Court Opinion

ID: 9677310
Source: CourtListenerOpinion
Date Created: 2023-08-24 05:49:00.209428+00
Date Added: 2024-06-11T18:16:55.206637
License: Public Domain

McGEE, Justice,
dissenting.
I respectfully dissent from the majority’s holding that Davis failed to present any evidence the plane had acquired a separate tax situs. The majority focuses on the fact that the plane was not physically present at Tim’s on or before January 1, and holds such presence in the taxing jurisdiction was required as a matter of law. The cases cited by the majority do not address this issue, and I have found no authority for such a rigid rule.
Tangible personal property acquires a tax situs separate from its owner’s domicile when it is more or less permanently located there on the designated tax date. E.g., Nacogdoches Independent School District v. McKinney, 504 S.W.2d 832 (Tex.), modified on other grounds, 513 S.W.2d 5 (Tex.1974). Actual physical presence on that date, however, is not required and is not controlling. For example, personal property is taxable in the jurisdiction of its acquired situs even though it is temporarily absent on the day of assessment. See Nacogdoches Independent School District v. McKinney, supra. Conversely, it is not taxable where physically present when its presence is merely temporary or transitory. A & M Consolidated Independent School District v. Fickey, 542 S.W.2d 735 (Tex.Civ.App.—Waco 1976, writ ref’d n. r. e.); see State v. Crown Central Petroleum Corp., 242 S.W.2d 457 (Tex.Civ. App.—San Antonio 1951, writ ref’d). The controlling issue is permanence of location, and it is the permanence, rather than presence, which must exist on the tax date in order for the property to acquire a tax situs there for the following year. See Brock & Co. v. Board of Supervisors, 8 Cal.2d 286, 65 P.2d 791, 795 (1937).1
The physical location of the property pri- or to the tax date is, of course, relevant in determining the issue of permanence on the tax date. However, I have not found a single case, and the majority cites none, where a court has held prior physical presence is necessary as a matter of law in order to apply the acquired situs exception to the mobilia rule. In order to justify such a holding, prior physical presence should be essential to the effectuation of the policies which support the acquired situs exception. These policies, as stated by the majority, are: permitting an authority to tax non-domiciled owners’ tangible personal property enjoying that authority’s services, and protecting taxpayers by ensuring that the property taxed by an acquired situs jurisdiction benefits from that jurisdiction’s services. But prior physical presence is not essential to these policies because taxes are assessed prospectively. Such presence will not ensure that the property will enjoy the benefits and protection of the taxing jurisdiction for the year following the assessment date, nor will the property’s absence ensure that it will not enjoy those services.2
Davis presented other evidence which supports a finding that the plane was more or less permanently located at Tim’s Air-*337park on January 1, 1975. He testified he intended to remove the plane from Austin’s tax jurisdiction before the beginning of the 1975 tax year and to permanently relocate the plane at Tim’s as of January 1, 1975. He notified Ragsdale Aviation in Austin that he would no longer hangar his plane there after December 1974, he made arrangements for hangar facilities at Tim’s beginning January 1,1975, and he produced bills from Tim’s showing he had been charged for hangar rent from January 1, 1975. It was undisputed that he permanently removed his plane from Austin on December 30, 1974, that the plane was physically present at Tim’s beginning January 9, 1975, and that it remained at Tim’s until February 1977.
A jurisdiction’s right to assess taxes on personal property is based on a reciprocal obligation to provide protection and other services relating to the property. See Union Refrigerator Transit Co. v. Kentucky, 199 U.S. 194, 26 S.Ct. 36, 50 L.Ed. 150 (1905); Annot., 2 A.L.R. 4th 432, 438 (1980). As between states, a jurisdiction may not tax property owned by one of its residents if the property is permanently removed from the jurisdiction, and thus cannot receive the services of the jurisdiction, because such would amount to a taking of property without due process of law. Union Refrigerator Transit Co. v. Kentucky, supra. While the Due Process Clause of the Fourteenth Amendment does not dictate the result in this case, we have recognized that the underlying principles are significant in determining the tax situs of property as between different tax jurisdictions within the state. In Nacogdoches Independent School District v. McKinney, supra, we refused to allow the owner’s domicile jurisdiction to tax property located outside the jurisdiction, stating:
The acquired situs exception to the mo-bilia rule discussed and applied in this case finds justification in the sound theory that property which enjoys the protection of the jurisdiction in which it is more or less permanently located should be made to contribute to the expenses incident to its protection in that jurisdiction. .. . Whether one jurisdiction has this greater contact with the property and its uses than another jurisdiction may be considered.
504 S.W.2d at 838. Davis’ plane had no contact with the Austin taxing jurisdiction during the year for which the taxes were assessed. On the contrary, Davis intended that the plane would receive the protection and services for the 1975 tax year from Tim’s Airpark, outside the Austin taxing district, and those services were in fact provided.
This Court has emphasized that the mo-biiia rule, applied by the majority, is but a “legal fiction . .. ‘intended for convenience, and not to be controlling where justice does not demand it.’ ” Greyhound Lines, Inc. v. Board of Equalization, 419 S.W.2d 345, 349 (Tex.1967) (quoting Cooley, The Law of Taxation § 440 (4th ed. 1924)); see also Nacogdoches Independent School District v. McKinney, supra. In my opinion, justice does not demand that Davis pay taxes to Austin for services he unquestionably did not receive.
SPEARS and WALLACE, JJ., join in this dissent.

. These principles have now been codified in section 21.02 of the Texas Tax Code (effective January 1, 1982).

. It has been suggested that physical presence on or before the tax date is necessary in order to facilitate the assessment of taxes. While the tax situs of property is determined as of January 1 of the tax year, that determination need not be made on January 1. The taxpayer has a period of time after that date, generally three to four months, in which to render his property to the proper authority. The actual assessment is not made until some time later. Furthermore, personal property which is not rendered by the taxpayer may be placed on the “unrendered tax roll” when it is discovered. See generally Howell, 21 Texas Practice, Property Taxes §§ 225-26 (1975).