Opinion ID: 419666
Heading Depth: 3
Heading Rank: 1

Heading: Appearance Test

Text: 7 The Tax Court held that the functional test is the primary means of determining whether a structure is a building. It did not reach the appearance test, except in a footnote. 74 T.C. at 794-95, 796 n. 11. Consolidated argues that the Tax Court erred in failing to apply the appearance test, and that the appearance test would establish that the docks are not buildings because they lack permanent walls. Consolidated is mistaken. 8 In Thirup v. Commissioner, 508 F.2d 915, 919 (9th Cir.1974), we stated that we thoroughly agree ... [with the] recent authorities ... [who have] abandon[ed] the appearance test, and we employed the functional test and held that greenhouses are not buildings. See Brown-Forman Distillers Corp. v. United States, 499 F.2d 1263, 1271 (Ct.Cl.1974) (the real inquiry is whether [the structures] are functioning or being used as 'buildings' ); Satrum v. Commissioner, 62 T.C. 413, 416 (1974) (applying only the functional test). But cf. A.C. Monk & Co. v. United States, 686 F.2d 1058, 1061 (4th Cir.1982); (placing major emphasis on functional test, but still looking to appearance); Consolidated Freightways, Inc. v. United States, 620 F.2d 862, 870, 223 Ct.Cl. 443 (Ct.Cl.1980) (same). Thus, the Tax Court's failure to employ the functional test is consistent with our approach in Thirup. 9 Consolidated contends, however, that the Tax Court was the first court to hold that a structure that does not look like a building is nonetheless a building for investment tax credit purposes. Consolidated is wrong. The docks appear to be buildings, as the Tax Court said at 74 T.C. at 796 n. 11. The photographs of the docks confirm this. The docks, although they lack normal walls, are mostly enclosed by overhead doors. Consolidated insists that the docks cannot be buildings because buildings must have permanent walls. This argument was advanced--and rejected--in both A.C. Monk, 686 F.2d at 1063, and Consolidated Freightways, 620 F.2d at 870 & n. 17, and in Yellow Freight System, Inc. v. United States, 538 F.2d 790, 796 & n. 9 (8th Cir.1976). We agree with these courts that, for the purposes of the investment tax credit, a structure without permanent walls may constitute a building.