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 aonin 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 

IlErto rtore OPudO Oil and 

Apmtofttmtmk 

uaodbythoa0a&WytostonWude 

lat., .19'&5 company 'A‘ reported bvln& 

or bnrrels Or amde oil In otorwe 

rrohool distriot, subject to be rendePud 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 ditrert?Rce~ they stated that a pert 0r ths Oil vhloh vas 

iR StOl’Wge 8t Lulli-@ dFd not hem '8ltuS' il3 th. LuliW 

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 Indqmdeat 96ho42 MaWLot?" 

Without mom details regarding tha atOm@ of thy 

oil In question, a deflulta aneva~ to the quest&ma p~aaatad 

is difficult. The l takmantbytbo aompanytbattba l Itw of 

tb* 011 in quaatlon vaa not Fn tba soboo% diatfiot is a ocwluaion vlth whiob, In ths l ba*noe of knav1od&m of tba t*ata ou 

vbIubauPhocmluaionvaa baaed,neltberaonourmnoe nordlaagraamant la peaslble. HOU*WOC, e dIaquI*itlon Of tbs pmx~iplma 

hare tn~olv~dnpgaervatoa~awr tha queatiom ga~mallytithout 

tllb l ub nfa a iof o n 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 

p~imfpiail tbat pwowl mperty ban its legrtz aitua at tha ploae 

cb its wner'II dolgci10 r&a a governed the taxationof tSn@blS 

r 

rrOnSlproparty. Although the Coartitutlan of 'hxaa (ArtIule 

, Seotlon 11) pZWidS8 tbSt "all PrOpartY, VhSthSr ~vn~d by 

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 67 9. W. 2d) 

3%; 8. c. is 2.. F. Ry. co. 0. cl* of Dallas, 14 s. u. (26 2921 
Ho&* Fred L. Bluz?Mll, Peg;0 3 

0-t g~~pqu& IUS. 00. .v. city uf Austin, 243 91 v. 778; 

city ,& mfmtm Y. liadea, 2ll Be w. 766~ Parri* v. KlmblS, 

12 a. w. 6%). 'phia inu zwatiet;, is aeld also to apply to 

Apt;al@ 7153, Revised clfvi "pStatuEaa 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 a 0a a tn e6 tha *omty ulmse it 

ir SitUSUd1 Snd ell pesamal propert , subjoe to 

trXationendteu&mmrl~yx'elO*dd frtm haStaM 0 ,.,i t 

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 

eroeptiwa and iteppeeravell l ottlodthatteryLibl* pwaaul 

prrp g y dw~8~ubo a l ltua fa ruxatiar , 81 p vlmrt0 a n b & 

(OSlolsStOti Y* l8Sdea, a\rpn, rad 51 ti. JUP. 

SW. 451, p. 466;. It l.a u&d that the l ltw of tenglble personal pmpea-ty~depawla on #a otmsaetw oi sa wo (0.~. & 8.~. 

Ry.Co. v. CltyofDallaa,aupn)ardtbmtthe teatiavbmn 

or no t ‘tha ppq etp is l ltuatad titb lttk ~ jwladiatfw a m,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 juriadtitiou (Fort With Y. Swthl4nd Licma, l 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 

Jr., In+%? 

ati dumtioa of tha belay (51 Am. 

Sac. 45Sr mupro; Awe. 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 aongeated 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 

berlend Pipe Line Co. v. Commonveelth, 79 9. W. 2nd. 3 % 6). 

(CumOn 

the other hand, 011 shipped from one jurisdlation to e aeoond 

where it was to be l 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 eaatem states but removed from tha oars in an intermediate state 

for the purpose of olaaalfloation and saoklng aoqulred taxable 

Bitw in the lntermedlate state (Baoon Y. Illlnola, 277 u. 9. 

504). In this lest Oaae the ovnerahlp or the grain and the 

right to dlapoae of it or divert its shipment in the lntermedlate State we8 oonsldered a material f8at.w. 

The duration of the ~dalay should baer a dlraot relation to prevloua pract&oea and the usual oourae d the bualneaa 

under oonalderation. f t ham been maid that permananoy of 1ocStlon 

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 

"g 

lated em "permanent for the time being*. (51 

Am. Jur., 900. 454 . 

From the foregoing, it Fa apparent that the taxabilIty, 

or taxable altua of the oil in question oannot be properly determined 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 outset) 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 

in transit and not taxable. Pro is tlve OS ita being In transit 

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, 
Hon. Fred L. Blundell, Page 5 

(3) the Oompany'8 only Interest in the Oil wa8 its tran8portation, (4) the owuer8hip of th8 oil rent&3 in ram other firm 

or peMon, (5) the 0 

T 

ng wa8 obligated to deliwr it to a 

deflnlte deatlnetlon, 6) the oomp~ny hsd no right to divert 

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, 

[I 

2 the tank8 used wer8 not a p8rt of the pip8 line 

8y8teIU, 3 the storage MI ill tank8 generally u8ed for purpoae8 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 

traIl8i.t at th8 OUt88t MI) held or delayed la rtor8ge for a 

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 determfnlng 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 for further aonslderatlon. 

JL rfb