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IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
 

September 2017 Term FILED 

November 1, 2017 

released at 3:00 p.m. No. 16-0903 EDYTHE NASH GAISER, CLERK 

SUPREME COURT OF APPEALS 

OF WEST VIRGINIA 

PRATT & WHITNEY ENGINE SERVICES, 

Petitioner 

v. 

DALE W. STEAGER,
 

State Tax Commissioner of West Virginia,
 

Respondent
 

Appeal from the Circuit Court of Harrison County
 

The Honorable John Lewis Marks, Jr., Judge
 

Civil Action No. 15-P-68-1
 

AFFIRMED
 

Submitted: October 18, 2017 

Filed: November 1, 2017 

Herschel H. Rose, III, Esq. Patrick Morrisey, Esq.
 

Rose Law Office Attorney General
 

Charleston, West Virginia Sean Whelan, Esq.
 

Counsel for the Petitioner Assistant Attorney General
 

L. Wayne Williams, Esq. 

Assistant Attorney General 

Charleston, West Virginia 

Counsel for the Respondent 

JUSTICE KETCHUM delivered the Opinion of the Court.
 

CHIEF JUSTICE LOUGHRY dissents and reserves the right to file a dissenting Opinion.
 

JUSTICE WORKMAN dissents and reserves the right to file a dissenting Opinion.
 
 

 

 

 

 

 

 

 

 

SYLLABUS BY THE COURT 

1. “In cases where a taxpayer challenges an ad valorem tax 

assessment, a circuit court’s conclusions of law are reviewed by this Court de novo.” 

Syllabus Point 3, Pope Properties/Charleston Ltd. Liability Co. v. Robinson, 230 W.Va. 

382, 738 S.E.2d 546 (2013). 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Justice Ketchum: 

In this case we consider whether a large inventory of jet engine repair parts 

are exempt from ad valorem property taxation. The county assessor, state tax 

commissioner, and circuit court all considered this question and concluded that the repair 

parts are not exempt from ad valorem property taxation. After review, we agree with the 

circuit court’s conclusion and, accordingly, affirm its order. 

I. FACTUAL AND PROCEDURAL BACKGROUND 

Petitioner Pratt & Whitney Engine Services (“Pratt”) repairs jet engines at 

its facility in Bridgeport, West Virginia. It maintains a vast inventory of jet engine repair 

parts at its West Virginia facility—the parts at issue are listed on a 39-page single-spaced 

document and are valued at $7,438,639.52. 

In January 2015, Pratt requested that the Harrison County Assessor conduct 

a review of whether the majority of its repair parts were exempt from ad valorem 

taxation.1 Pratt argued that the repair parts were exempt from ad valorem taxation2 

1 We pause briefly to discuss Pratt’s argument regarding the percentage of its 

repair parts that should be exempt from ad valorem taxation. Pratt’s total worldwide 

sales for the period ending July 1, 2014, was $277,692,708. Only 1.696% ($4,709,280) 

of these sales were made to West Virginia customers. The circuit court described Pratt’s 

argument as follows: “Using the allocation of 1.696% sales to West Virginia customers, 

[Pratt] argues that the inventory of spare parts valued at $7,438,639 by [the Harrison 

County Assessor] should be valued at $126,148 for ad valorem tax purposes for the 2015 

TY.” In essence, Pratt argued that because approximately 98.3% of its repair parts are 

(continued . . .) 

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pursuant to the Freeport Amendment contained in the West Virginia Constitution. The 

Freeport Amendment exempts certain personal property of inventory and warehouse 

goods from ad valorem taxation. It provides: 

Notwithstanding any other provisions of this 

Constitution, tangible personal property which is moving in 

interstate commerce through or over the territory of the State 

of West Virginia, or which was consigned from a point of 

origin outside the State to a warehouse, public or private, 

within the State for storage in transit to a final destination 

outside the State, whether specified when transportation 

begins or afterward, but in any case specified timely for 

exempt status determination purposes, shall not be deemed to 

have acquired a tax situs in West Virginia for purposes of ad 

valorem taxation and shall be exempt from such taxation, 

except as otherwise provided in this section. Such property 

shall not be deprived of such exemption because while in the 

warehouse the personal property is assembled, bound, joined, 

processed, disassembled, divided, cut, broken in bulk, 

relabeled, or repackaged for delivery out of state, unless such 

activity results in a new or different product, article, 

substance or commodity, or one of different utility. 

W.Va. Const. art. X, § 1c [1986] (emphasis added). 

used in jet engines that are shipped to customers outside of West Virginia, 98.3% of the 

value of its repair parts inventory should be exempt from ad valorem taxation. 

2 The phrase “ad valorem” means, literally, “according to the value” and is used in 

taxation to designate an assessment of taxes against property, real or personal, at a certain 

rate upon its value. Smith v. American Airlines, Inc., 606 So. 2d 618, 620 (Fla. 1992). 

The essential characteristic of an ad valorem tax is that the tax is levied according to the 

value of property as determined by an assessment or appraisal. American Airlines, Inc. v. 

County of San Mateo, 912 P.2d 1198 (Cal. 1996). 

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After conducting its review, the county assessor determined that the repair 

parts were not exempt from ad valorem taxation. The assessor explained its finding as 

follows: 

[O]ur review indicates that the parts in inventory are used in a 

manufacturing process that renders them an integral part of a 

jet engine. Clearly, the parts in a functioning jet engine have 

a different utility than the parts that are stocked on shelves 

and used in the repairs process. Given our review, we are of 

the opinion that the parts inventory located in Bridgeport and 

used by [Pratt] in its jet engine repairs process are not eligible 

for the Freeport exemption . . . as the use of such parts by 

[Pratt] . . . results in a product of different utility. 

At Pratt’s request, the county assessor certified Pratt’s question to the 

Respondent State Tax Commissioner (“tax commissioner”) for “review and issuance of a 

taxability ruling.” The tax commissioner issued a detailed, seven-page decision which 

concluded that Pratt’s repair parts were not exempt from ad valorem taxation. Pratt 

appealed the tax commissioner’s administrative decision to the circuit court. 

The circuit court held a bench trial on April 29, 2016.3 The sole witness at 

the bench trial was Pratt’s manager of supply chain logistics, Timothy H. Tucker. Mr. 

Tucker testified that Pratt buys the repair parts from its parent company, Pratt Whitney 

3 Prior to the bench trial, the parties and the circuit court took part in a “site walk” 

at Pratt’s Bridgeport facility. During the site walk, the parties observed 1) several jet 

engines that were being repaired, which were approximately six to seven feet in length; 

2) a jet engine being tested in a wind tunnel; and 3) the storage space where “several 

grommets” and other repair parts were maintained. 

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Canada. He stated that Pratt uses the repair parts when manufacturing, overhauling, and 

repairing jet engines. All of the repair parts are shipped to the Bridgeport facility from 

locations outside of West Virginia. The majority of the repair parts stay in the Bridgeport 

facility from “zero to three months.” Mr. Tucker testified that the repair parts that are 

used retain their characteristics and identity during their installation into a jet engine. For 

example, Mr. Tucker was asked about one particular repair part, a counterweight, and had 

the following exchange with counsel for Pratt: 

Q. So from the inception of manufacture, to the time it 

takes off and flying people hither and yon, it is a 

counterweight coming in, it’s a counterweight going out? 

A. That’s correct. 

During cross-examination, Mr. Tucker discussed the purpose and utility of 

a jet engine, and the purpose and utility of the individual repair parts: 

Q. What’s the purpose of a jet engine? 

A. It is to provide thrust. 

Q. To fly an airplane? 

A. To fly an airplane, a helicopter, anything that you want 

to put it on, whether it’s a jet engine, in general, would have 

many uses. 

Q. And then you install all of these parts as needed in the 

repair of jet engines? 

A. That’s correct. 

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Q. Could you tell me what is the – is a grommet vein 

retaining4 the same product as a jet engine? 

A. It is a component of a jet engine. 

Q. But the jet engine, is that the same as a grommet? 

A. It would not be the same, as far as a part number goes, 

no. 

Q. But it’s a different product? 

A. It is – it’s a piece of that product, yes. It’s used in 

building that product. You can’t have the jet engine without 

it. 

Q. Does the jet engine have the same utility as a 

grommet? 

A. The jet engine itself would not have the same utility as 

the grommet, but the jet engine wouldn’t exist without what 

the grommet does, if that makes sense. 

Q. It does. Is a compressor the same product as a jet 

engine? 

A. It’s a – it would not be the same product itself. It 

would have a different part number, but it is a – you can’t 

have a jet engine without it. 

Q. And all of these parts on this 39-page list [of Pratt 

repair parts] would be components of a jet engine, correct? 

A. That’s correct. 

4 The circuit court’s order notes that a “grommet” is “a reinforced eyelet . . . 

through which a fastener may be passed.” 

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Q. At some point? 

A. Correct. 

Q. But the jet engine is a different product than all these 

items on the 39-page list? 

A. Yes. The items on the 39-page list, you couldn’t 

necessarily make a jet engine out of even the sum of those 

yet. 

Q. So a jet engine is different than a collection of 

grommets, and flywheels, and compressor blades? 

A. In their individual states, yes. 

Following the bench trial, the circuit court issued a fifteen-page order 

affirming the tax commissioner’s ruling that Pratt’s inventory of repair parts was not 

exempt from ad valorem taxation pursuant to the Freeport Amendment. In so ruling, the 

circuit court noted that Mr. Tucker testified that “a jet engine is a new and different 

product than the sum of the component parts installed in the jet engine. Since the 

activities of [Pratt] result in a fully operational jet engine which is a new and different 

product than the individual repair parts, [Pratt] falls outside the parameters of the 

Freeport Amendment.” The circuit court’s order also noted that Mr. Tucker testified that 

a jet engine has a different utility than the individual repair parts. Following entry of the 

circuit court’s order on August 24, 2016, Pratt filed the present appeal with this Court. 

II. STANDARD OF REVIEW 

Pratt appeals the circuit court’s order affirming the tax commissioner’s 

ruling which concluded that the repair parts were not exempt from ad valorem taxation 

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pursuant to the Freeport Amendment. “In cases where a taxpayer challenges an ad 

valorem tax assessment, a circuit court’s conclusions of law are reviewed by this Court 

de novo.” Syllabus Point 3, Pope Properties/Charleston Ltd. Liability Co. v. Robinson, 

230 W.Va. 382, 738 S.E.2d 546 (2013). To the extent Pratt challenges the circuit court’s 

factual findings, our review is set forth in Syllabus Point 2 of Walker v. W.Va. Ethics 

Comm’n, 201 W.Va. 108, 492 S.E.2d 167 (1997): 

In reviewing challenges to the findings and 

conclusions of the circuit court . . . we review the circuit 

court’s underlying factual findings under a clearly erroneous 

standard. Questions of law are subject to a de novo review. 

We now turn to the parties’ arguments. 

III. ANALYSIS 

There are three main arguments raised in this appeal.5 First, Pratt argues 

the repair parts are exempt from ad valorem taxation under the Freeport Amendment 

5 Pratt’s brief to this Court begins with a list of ten assignments of error. 

However, the brief does not address each of these assignments of error individually under 

separate headings. Instead, the discussion section of the brief is only organized under the 

generic heading “Argument.” For purposes of our discussion, we group Pratt’s 

arguments into the three main categories set forth in our “Analysis.” Pursuant to Rule 10 

of the Rules of Appellate Procedure, a brief to this Court must contain “an argument 

exhibiting clearly the points of fact and law presented, the standard of review applicable, 

and citing the authorities relied on, under headings that correspond with the assignments 

of error.” (Emphasis added). “This Court has previously adhered to the rule that 

although we liberally construe briefs in determining issues presented for review, issues 

which are . . . mentioned only in passing but are not supported with pertinent authority, 

are not considered on appeal.” State v. Gray, 217 W.Va. 591, 600, 619 S.E.2d 104, 113 

(2005) (citation and internal quotation omitted). 

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because the repair parts do not become a new product, or a product with a different utility 

during the repair process. Next, it asserts that the inventory of repair parts are exempt 

from ad valorem taxation because they are “at all times moving in interstate commerce 

through or over . . . West Virginia.” Finally, Pratt maintains the circuit court erred by 

failing to liberally construe the Freeport Amendment in its favor. 

A. New Product/Different Utility 

We begin with an examination of the Freeport Amendment. In addition to 

the constitutional amendment contained in W.Va. Const. art. X, § 1c, the Freeport 

Amendment is codified in W.Va. Code § 11-5-13 [1987], which provides, in part: 

(a) Tangible personal property which is moving in interstate 

commerce through or over the territory of the state of West 

Virginia, or which was consigned from a point of origin 

outside the state to a warehouse, public or private, within the 

state for storage in transit to a final destination outside the 

state, whether specified when transportation begins or 

afterward, but in any case specified timely for exempt status 

determination purposes, shall not be deemed to have acquired 

a tax situs in West Virginia for purposes of ad valorem 

taxation and shall be exempt from such taxation, except as 

otherwise provided herein. 

(b) Such property shall not be deprived of such exemption 

because while in the warehouse the personal property is 

assembled, bound, joined, processed, disassembled, divided, 

cut, broken in bulk, relabeled, or repackaged for delivery out 

of state, unless such activity results in a new or different 

product, article, substance or commodity, or one of different 

utility. 

Further, W.Va. Code § 11-5-13a [1997] addresses the purpose of the tax 

exemption contained in the Freeport Amendment as follows: 

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(a) This section is intended to clarify the intent of the 

Legislature and the citizens in establishing the exemption 

from ad valorem property taxation granted by section one-c, 

article ten of the West Virginia constitution and section 

thirteen of this article as it pertains to goods held in 

warehouse facilities in this state awaiting shipment to a 

destination outside this state. This section codifies policies 

applied by agencies and departments of this state upon which 

persons have relied. It is the intent of the Legislature that the 

provisions of this section are to be liberally construed in favor 

of a person claiming exemption from tax pursuant to section 

one-c, article ten of the West Virginia constitution, this 

section and section thirteen of this article. 

(b) Goods which have been moved to a warehouse or storage 

facility, at which no substantial alteration takes place, to await 

shipment to a destination outside this state are deemed to be 

moving in interstate commerce over the territory of the state 

and therefore are exempt from ad valorem property tax and 

do not have a tax situs in West Virginia for purposes of ad 

valorem taxation. 

The main issue in this appeal concerns the following language contained in 

the Freeport Amendment: 

Such property shall not be deprived of such exemption 

because while in the warehouse the personal property is 

assembled, bound, joined, processed, disassembled, divided, 

cut, broken in bulk, relabeled, or repackaged for delivery out 

of state, unless such activity results in a new or different 

product, article, substance or commodity, or one of different 

utility. 

(Emphasis added). 

The issue is whether Pratt’s repair parts are used to create a new product or 

a product with a different utility. The county assessor, tax commissioner, and circuit 

court all analyzed this issue and concluded that Pratt was not entitled to the Freeport 

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exemption because its inventory of repair parts are used to create a product with a 

different utility, i.e., a functioning jet engine. 

On appeal, Pratt argues that its inventory of repair parts should be exempt 

from ad valorem taxation under the Freeport Amendment. It argues that these repair 

parts do not “change their character in the course of being assembled at Bridgeport, 

become a new or different product while in the [Pratt] facility or become a product with a 

different utility.” Instead, according to Pratt, its repair parts are individual components of 

a jet engine prior to being installed, and they continue to be individual components of a 

jet engine after being installed. 

Conversely, the tax commissioner argues that the Freeport Amendment 

does not apply to Pratt’s inventory of repair parts. According to the tax commissioner, 

“the act of installing a repair part, such as a compressor, into a broken jet engine results 

in a new or different product and in a product with a different utility.” The tax 

commissioner emphasizes that the lone witness before the circuit court, a Pratt employee, 

testified that a jet engine is a different product and has a different utility than the 

individual repair parts. 

Our resolution of this issue requires us to examine the Freeport Amendment 

contained in the West Virginia Constitution. “Questions of constitutional construction 

are in the main governed by the same general rules applied in statutory construction.” 

Syllabus Point 1, Winkler v. State School Bldg. Auth., 189 W.Va. 748, 434 S.E.2d 420 

(1993). This Court has held that in deciding the meaning of a statutory provision, “[w]e 

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look first to the statute’s language. If the text, given its plain meaning, answers the 

interpretive question, the language must prevail and further inquiry is foreclosed.” 

Appalachian Power Co. v. State Tax Dep’t of West Virginia, 195 W.Va. 573, 587, 466 

S.E.2d 424, 438 (1995); see also Syllabus Point 2, Crockett v. Andrews, 153 W.Va. 714, 

172 S.E.2d 384 (1970) (“Where the language of a statute is free from ambiguity, its plain 

meaning is to be accepted and applied without resort to interpretation.”); and Syllabus 

Point 2, State v. Epperly, 135 W.Va. 877, 65 S.E.2d 488 (1951) (“A statutory provision 

which is clear and unambiguous and plainly expresses the legislative intent will not be 

interpreted by the courts but will be given full force and effect.”). 

Additionally, this Court has held that “[a] statute is open to construction 

only where the language used requires interpretation because of ambiguity which renders 

it susceptible of two or more constructions or of such doubtful or obscure meaning that 

reasonable minds might be uncertain or disagree as to its meaning.” Sizemore v. State 

Farm Gen. Ins. Co., 202 W.Va. 591, 596, 505 S.E.2d 654, 659 (1998) (internal 

quotations and citation omitted). With these rules of construction in mind, we turn to the 

Freeport Amendment. 

As an initial matter, we conclude that the Freeport Amendment is 

unambiguous. Based on the plain language of the Freeport Amendment, and its enacting 

statutes, the tax exemption does not apply if Pratt’s installation of its repair parts into a jet 

engine “results in a new or different product, article, substance or commodity, or one of 

different utility.” The undisputed facts of this matter are that Pratt stores a large number 

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of repair parts at its Bridgeport facility. It installs these parts into malfunctioning jet 

engines at the Bridgeport facility. The end result of this process is a fully functional jet 

engine. 

As noted by the circuit court, Mr. Tucker, a Pratt employee who was the 

lone witness at the bench trial, stated that a jet engine is a different product than the 

individual repair parts. In fact, Mr. Tucker testified that all of the repair parts “on the 39­

page list, you couldn’t necessarily make a jet engine out of even the sum of those yet.” 

Further, Mr. Tucker testified that a jet engine does not have the same utility as an 

individual repair part. Because Mr. Tucker testified that a repaired, functional jet engine 

is a different product with a different utility than the individual repair parts, we agree 

with the circuit court’s conclusion that the repair parts are not exempt from ad valorem 

taxation pursuant to the Freeport Amendment. 

The only previous case from this Court analyzing the Freeport Amendment 

supports our conclusion. In Feroleto Steel Co. v. Oughton, 230 W.Va. 5, 7, 736 S.E.2d 5, 

7 (2012), this Court considered whether a business that cut “steel coils into narrower steel 

coils . . . transforms the steel coils into products of new or different utility so that the steel 

coils are not exempt from ad valorem property taxation.” The Court determined that the 

taxpayer was entitled to the Freeport exemption in Feroleto because the cutting of the 

steel coils into narrower steel coils did not create a new product or a product with a 

different utility. In so ruling the Court relied on the fact that “the steel coils arrive at the 

petitioner’s plant as steel coils, and they leave the plant as steel coils, only of a narrower 

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size. While at the petitioner’s plant, the composition of the steel is not changed.” 230 

W.Va. at 8, 736 S.E.2d at 8. In the present case, the repair parts arrive at Pratt’s facility 

as individual parts. The individual repair parts are stored in Pratt’s facility for an average 

of “zero to three months.” Finally, the parts are used in a manufacturing process to 

overhaul or repair a jet engine. The individual repair parts leave the facility as 

components of a functional jet engine—a new product with a different utility than the 

individual repair parts. 

The Legislature has made it clear that the purpose of the Freeport 

Amendment is to exempt “[g]oods which have been moved to a warehouse or storage 

facility, at which no substantial alteration takes place, to await shipment to a destination 

outside this state” from ad valorem property tax. See W.Va. Code § 11-5-13a. Thus, one 

of the purposes of the Freeport Amendment is to promote the warehousing industry in 

West Virginia. It is clear that Pratt is not engaged in the warehousing business. Pratt 

buys the repair parts from an out-of-state vendor. It stores these parts until they are 

needed in its engine repair process. Finally, it installs these repair parts into a 

malfunctioning jet engine, producing a new product, a functioning jet engine, which has a 

separate and distinct utility from the individual repair parts. 

Based on the foregoing, we conclude that the circuit court did not err by 

affirming the tax commissioner’s order. We agree with the circuit court’s conclusion that 

the repair parts are not exempt from ad valorem taxation under the Freeport Amendment 

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because they are used in the repair process at Pratt’s facility to create a product with a 

different utility. 

B. Interstate Commerce 

Pratt next argues that its repair parts are goods moving through interstate 

commerce and should be exempt from ad valorem taxation pursuant to the first sentence 

of the Freeport Amendment, which provides: 

Notwithstanding any other provisions of this 

Constitution, tangible personal property which is moving in 

interstate commerce through or over the territory of the State 

of West Virginia, or which was consigned from a point of 

origin outside the State to a warehouse, public or private, 

within the State for storage in transit to a final destination 

outside the State, whether specified when transportation 

begins or afterward, but in any case specified timely for 

exempt status determination purposes, shall not be deemed to 

have acquired a tax situs in West Virginia for purposes of ad 

valorem taxation and shall be exempt from such taxation, 

except as otherwise provided in this section. 

Both the circuit court and the state tax commissioner rejected Pratt’s 

argument that its inventory of repair parts should be exempt from ad valorem taxation 

under the first sentence of the Freeport Amendment. The circuit court explained its 

rationale for rejecting this argument as follows: 

The 39-page list of inventory repair parts does not 

represent goods moving in interstate commerce. The situs of 

the transaction is West Virginia under the facts of this case. 

Pratt purchased an inventory of repair parts for use in [its] jet 

engine repair business in Bridgeport, West Virginia. A 

customer will ship a jet engine in need of repairs to 

Bridgeport for Pratt to repair and recondition as necessary. 

According to Mr. Tucker’s testimony, the repair parts are 

used by Pratt in Bridgeport to repair jet engines. After a 

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grommet or compressor is installed on the engine and the jet 

engine once again becomes operational, the jet engine is 

returned to the customer for use in the field. The 39-page list 

of repair parts is not moving in interstate commerce any more 

than the tires held in inventory by Firestone or Goodyear 

would be moving in interstate commerce. 

Similarly, in the tax commissioner’s ruling denying Pratt’s request for an 

exemption under the Freeport Amendment, it noted: 

The inventories maintained by Pratt consist of parts to 

be used or consumed in the provision of its aircraft engine 

repair service, not of goods or merchandise that merely reside 

here temporarily while in transit. The Freeport Amendment 

was never intended to exempt the ordinary inventories of 

tangible personal property kept on hand for such purposes. 

The goods in question are not in transit – they are used or 

consumed in the provision of a service which is performed 

entirely with the State of West Virginia. 

We agree with the rationale set forth by the circuit court and the tax 

commissioner. The plain language of the Freeport Amendment and its enacting statutes 

provide a straightforward statement of its application: the tax exemption applies to 

property or goods delivered “from a point of origin outside the State to a warehouse, 

public or private, within the State for storage in transit to a final destination outside the 

State.” (Emphasis added). 

Pratt’s inventory of repair parts are purchased from out-of-state and stored 

in its West Virginia facility until needed to overhaul or repair a malfunctioning jet 

engine. Once a customer sends a malfunctioning jet engine to the West Virginia facility, 

the repair parts are used in the manufacturing process that occurs in West Virginia, 

resulting in the repair parts becoming an integral part of a functioning jet engine. Pratt’s 

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argument that its inventory of parts are simply moving through interstate commerce 

stretches the Freeport Amendment far beyond its plain language. If this Court adopted 

Pratt’s argument, we would potentially be extending the Freeport Amendment to all 

manufacturing businesses that purchase goods from outside of the state for use in a 

manufacturing process that occurs in West Virginia, and results in a finished product 

being delivered to an out-of-state customer. This expansion of the Freeport Amendment 

is not supported by its plain language or by its enacting statutes. In fact, the second 

sentence of the Freeport Amendment makes it abundantly clear that goods which are 

stored in West Virginia and used to create a new product or a product with a different 

utility do not qualify for the ad valorem tax exemption. Plainly, Pratt’s repair parts were 

not brought into West Virginia simply “for storage in transit to a final destination outside 

the State.” 

Based on the foregoing, we conclude that the circuit court did not err by 

rejecting Pratt’s argument that its repair goods were exempt from ad valorem taxation 

pursuant to the first sentence of the Freeport Amendment.6 

6 Pratt’s argument that its repair parts are exempt under the first sentence of the 

Freeport Amendment also includes an assertion that its repair parts are exempt from 

taxation under the Commerce Clause. U.S. Const. art. 1, § 8, cl. 3 (Congress shall have 

the power to “regulate Commerce with foreign Nations, and among the several States.”). 

We disagree. We need not linger on this issue because of our determination that the 

repair parts at issue are not merely moving through interstate commerce, rather, the 

inventory of repair parts are purchased by a West Virginia company and stored at its 

West Virginia facility for eventual use in its manufacturing process that occurs in West 

(continued . . .) 

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C. Liberal Construction 

Finally, Pratt argues that the circuit court “erred in failing to effectively 

construe the Freeport [A]mendment liberally in favor of the taxpayer seeking the 

exemption, in violation of the specific mandate of the West Virginia legislature” and in 

violation of this Court’s ruling in Feroleto Steel. The tax commissioner agrees with Pratt 

that the Freeport Amendment is to be liberally construed in favor of the taxpayer seeking 

the exemption. However, the tax commissioner disagrees with Pratt’s assertion that the 

circuit court failed to liberally construe the Freeport Amendment in Pratt’s favor. 

West Virginia Code § 11-5-13a(a) provides, in part, “[i]t is the intent of the 

Legislature that the provisions of this section are to be liberally construed in favor of a 

person claiming exemption from tax.” Similarly, in Syllabus Point 2 of Feroleto Steel, 

Virginia. Assuming arguendo that the repair parts were simply passing through West 

Virginia in interstate commerce, our analysis would focus on the Complete Auto Transit, 

Inc. v. Brady, 430 U.S. 274 (1977), four-part test. Under Complete Auto, a state tax 

imposed on interstate commerce is constitutional if it “is applied to an activity with 

substantial nexus with the taxing State, is fairly apportioned, does not discriminate 

against interstate commerce, and is fairly related to the services provided.” Id. at 279. 

There has been no showing that the tax on Pratt’s inventory of repair parts violates any of 

these factors. As the tax commissioner notes, “property physically present in West 

Virginia [such as Pratt’s inventory of repair parts] has a sufficient nexus for ad valorem 

property tax purposes.” The tax commissioner also asserts that the taxes assessed by the 

county assessor are used to provide essential county services. Further, the tax 

commissioner argues that there has been no showing that the taxes are assessed in a 

discriminatory manner. Finally, the tax commissioner states that there has been no 

showing that the county assessor has failed to properly apportion the ad valorem taxes. 

We agree with the tax commissioner and find Pratt has failed to satisfy the four-factor 

Complete Auto test. 

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this Court held: “Pursuant to W.Va. Code § 11-5-13a(a), it is the intent of the Legislature 

that the exemption from ad valorem taxation of certain personal property of inventory 

and warehouse goods provided for in W.Va. Const. art. X, § 1c; W.Va. Code § 11-5-13; 

and W.Va. Code § 11-5-13a(b); is to be liberally construed in favor of a person claiming 

the exemption.” 

The circuit court’s order affirming the tax commissioner’s ruling 

recognizes that the Freeport Amendment is to be liberally construed in favor of the 

taxpayer. In fact, the circuit court’s order discusses W.Va. Code § 11-5-13a numerous 

times, including the following statement contained under its “conclusions of law” 

heading: “According to W.Va. Code § 11-5-13a(a), the Freeport Exemption is to be 

liberally construed.” 

Additionally, after recognizing that it was required to liberally construe the 

Freeport Amendment in Pratt’s favor, the circuit court explained why it nevertheless 

determined that the repair parts were not exempt from ad valorem taxation under the 

Freeport Amendment. The circuit court’s order provides: 

[Pratt] argues that the Freeport Amendment should be 

liberally construed by the Courts. [Pratt] is correct as an 

abstract statement of law. See W.Va. Code § 11-5-13a(a). 

However, Mr. Tucker’s testimony was clear and consistent. 

A jet engine is a new and different product than a grommet or 

a counterweight. A jet engine has a different utility than a 

compressor. Liberal construction should not be cited as a 

basis to ignore the undisputed testimony of Pratt’s own 

witness. If the activities of any taxpayer results in a new or 

different product or a product with a different utility, then the 

tangible personal property at issue does not meet the language 

of the Freeport Amendment. In the case before the Circuit 

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Court today, it is clear that [Pratt’s] activities do not fall 

within the parameters of the Freeport Amendment. 

(Emphasis added). 

Based on this clear statement, the circuit court recognized that the Freeport 

Amendment is to be liberally construed and it considered Pratt’s argument under this 

standard. The circuit court reasoned that, despite the liberal construction standard, Pratt’s 

argument failed based on the undisputed testimony of the only witness who testified 

during the bench trial. This witness, a Pratt employee, testified that the manufacturing 

process in which the repair parts are used results in a new product with a different 

utility—a functional jet engine. 

We agree with the circuit court’s reasoning and conclusion. The circuit 

court recognized that the Freeport Amendment is to be liberally construed, considered 

Pratt’s argument under this standard, and explained its reasons for ruling against Pratt 

despite this standard. The testimony of the sole witness demonstrated clearly and 

unequivocally that the inventory of repair parts do not fall within the Freeport 

Amendment exemption. 

Based on the foregoing, we find that the circuit court did not err “in failing 

to effectively construe the Freeport [A]mendment liberally” in Pratt’s favor.7 

7 Pratt also argues that the circuit court failed to apply the proper standard of proof 

in this case. Pratt asserts that the preponderance of the evidence standard should be 

applied to taxpayer’s seeking an exemption under the Freeport Amendment. We 

(continued . . .) 

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IV. CONCLUSION 

The circuit court’s August 24, 2016, order is affirmed. 

Affirmed. 

disagree. In Syllabus Point 5, in part, of In re Tax Assessment of Foster Foundation’s 

Woodlands Retirement Community, 223 W.Va. 14, 672 S.E.2d 150 (2008), this Court 

held: “A taxpayer challenging an assessor’s tax assessment must prove by clear and 

convincing evidence that such tax assessment is erroneous.” 

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