Court Opinion

ID: 9514298
Source: CourtListenerOpinion
Date Created: 2023-08-06 22:48:32.573765+00
Date Added: 2024-06-11T09:06:15.947201
License: Public Domain

SABERS, Justice
(concurring in part, dissenting in part).
[¶ 53] I concur in all respects except that I dissent with regard to the 1992 taxes.
[¶ 54] The designation of machinery, equipment, and tools as real property for taxation purposes is dictated by statute; therefore, the trial court erred when it classified Wharfs crushers and conveyers as personal property not subject to taxation as part of the mining operation.
[¶ 55] On the date that Wharf s 1992 tax was assessed, SDCL 10-4-212 provided that, for purposes of taxation, real property “shall be construed to include ... all buildings, structures ... and improvements ... trees or other fixtures of whatsoever kind thereon ... and all mines, minerals, quarries in and under the same.” Furthermore, SDCL 43-1-5 provides that “[s]luiee boxes, flumes, hose, pipes, railway tracks, ears, blacksmith shops, mills, and all other machinery or tools used in working or developing a mine, are to be deemed affixed to the mine.” (Emphasis added). Finally, SDCL 10-6-35 provides, in relevant part, “[i]n valuing any real property upon which there is a coal or other mine ... the same shall be valued at such a price as such property, including the mine or quarry, would sell at a fair voluntary sale for cash.”
[¶ 56] There can be no doubt that the Legislature intended the machinery and tools employed in a mining operation to be considered fixtures to the land. See SDCL 43-1-5. The majority states that statute is only “intended to aid in determining [what is appurtenant to a mine].” See supra at ¶ 49. Surely the use of such specific language was intended to be definitive and not merely helpful. The majority also points to the absence of a definition for “mine” in the South Dakota Code, as if the inclusion of such would spell an end to the debate. Webster’s Dictionary defines “mine” in part as follows: “[A] pit or excavation in the earth from which mineral substances ... are taken by digging or by some other method of extraction; such a pit or excavation together with the land, buildings, and machinery belonging to it.” Webster’s New Int’l Dictionary 1437 (3d ed. 1967) (emphasis added).
[¶ 57] Although the majority summarily dismisses SDCL 43-1-5 as a statute of “general” application, this court has previously looked to Title 43 for guidance in determining whether certain items qualify as real property. See, e.g., National Food Corp. v. Aurora Cty. Bd. of Com’rs, 537 N.W.2d 564 (S.D.1995). In that ease, we relied in part on *620Title 43 to determine that tanks storing grain, water, and propane were taxable real property. Id. at 566 (citing SDCL 43-1-3(2) & 43-33-1).
[IF 58] The trial court concluded Wharfs crushers and conveyers were personal property, not fixtures. If property is a fixture, it is taxable as real property under the pre-1992 version of SDCL 10-4-2. In determining whether an article is a fixture, this court considers the aforementioned statutes, as well as the following factors:
(1) Its annexation to the realty; either actual or constructive; (2) its adaptability to the use and purpose for which the realty is used; and (3) the intention of the party making the annexation. The intention of the party with regard to making the article a permanent accession to the realty is the controlling criterion. The other tests derive their chief value as evidence of such intention. Intention is deduced from the relation of the parties and the circumstances of a particular case.
In re Tax Appeal of Logan, 331 N.W.2d 281, 282-83 (S.D.1983) (citations omitted). The trial court found that Wharf did not intend for the equipment to become a permanent improvement to the property; however, that determination was based in part on the fact that Wharf intended to “remove those items at the end of the mine life as required not only by Wharfs final mine reclamation plan, but also by South Dakota law” (emphasis added) (citation omitted). In light of previous statements by this court, this finding is inconsistent with the conclusion that Wharf did not intend to make permanent improvements:
The permanence required is not equated with perpetuity. It is sufficient if the item is intended to remain where affixed until worn out, until the purpose to which the realty is devoted is accomplished or until the item is superseded by another item more suitable for the purpose.
Brink Elec. Constr. v. Department of Revenue, 472 N.W.2d 493, 500 (S.D.1991). Because Wharfs intent is consistent with our definition of “permanence” as relates to fixtures, these mining tools and machinery should have been taxed as real property.13

. On January 1, 1992, SDCL 10-4-2 provided, in its entirely:
Real property, for the purposes of taxation, shall be construed to include the land itself, whether laid out in town lots or otherwise, and all buildings, structures, mobile homes as they are defined in subdivision (6) of § 34-34A-1 which are permanently affixed by foundation to the land upon which they are located, and improvements, including systems for the heating, air conditioning, ventilation, sanitation, lighting, and plumbing of such structures and buildings, and all rights and privileges thereto belonging or in anywise appertaining, trees or other fixtures of whatsoever kind thereon, and ail rights and privileges thereto belonging or in anywise appertaining, and all mines, minerals, quarries in and under the same.
Although a 1992 revision of SDCL 10-4-2 deleted reference to the term "fixtures,” that change is immaterial to this case because it went into effect July 1, 1992 and Wharf's tax was assessed January 1, 1992.

. The issue surrounding the 1992 tax assessment has actually been a non-issue for some time; in a 1917 opinion by the South Dakota Attorney General, generated in response to a request to interpret the exact same language as that which appears today in SDCL 43-1-5, the conclusion was as follows:
[M]ill tools and machinery used in working or developing a mine are deemed to be affixed to the mine and it is the opinion of this office that [such property] should have been taxed as real property. It therefore follows that the assessment of this property as personal property was illegal and void[.]
1917-18 Op. Att'y Gen. 68, 69 (1917).