Honorable W. E. Coats, Jr.

Criminal District Attorney Opinion NO. (C-432) Smith County Tyler, Texaa Dear Mr. Coats: In your letter office on the above of your letter. Re: Situs of U-Haul trailers for the purpose of ad valorem taxation, under the stated facts. you have requested an opinion from this mbject. Wequote pertinent paragraphs

“Rental trailers ownedbythe Arcoa Inc. of Portland, Oregon, commonlyknownas U-Haul Trailers are available for hire in most all counties of this state as well as other states. TheprlncipA1 place of business In Texas Is GrandPrairie, Dallas County, Texas. In the course of business of renting these trailers, the trailers are rented In one county andmay or maynot be returned to the renting establishment In that county. TheU-Haul CompanyIs not involved in the dispute. Theywill pay their taxes. Wehe trying to determine to whom.

“Dallas County authorities, Mr. Jerry D. Brownlow, City Attorney for GrandPrairie, Texas, relying on the enclosed opinion written by the Dallas CountyDistrict Attorney’s office, seeks to tat all U-Haul‘trailers located In the State .ofTexafind have the U-Haul Companypay all Its ad valorem taxes to Dallas County.

“This office and Smith County authorltl& seek to tax only the numberof U-Haul trailers within Smith County, as of January 1, 1965, for the following reasons:

-2041-Honorable W. E. Coats, Jr., Page 2 Opinion HO. (c-432)

“(1) Thelatter‘part of Article 7153 of Vernon’s Texas Civil Statutes does not cover the situation in dispute because the trailers are not ‘temporarily removed’ from the Dallas Counv Manyof the trailers or most of them in Texas will never be in Dallas County and, even if the trailers were in Dallas County, but are removed, they are not temporarily remo~v&d

from Dallas County‘r;Eiut are removed with no prearranged plan for their return.

“(2) Thenumberof U-Haul Trailers located in Smith County Is almo$t constant. Dueto the nature of this business there murt slwayr be present In Smith County a required numberof trailers to meet the business demand. So, even if one specific trailer does, not remain In Smith County so as to obtain a
‘permanent statue’, a certain numberof trailers., do remain here all the time. City of Dallar v. Overton, 363 S.W.2d 821 (error ref. n.r.e. lgb?).” The Constitutional provision provldlng for the taxation of property is Article VIII, Section 11 of the Texas Conetltution. It states:

“All property, whether ownedby p&sons, or corporations @all be assessed for taxation, ax&the taxes paid Inthe county where eltuated,

. . .” (Emph&rls supplied throughout.) Thephrase “where situated” has been interpreted by,the Texas SupremeCourt to mean“where situated” under the common law rule of “mobllle sequuntur personam” andnot to mean
“where situated” physically or technically. Thecourt stated, in Great SouthebnLlfe Insurance Companyv. City of Austin, 112Tex. 1.m S.W. 77U (1922) :

“The Conrtltutlop was framed with reference to the commonlaw, andIn judging what the Constitution meansweghould keep In mindthat It Is not the beginning of the law of the state, but that it a8sumes the existence of a well-understood system, which was still to remain In force and be demonstrated, and that the constitutional deflnltions are ln general drawn from the commonlaw.

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.


### HonorableW.E. 

### Coats,Jr., Page 3 Opinion No. (C-432)

Hewitt v. State, 

### 25Tex. 

### 722,727;Gordonv.State, 43 Tex. 330, 340; Henderson v. Beaton, 52Tex 29, 60; 

### Exparte King,’ 35 Tex. 658. II

. . .

“Our Constitution, therefore, in declaring that property shall be taxed where situated, has done no

### morethan declare the common-lawrule.

“It did not define zwhat wasmeant by the words where situated. Since It had reference to the taxing power, It evidently meant property where situated for the purposes of taxation 

### underthe general principles of lawas then understood. ” The court then reviewed the common

### lawrule of “aobllia sequuntur personam” and stated:

“Under the commonlaw, mobilla sequuntur peraonamwas

### awe,ll-established maxim, and personal property of every description wastaxable only at the domicile of Its owner, regardless of Its actual location. This is still the basic principle uponwhich the taxation of personal property rests. 26 R.C.L. Section 241, pp. 273,274.” However, there are certain exceptions to the “mobilla sequuntur pc:rs.onRm”rule and the Texas Courts have approved these exceptions. TheTexas Sureme Court also stated In the Great Southern case, (suprap that:

“But even prior to the Revolution the principle

‘mobllla sequuntur personam’ hadbeen abrogated to the,extept that, as between different towns and taxing districts, certain classes of tangible personal property hada taxable situs where employed in business, regardless of the domicile of its owner.” p. 781.

-2043-Honorable W.E. Coats, Jr., Page 4 OPlnlon No. (CA32)

Amore recent decision reaffirming this exception Is State v. CrownCentral Petroleum Corporation, 242 S.W.2d 457 (Tex.Civ.App. 1951, err. ref.), wherein the Court ruled:

“Oneexception to the rule that tangible personal property Is on& taxable In the county of the residence of the o-r is that tangible personal property, which by It6 character and concrete Porm Is capable of having a value andan actual physical sltus, maybe taxed In the county where permanently

State v. Fidelity &Deposit Co. 

### of iE$t%, 35 Tex.Clv.App. 214, 80 S.W. 5d.” Also, in the 

### caseof the City of Dallas vs. Overton, 363 S.W.2d.821 (Tex.Civ.App. 1962, 

### err.ref. n.r.e.), the Court wrote:

“Tangible persona1 property acquires tax t3itU6 In ajurisdiction apart from its owner if It is kept there with sufficient permanency that It mayfairly be regarded as being a part of the general mass of property within the jurisdiction.” These exceptions have been recognized and propounded In the following cases and authorities: Galveston v. Haden, 214 S.W. 766 (Tex.Clv.App. 1919, no writ h? 283 S.W. 548 (Tex.Clv.App. 1926, no-writ hi&T Life Insurance v. City of Austin 108T. 209, 19 Cooley onTaxation, Vol. 2 4th Edition, p. 975 General’s Opinion Noa. V-3+3, O-5632, O-3702 a Thus, wesee that there is muchTexas authority for the proposition that tangible personal property which ha$ acquired an actual sltus of its ownIs to be taxed at the place of Its situs andnot at the domicile of its owner. In your opinion request, you state that a certain number of trailers remain in Smith County at all times; which la tantamount to a certain number

### being l ralgned,to aith-.COpnOJi~ and that whenthe trailers are rented, they “mayor maynot” be returned to Smith County.

-2044-Honorable W.E. Coats, Jr., Page 5 Opinion No. 

### (C- 432)

If all trailers which were rented in Smith Countywere returned to Smith County whenthe lessee had finished, then, unquestionably, all would be taxable in Smith County. Certainly, those trailers which are assigned to Smith County for business purposes~, rented there and returned there, would be taxable there under the exception to the "mobilia secuuntur personam" rule as recognized by the Texas Courts. Thefact that all of the specific trailers donot return to Smith County does not. preclude taxation by Smith County. That certain number which has been permanently assigned to Smith County by the corporation for business usage there, can and has attained a degree of permanency after that numberhas first been delivered to Smith County and after that numberIs shownto remain in Smith County for legitimate business purposes. Although trailers are large enough to be specifically identified, it should not be forgotten that they are also so similar as to be susceptible to treatment as funglble units, which Is exactly howthe corporation actually does treat them. Therefore, It is possible ~for taxatlnn purposes, that even though certain specific trailers donot remain in or return to Smith County, that that certain numberof trailers which have been permanently assigned to Smith County for legitimate business purposes andwhich have actually physically been in Smith County, have acquired anrctmal situs there. Thus, the U-Haul trailers are within the exception to the "mobllla sequuntur personam" rule and are taxable in Smith County. Anecessary element of this opinion Is the determination that the trailers have acquired 3 degree of permanency in Smith County, thereby establishing their taxable situ8 there. In theCity of Dallas v. Overton case, supra, the Court elsborated on the definition of "permanency";

"It Is clear that 'permanency' as used in this connection does not convey the idea of the characteristics of the permanency of real estate. It merely involved the concept of being associated with the general mass of property in the state, as contrasted with the transient status--viz., likelihood of being In one.state today and in another tomorrow.

. . .

-2045-Honorable W. E. Coats, Jr., Page 6 Opinion No. (C-432)

“Obviously the Courts donot construe the term

‘permanent’ to meanabsolutely permanent, since movable property is seldom absolutely permanent. The question of whether or not the property in question is 'more or less permanent’ as the term is often utilized, depends on the factual situation In each case as illustrated.

. . .’ (. The facts, as you have given, reflect that a certain numberof trailers are located within Smith County at all times by the corporation for business usage. That certain numberwhich have actually, physically been located in Smith County must nowbe regarded as being a part of the general mass of the property within that jurisdiction, and in accordance with the previously cited authorities, must have consequently acquired a taxable sltus in Smith County. There is no question but that somespecific trailers are in a transient status at all times in that they are likely to be in Smith County today and in another county tomorrow. However,.when the facts are considered as a whole, it must be rememberedthat those trailers which are removed from Smith County andare not returned have been or will be replaced by the company. Another factor for the determination that a certain numberof trailers have become a general mass of the property within Smith County is the fact that that certain numberof trailers will remain in Smith County when not in use. Smith County is their homebase. The fact that the Court, In the case of Fort Worth ‘v. Southland~Greyhound Lines, Inc., 123Tex. 13, b7 S.W.2d 354 (Tex.Civ.App. 1931, opinion approved by Tex.Com. of App. On Certified Guestions) refuted the average numbertheory does not conflict with our present determination, insofar as weare not advocating an average numberrule but are averring that that certain numberwhich has attained the necessary degree of “permanency” are taxable In Smith County. The finding that items of personal property can acquire a tax situs awayfrom the domicile of the owner, even though no specific items can be shownto have acquired a permanent

-2046-.

Honorable W.E. Coats, Jr., Page 

### 7 Opinion No. (C-432)

relation to the tax situ8 is not United Stats SupremeCourt held,

__. - _ ulthout authority. The

in the cnse 

### of Braniff Neoraska noara of Equalization ?%nses

### 7 US 5gC (lm that’regulariy 

### bcneduled f’nesl’thounh not necessarilv the sameindividual planes; were~sufficlent to establish a taxable nexus for the airplanes to acquire a tax situs in Nebraska. The principle was cited In Attorney General’s,Oplnion No. 

### w-818 and wasalso Implied from the fact situation as given In Attorney General’s Oplnion 

### V-373. In 

### V-373, the facts a-c given were that Halliburton Oil Well Cementing Company assigned two railroad cars to Hawkins, Texas, and thet the numberof

’cars there at any given time would fluctuate according to business needs. Our

### office ruled that the LO hopper cars were taxable in the city to which they had been assigned because they had acquired a business situ8 there for taxation purposes. At first glance, several Texas cases, Chemical Express v. Roscoe 

### 310 S.W. 

### 691 (Tex.Clv.App. 

### 1958, err. ref ) dFt &. Southland Greyhound, supra, might appear’to?e e conflict with this opinion but careful study reveals otherwise. In the former case, the Court held that the trucks and trailers of the corporation were not taxable In Hoscoe even though they were physically ln that city on the taxable d:ite:;. The Court’s opinion Is predicated upon the fact that noparticular numberof ,vehlcles were assigned to anyparticular terminal andthe location of vehicles awayfrom the home domicile depended exclusively upon business. In contrast, the facts of the present situation are that a certain number ,of trallers,ls assigned to Smith County at all timea and would remain there,even whenthey were not ln use. The Court concluded, In the Roscoe case, that the facts fell squarely within the holdings of the ca6es of Fort Worth v. Southland Greyhound Lines, Inc., supra, and Guln kailway Co. v. Dallas b S.W.2d 292 (Tex.Com.Apg-

_ the terms of Article 7151. Vernon’; ‘Civil Statutes. a& that XiX-3.F. 9291 and the properties were only temporarily removed from the city of the principal office or place of domicile. Our trailers are not temporarily removed from Dallas County, but as the facts indicate are permanently assigned to Smith County.



### -2047-Honorable W.E. Coats, Jr., Page 

### 8 Opinion No. (C-432)

As the Court 'very ably stated In the Overton case, supra: "A careful examination, of these authorities clearly reveals'distlnguishing features.

. . . In the Southland Greyhound and Chemical Express cases, the City wasattempting to tax motor ~vehicles that were only temporarily being kept wlthln its limits. The courts correctly held that such property having failed to acquire 'permanent' location apart from its owner, had its tax situs at the owner's domicile." Afinal exception to the commonlaw rule of "mobllla sequuntur personam" which must be considered Is the establlshment of a sltus for taxation purposes by leg'lslatlve enactment. There Is no specific legislation determining the taxable situs of trailers as there Is for the rolling stock of a railroad comoanv. Article 

### 7168. Vernon's Civil Statutes. In fact. the holding of the case of Gulf, Cand S.F. Railroad v. Dallas,- supra, Is diatlngulshable because there is specific legislation establishing the tax situs of all rolling stock of a railroad at Its home-office in Texas or place of domicile. Article 

### 7153, Vernon's Civil Statutes, is also relevant to the taxable 

### situsof per6olal property. It states that:

"All property; real and personal, except such as Is required to be listed and

### assessedotherwise, shall be listed and assessed In the county where,lt Is situated; **and** all personal property, subject to taxation and temporarlly'removed from the state or county, shall be listed andassessed In the county of the residence of the owner thereof, or in the county where the principal office of such owner 1s situated. p. 125 7." Acts 

### 1897, p. 2031 G.L. Vol. 10,
TheTexas Courts have held~that the meaning of "where it 1s situated" is the sameas "where situated" 

### InArticle VIII, Section 11, of the Texas Constitution. Fort Worthv. Southland Greyhound, supra; Gulf C. &S.F. Railway Co. v. Dallas, 

### supra;Great Southern Life Ins. Co. v. Austin, supra; 

### andlveston v.Haden,supra. This statute does not provide for anv excentlon to the "mobilla sesuuntur personam" rule or its exieptio;ls.

-2048-.

Honorable W.E. Coats, Jr., Page 9 Opinion No. (c-432)

As there is a taxable nexus between a certain numberof trailers assigned to Smith County andthat certain numberis actually sent to Smith County for legltlmate business purposes, then that numberof trailers have attained anactual business situs in Smith County and, therefore, under the recognized exceptions to the "mobllia sequuntur personam" rule, are taxable In Smith County.SUMMARY---e-mUnder the stated facts, the situs of a certain numberof U-Haul trailers, for the purpose of ad valorem taxation, is Smith County, Texas, the actual business situs of the trailers. Yours very truly, WAGGONER

CARR Attorney Generelof Texas

HG,Jr.:sjl APPROVED: OPINIONCOMMITTEE: W.V. Geppert, Chairman Paul Phy W.0. Shultz HenHarrison Stanton Stone APPROVED

FORTHEATTORNEY

GENERAL BY: HAWTHORNE

PHILLIPS

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