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 

### inrtomge vlthout

5, 1945, you lmvv **reqrueted** to the 

### abovembjeat. 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 IadepmxdsntSchool 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 

### deflultaaneva~to the quest&ma 

### p~aaatad is difficult. 

### The

l takmantbytbo aompanytbattba l Itw of tb* 011 in quaatlonvaa 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 tllbl ubnfa aion

of furthar detailed ~aota. 

### Assumingthat 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.mef "mobIl$aaequuntuc~raorma" (srmblea follcw the poraon) or ths p~imfpiail tbat pwowl mperty ban its legrtzaitua at tha ploae cb its wner'II dolgci10r&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 aorporationrshell ba iha8seaed fan teXMlan, a@ t@aes paid tn the aountyvbwa 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

evldSntlgnmarlt

propS??ty

VhSro aitusted tar thS purposes of te%StiOR 

### underthe B*IUW51 pPiW~)3~88 of lav am thsn un&0r*tood.” (city ofport Worth Y. southlandGa’ephoundLlnea 67 9. W. 2d) 3%; 8. c. is2..

F. Ry. co. 0. cl* of Dallas, 14 s. u. (26 2921Ho&* Fred L. Bluz?Mll, Peg;03

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%). 'phiainu zwatiet;, is aeld also to apply to Apt;al@ 7153, Revised clfvi StatuEaa Op lba*, a* ACED *f+ "p 

### pow owlOwnt to 

### theSbovr, Owmmm.anal pmmlalaa (me0 

### OS*** aupm ),vhich provtdra :

"All

### pmmFW. awe1 and pam+anl, exoept much am ianqulrvd tok1iakdrndea#*aedothania*, @Ml1 ba 

### llatedend la a0a ae6 tn 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 prrpg ydw~8~ubo al



## ltuafar, 

## uxatiar81pvlmr0 tan b& 

### (OSlolsStOti

Y* **l8Sdea,** a\rpn, **rad** 51 ti. 

### JUP. SW. 451, p. 466;. It l.a **u&d** that the lltw of tenglblepersonal pmpea-ty~depawla on #a otmsaetw oi sa wo (0.~.& 8.~. Ry.Co. 

### v. CltyofDallaa,aupn)ardtbmtthe teatiavbmn ornot‘thappqetp is lltuatad titblt~ tk jwladiatfw am,y $a-a~~ie~,peofit thwe. (51k. Jur., sec. 454, p. 469 lti

.

tha ovne~*mdcunlclle doar not aoqulre taabla aitua in 

### awb juria

### dtitiou (FortWith 

### Y. Swthl4nd Licma,l 

### uprefiFSTCISt. 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 (51Am. 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 ItsHoh.'Fred L. Blundell, Page 4

tranapOrt&iOn, situs la acquired In the juriadlotionwhere 

### itvaa 

### 80detained. 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). % (Cum

### On the other hand, 011 shipped from one jurisdlationto e aeoond where it was to be 

### l eparatad and processed end then shipped to a third jurlsdlatlonvea held to 

### eaquiraaltua in the reoond jurimdiotlonalnce 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 olaaalfloationand saoklng aoqulred taxable **Bitw** in the lntermedlate state (BaoonY. 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~dalayshould baer a dlraot relation to prevloua pract&oea and the usual oourae d the bualneaa under oonalderation. ft 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 (QrlggabyConat. Co. v. **Fraawg,** 32 Se. 399). The concept of permanenoy in this ragSrd is variable and onavrlter (oonf'ounded

by the Imperfection of words) deaarlbad the location ofproperty oonte "glated em "permanentfor 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 shouldbe oonsldered in transit and not taxable. is Pro tlve OS ita being In transit are such considerationsas that (1) the tanks in which it we8 storedwere an Integralpart of the pipe line trana ortetioa system and vere 80 rendered for tax p~osea, (2) tie use of the tanksvaa 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 Oilwa8 its tran8portation, (4) the owuer8hip of th8 oil rent&3 in ram other firm or peMon, (5) the 0T 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 tratyportationrhohld be oon8ldered to haw aoquired 8ltu8 in the rohool

### dietrlct and, therefore, taxable. Probatiw o? 8uoh acquirition of situ8 8re ruoh coxmideratlon8 618that (1) the oompauy oumd the oil and 

### had the right to ume it ior any purpo8e it might choose, [I

2 the tank8 usedwer8 not a p8rt of the pip8 line 8y8teIU, 3 the storage MI illtank8 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 urualp8riods 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,eoil in the lnrtant aa8e by th8 8ahOol dirtriot. If'it rhorild not, it i8 8IAgge8ted that a statementby the arolpany togetherwith Saotr pertinent to the above **be aubtnltted**  **for further**  aonslderatlon.

JL rfb