Court Opinion

ID: 9678752
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:31:03.829669+00
Date Added: 2024-06-11T18:17:07.616126
License: Public Domain

DUNN, Justice
(dissenting).
I believe that the majority opinion is in error in its application of the United States Supreme Court decisions to this case.
The majority opinion correctly cites the rule from Central R.R. Co. of Pa. v. Pennsylvania, 370 U.S. 607, 82 S.Ct. 1297, 8 L.Ed.2d 720 (1962): the domicilary state may not constitutionally levy a personal property tax at full value on freight cars habitually employed on fixed routes and regular schedules in a state other than that of the owner’s domicile. (Emphasis added.) It is crucial to note that Central R.R. Co. of Pa. dealt with a situation in which the state levied its tax on the full value of the railroad property.
However, in the present case, the unit trains in question are not being taxed at their full value. First, the trains were assessed on a unit basis under SDCL ch. 10-35. For many, many years the utilities have been happy with the benefits that flow from the assessment of utility property on a unit basis. But now, the utilities want to segregate a portion of the property assessed on the unit basis because such a segregation would result in a lesser tax. The utilities seek to do this even though the unit trains are included in the “boiler account” of the power plant.
Second, South Dakota levied its tax not on the assessed value of the property but on the equalized value of the trains. Pursuant to SDCL 10-6-33, the value of the trains was equalized to 41.2% of their full and true value. SDCL 10-6-33 then provides that the actual tax which is levied is on the equalized value:
All property shall be assessed at its true and full value in money but not more than sixty percent of such assessed value shall be taken and considered as the taxable value of such property upon which the levy shall be made and applied and the taxes computed. (Emphasis added.)
Therefore, the situation presented to us in this case is not controlled by Central R.R. Co. of Pa. South Dakota is taxing the utility at only 41.2% of the true value of the trains, not the full value as dealt with by the United States Supreme Court in Central R.R. Co. of Pa.
In light of the facts mentioned above, the rule of Norfolk and Western Ry. v. Missouri State Tax Comm., 390 U.S. 317, 88 S.Ct. 995, 19 L.Ed.2d 1201 (1968), should apply: a state may impose a property tax on its fair share of an interstate transportation enterprise. Certainly, South Dakota’s fair share can include 41.2% of the value of the trains, especially considering the fact that 84.23% of the tracks are located in South Dakota and that the trains are included in the “boiler account” of a power plant located in South Dakota. Even if North Dakota assesses the trains at 15.77% of their value and levies a tax at that value, the total tax *822on the trains still does not come up to the full value contemplated in Central R.R. Co. of Pa., since South Dakota levied a tax on only 41.2% of the value. Thus, the tax imposed by the South Dakota Department of Revenue was well within the “fair share” allowed by the United States Supreme Court. •
Finally, the North Dakota tax on 15.77% of the value of the railroad cars has now been declared void in Ogilvie v. State Board of Equalization, 657 F.2d 204 (8th Cir.1981) cert. den. 454 U.S. 1086, 102 S.Ct. 644, 70 L.Ed.2d 621 (1981). Thus, under any conceivable theory, Big Stone has not been subjected to double taxation by the states of North and South Dakota during the years in question.
I would reverse and uphold the Department’s imposition of tax on the unit trains under SDCL ch. 10-35.
I am authorized to state that Justice HENDERSON joins in this dissent.