a valid federal law, for the,Framers of our Constitutionprovided~that the federal law must prevail. ,Artidle'VI,,,Ciaus'e,~2a'~:'This principle was made clearby Chief Justice.,: Marshall when he stated' for the Court that:&iy' state law, however clearlywithin a State'.s '.'.~, acknowledgedpower, which interfereswith or' is contrary to federal law,must yield,"
In reachingan opinion on whether there is a conflict,. between'state and federal law in this 'situation,'the hist'ory of state taxation of nonresident servicemenunder the Soldiers and Sailors'ReliefAct, supra,must be reviewed. Four important United States Supreme Court decisionsunder the above mentionedAct are Dameron v. Brodhead,,345U.S. v. Busard 3 v. Neal, 382 U.S. ~9~8~‘~:&!?fi85 States, 895U.S. 169,.89 S.Ct.
A Coloradopersonalproperty ad valorem tax imposed on property of a nonresidentAir Force officer was held.invalid, in Demeron v. Brodhead, supra. In reaching its decision; the couwoldiers and Sailors' Relief Act stated:

. . . For this statutemerely states that the taxable domicile of servicemen'shallnot be changedby military assignment. This we think is within the federalpower.

. . . There is no suggestion that the state of original residencemust.have imposed a'property tax. O
. . Congress appears to have chosen the broader technique of the statute carefully; freeing servicemen from both income and property taxes imposedby any state by virtue of their presence there as a result of military orders. It saved the sole right of taxation to the state of original residencewhether or not that state exercised the right. O s .

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Honorable'TedButler, Page 5,(M- 701)

I, We reject the argument that the word ;deemed'as used implies a rebuttable presumption as to permit taxation in the state of temporarypresence in some cases." The court in California v, Buzard, supras struck down a California "licensefee" imposed uoon a nonresident serviceman, who attempted to registerhis-motor vehicle in that state. The court held that California could collect the tax under the soldiers and Sailors'Relief Act only if it was a "license, fee. or excise" on the motor veh iicleand. that since the purpose of the CaliforniaAct was for general revenue? it dfd not meet the test of being a "license,fee, or excise, ' The Court stated:

It.0 The very purpose of #574 in broadly

freeing the nonresident serviceman from'the obligation to pay property and income taxes was to relieve him of the burden of supporting the governments of the States where he was present solely in compliancewith military orders. e D *" The authority of a state to levy personal property ad valorem taxes on a nonresident serviceman'shouse trailerunder the Soldiers and Sailors1Relief Act was determined in Sna Neal, supra. ----F&

The servicemanhad not registered or lfcense trailer or paid,any taxes on itin his home state, The,Court held therein:

"Thisa companion case to California v. Buzard. e D 0 We reverse on the authority of our holding today in Buzard that the failure to pay the motor vehicle 'license,fee, or excise' of the home State entitles the host State only to exactmotor vehicle taxes qualifying as 'licenses,fees, or excises,s the ad valorem tax, as the Mississippi Supreme Court acknowledged, is not such an exactfon. 0 D 0
A Sales and Use Tax on a nonresi'dentservicemanwas upheld In Sullivan v, United States, supra, as not being within the coverage of the A t

c 0 The following quotation reflects:

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Honorable Ted Butler, Page 6,(M- 7Oi)'

'Section 574 does not relieve servicemen stationed away fromhome from all taxes:of the host State. It was enactedwith the much narrower design 't prevent multiple State taxation~ofthe pFoperty.1'And the:.~ substantialrisk of double taxatkon:un$er::~' multi-state ad valoremproperty taxes' does~ not existwith respect to sales and use taxes.
. . ." (Emphasisadded.) Thus, it is apparent that State ad valoreni taxes.. onper- : sonalproperty of nonresidentmilitary personnel will not be upheld inasmuch as they violate the Soldiers and Sailors' Relief Act, supra. The case of United States v. Chester CountvBoard ofAssessment and.Revisio Supp. 1001 (E.D. longing.tononresldentservice- "Real Estate" as ":
. .house property taxes on house trailen men. The PennsylvaniaAct defined trailers and mobile homes permanently attached to land or connectedwith water, gas, electric or sewage facilities,,.,

. '.."
In reviewing this provision, the Court .determined:

11..,. "The salutorypurpose of the.federal act [Soldiersand Sailors' ReliefAct] is to relieve nonresident servicemen of the burden of supporting state and local governments, whenever their presence results solely from compliancewith military orders.

11

. . . . "In effect; ,byappropriate exercises of its, % taxingpowers, Pennsylvaniahas givenan. artificial, statutory real property designation to a specific class of house trailers which. otherwise, still retain the basic characteristicof tangible personal property,' namely,mobility.
"We conclude that this statute, intended to raise revenue for the ooeration of local governmentswithin the &ate,.as sought to be applied to the personal property,of.non-

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Ted Butler,, Page 7,(M- 701)

resident servicemen in active service under military orders, is in irreconcflable conflictwith the clearly defined Congressionalpurpose of #574 fn broadiy freeing the nonresident servicemen from~ the obligation to pay property and income taxes.
. . .

Thus, under federal case law authority, a state cannot through statutory enactment change the nature of property and tax that property when it was prohibited by federal law from taxing the property in its original nature. To state the rule more simply, a State cannot tax indirectlywhat It is prohibited by federal law from taxing directly. To apply a real property ad valorem tax to the property in question would result in a pyramiding of taxes, because the State of the servicemen's domicilewould still have the right to levy an ad valorem tax on the same.property. As stated in the ca,ses he,reinabpveU. cited, the purpose of the Soldiers and Sailors'Relfef Act Is to remedy this situation.
On the basis of this reasoning, it is concluded that the "SupremacyClause" of the United States Constitutfonprohibits the application of Article 7146 to the factual sftuatfon in auestlon inasmuchas thisArticle interfereswith 50 U,S,C. App. 574, Soldiers and Sailors'Relief Act,~ and mustyield to the provisions of thatAct. We are of the opfnfon thatmobfle homes or trailers of nonresident servfcemenare not subject to ad valorem taxation.

SUMMARY

Article 7146, V.C,S,, definingmobile homes or trailers as real property for ad valorem tax purposesmust yield to the provisions of 50 U.S.C,App. 57b9 Soldiers

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and Sailors' ReliefAct, by virtue of th "SupremacyCl " of the United Stztes Constituti%~e*rtiele VI, Clause 2. Thus;'mobilehomes or trailers owned by nonresident ject to ad'valorem taxation.

of Texas Prepared by Harriet D. Burke Assistant At,torney General Atto

lT ey General

APPROVED: OPINION COMMITTEE
Kerns Taylor, Chairman W. E. Allen, Co-Chairman S, J. Arenson R. D, Green Jack Sparks John Reese
MEADE F. GRIFFIN Staff Legal Assistant
ALFRED WALKER ExecutiveAssistant ' NOLA WRITE FirstAssistant

,