Honorable W. E. Coats, Jr. Opinion NO. (C-432)
Criminal District Attorney
Smith County Re: Situs of U-Haul trailers
Tyler, Texaa for the purpose of ad
valorem taxation, under
Dear Mr. Coats: the stated facts.
In your letter you have requested an opinion from this
office on the above mbject. We quote pertinent paragraphs
of your letter.
“Rental trailers owned by the Arcoa Inc.
of Port land, Oregon, commonly known as U-Haul
Trailers are available for hire in most all
counties of this state as well as other states.
The prlncipA1 place of business In Texas Is
Grand Prairie, Dallas County, Texas. In the
course of business of renting these trailers,
the trailers are rented In one county and may
or may not be returned to the renting establish-
ment In that county. The U-Haul Company Is not
involved in the dispute. They will pay their
taxes. We he trying to determine to whom.
“Dallas County authorities, Mr. Jerry D.
Brownlow, City Attorney for Grand Prairie, Texas,
relying on the enclosed opinion written by the
Dallas County District Attorney’s office, seeks
to tat all U-Haul‘ trailers located In the State
.of Texafind have the U-Haul Company pay all Its
ad valorem taxes to Dallas County.
“This office and Smith County authorltl&
seek to tax only the number of U-Haul trailers
within Smith County, as of January 1, 1965, for
the following reasons:
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Honorable W. E. Coats, Jr., Page 2 Opinion HO. (c-432)
“(1) The latter‘part of Article 7153 of
Vernon’s Texas Civil Statutes does not cover
the situation in dispute because the trailers
are not ‘temporarily removed’ from the Dallas
Counv Many of the trailers or most of them
in Texas will never be in Dallas County and,
even if the trailers were in Dallas County,
but are removed, they are not temporarily
remo~v&dfrom Dallas County‘r;Eiut are removed
with no prearranged plan for their return.
“(2) The number of U-Haul Trailers
located in Smith County Is almo$t constant.
Due to the nature of this business there murt
slwayr be present In Smith County a required
number of trailers to meet the business de-
mand. So, even if one specific trailer does,
not remain In Smith County so as to obtain a
‘permanent statue’, a certain number of trailers.,
do remain here all the time. City of Dallar v.
Overton, 363 S.W.2d 821 (error ref. n.r.e. lgb?).”
The Constitutional provision provldlng for the taxation
of property is Article VIII, Section 11 of the Texas Conetl-
tution. It states:
“All property, whether owned by p&sons,
or corporations @all be assessed for taxation,
ax&the taxes paid In the county where eltuated,
. . .” (Emph&rls supplied throughout.)
The phrase “where situated” has been interpreted by, the
Texas Supreme Court to mean “where situated” under the common
law rule of “mobllle sequuntur personam” and not to mean
“where situated” physically or technically. The court stated,
in Great SouthebnLlfe Insurance Company v. City of Austin,
112 Tex. 1.m S.W. 77U (1922) :
“The Conrtltutlop was framed with refer-
ence to the common law, and In judging what the
Constitution means weghould keep In mind that
It Is not the beginning of the law of the state,
but that it a8sumes the existence of a well-under-
stood system, which was still to remain In force and
be demonstrated, and that the constitutional deflnl-
tions are ln general drawn from the common law.
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. .
.
Honorable W. E. Coats, Jr., Page 3 Opinion No. (C-432)
Hewitt v. State, 25 Tex. 722, 727; Gordon v. State,
43 Tex. 330, 340; Henderson v. Beaton, 52 Tex 29,
60; Ex parte King,’ 35 Tex. 658.
II. . .
“Our Constitution, therefore, in declaring
that property shall be taxed where situated, has
done no more than declare the common-law rule.
“It did not define z what was meant by the
words where situated. Since It had reference to
the taxing power, It evidently meant property
where situated for the purposes of taxation
under the general principles of law as then under-
stood. ”
The court then reviewed the common law rule of “aobllia
sequuntur personam” and stated:
“Under the common law, mobilla sequuntur
peraonam was a we,ll-established maxim, and personal
property of every description was taxable only
at the domicile of Its owner, regardless of Its
actual location. This is still the basic prin-
ciple upon which the taxation of personal property
rests. 26 R.C.L. Section 241, pp. 273,274.”
However, there are certain exceptions to the “mobilla
sequuntur pc:rs.onRm” rule and the Texas Courts have approved
these exceptions. The Texas Su reme Court also stated In
the Great Southern case, ( suprap that:
“But even prior to the Revolution the principle
‘mobllla sequuntur personam’ had been abrogated to
the,extept that, as between different towns and
taxing districts, certain classes of tangible per-
sonal property had a taxable situs where employed
in business, regardless of the domicile of its
owner.” p. 781.
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Honorable W. E. Coats, Jr., Page 4 OPlnlon No. (CA32)
A more recent decision reaffirming this exception Is
State v. Crown Central Petroleum Corporation, 242 S.W.2d 457
(Tex.Civ.App. 1951, err. ref.), wherein the Court ruled:
“One exception to the rule that tangible per-
sonal property Is on& taxable In the county of the
residence of the o-r is that tangible personal
property, which by It6 character and concrete Porm
Is capable of having a value and an actual physical
sltus, may be taxed In the county where permanently
State v. Fidelity & Deposit Co. of
iE$t%, 35 Tex.Clv.App. 214, 80 S.W. 5d.”
Also, in the case of the City of Dallas vs. Overton,
363 S.W.2d.821 (Tex.Civ.App. 1962, err. ref. n.r.e.), the
Court wrote:
“Tangible persona1 property acquires tax t3itU6
In a jurisdiction apart from its owner if It is kept
there with sufficient permanency that It may fairly
be regarded as being a part of the general mass of
property within the jurisdiction.”
These exceptions have been recognized and propounded In
the following cases and authorities: Galveston v. Haden, 214
S.W. 766 (Tex.Clv.App. 1919, no writ h?
283 S.W. 548 (Tex.Clv.App. 1926, no-writ hi&T
Life Insurance v. City of Austin 108 T. 209, 19
Cooley on Taxation, Vol. 2 4th Edition, p. 975
General’s Opinion Noa. V-3+3, O-5632, O-3702 a
Thus, we see that there is much Texas authority for the
proposition that tangible personal property which ha$ acquired
an actual sltus of its own Is to be taxed at the place of Its
situs and not at the domicile of its owner.
In your opinion request, you state that a certain number
of trailers remain in Smith County at all times; which la tan-
tamount to a certain number b eing lralgned,to aith-.COpnOJi~
and that when the trailers are rented, they “may or may not”
be returned to Smith County.
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Honorable W. E. Coats, Jr., Page 5 Opinion No. (C- 432)
If all trailers which were rented in Smith County were
returned to Smith County when the lessee had finished, then,
unquestionably, all would be taxable in Smith County. Certainly,
those trailers which are assigned to Smith County for business
purposes~, rented there and returned there, would be taxable
there under the exception to the "mobilia secuuntur personam"
rule as recognized by the Texas Courts.
The fact that all of the specific trailers do not re-
turn to Smith County does not. preclude taxation by Smith
County. That certain number which has been permanently
assigned to Smith County by the corporation for business
usage there, can and has attained a degree of permanency
after that number has first been delivered to Smith County
and after that number Is shown to remain in Smith County for
legitimate business purposes. Although trailers are large
enough to be specifically identified, it should not be
forgotten that they are also so similar as to be susceptible
to treatment as funglble units, which Is exactly how the
corporation actually does treat them. Therefore, It is
possible ~for taxatlnn purposes, that even though certain
specific trailers do not remain in or return to Smith
County, that that certain number of trailers which have
been permanently assigned to Smith County for legitimate
business purposes and which have actually physically been
in Smith County, have acquired an rctmal situs there. Thus,
the U-Haul trailers are within the exception to the "mobllla
sequuntur personam" rule and are taxable in Smith County.
A necessary element of this opinion Is the determination
that the trailers have acquired 3 degree of permanency in
Smith County, thereby establishing their taxable situ8 there.
In theCity of Dallas v. Overton case, supra, the Court elsbo-
rated on the definition of "permanency";
"It Is clear that 'permanency' as used in this
connection does not convey the idea of the character-
istics of the permanency of real estate. It merely
involved the concept of being associated with the
general mass of property in the state, as contrasted
with the transient status--viz., likelihood of being
In one.state today and in another tomorrow. . . .
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Honorable W. E. Coats, Jr., Page 6 Opinion No. (C-432)
“Obviously the Courts do not construe the term
‘permanent’ to mean absolutely permanent, since
movable property is seldom absolutely permanent.
The question of whether or not the property in
question is 'more or less permanent’ as the term
is often utilized, depends on the factual situation
In each case as illustrated. . . .’ (.
The facts, as you have given, reflect that a certain
number of trailers are located within Smith County at all
times by the corporation for business usage. That certain
number which have actually, physically been located in Smith
County must now be regarded as being a part of the general
mass of the property within that jurisdiction, and in
accordance with the previously cited authorities, must have
consequently acquired a taxable sltus in Smith County. There
is no question but that some specific trailers are in a
transient status at all times in that they are likely to be
in Smith County today and in another county tomorrow. How-
ever,.when the facts are considered as a whole, it must be
remembered that those trailers which are removed from Smith
County and are not returned have been or will be replaced
by the company. Another factor for the determination that
a certain number of trailers have become a general mass of
the property within Smith County is the fact that that
certain number of trailers will remain in Smith County when
not in use. Smith County is their home base.
The fact that the Court, In the case of Fort Worth ‘v.
Southland~Greyhound Lines, Inc., 123 Tex. 13, b7 S.W.2d 354
(Tex.Civ.App. 1931, opinion approved by Tex.Com. of App. On
Certified Guestions) refuted the average number theory does not
conflict with our present determination, insofar as we are
not advocating an average number rule but are averring that
that certain number which has attained the necessary degree
of “permanency” are taxable In Smith County.
The finding that items of personal property can acquire
a tax situs away from the domicile of the owner, even though
no specific items can be shown to have acquired a permanent
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.
Honorable W. E. Coats, Jr., Page 7 Opinion No. (C-432)
relation to the tax situ8 is not ulthout authority. The
United Stats Supreme__. Court - held,
_ in the cnse of Braniff
Neoraska noara of Equalization ?%nses-
7 U S 5gC (lm that’regulariy bcneduled f’n-
esl’thounh not necessarilv the same individual
planes; were~sufficlent to establish a taxable nexus for
the airplanes to acquire a tax situs in Nebraska. The
principle was cited In Attorney General’s,Oplnion No. w-818
and was also Implied from the fact situation as given In
Attorney General’s Oplnion V-373. In V-373, the facts a-c
given were that Halliburton Oil Well Cementing Company
assigned two railroad cars to Hawkins, Texas, and thet the
number of’cars there at any given time would fluctuate ac-
cording to business needs. Our office ruled that the LO
hopper cars were taxable in the city to which they had been
assigned because they had acquired a business situ8 there
for taxation purposes.
At first glance, several Texas cases, Chemical Express v.
Roscoe 310 S.W. 691 (Tex.Clv.App. 1958, err. ref ) d Ft
&. Southland Greyhound, supra, might appear’to?e e
conflict with this opinion but careful study reveals other-
wise.
In the former case, the Court held that the trucks and
trailers of the corporation were not taxable In Hoscoe even
though they were physically ln that city on the taxable d:ite:;.
The Court’s opinion Is predicated upon the fact that no parti-
cular number of ,vehlcles were assigned to any particular
terminal and the location of vehicles away from the home
domicile depended exclusively upon business. In contrast,
the facts of the present situation are that a certain number
,of trallers,ls assigned to Smith County at all timea and
would remain there,even when they were not ln use.
The Court concluded, In the Roscoe case, that the facts
fell squarely within the holdings of the ca6es of Fort Worth
v. Southland Greyhound Lines, Inc., supra, and Guln XiX-3.F.
kailway Co. v. Dallas b S.W.2d 292 (Tex.Com.Apg- 9291
_ and
the terms of Article 7151. Vernon’; ‘Civil Statutes. a& that
the properties were only temporarily removed from the city of the
principal office or place of domicile. Our trailers are not
temporarily removed from Dallas County, but as the facts indicate
are permanently assigned to Smith County.
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Honorable W. E. Coats, Jr., Page 8 Opinion No. (C-432)
As the Court 'very ably stated In the Overton case, supra:
"A careful examination, of these authorities
clearly reveals'distlnguishing features. . . . In
the Southland Greyhound and Chemical Express cases,
the City was attempting to tax motor ~vehicles that
were only temporarily being kept wlthln its limits.
The courts correctly held that such property having
failed to acquire 'permanent' location apart from
its owner, had its tax situs at the owner's domicile."
A final exception to the common law rule of "mobllla
sequuntur personam" which must be considered Is the establlsh-
ment of a sltus for taxation purposes by leg'lslatlve enactment.
There Is no specific legislation determining the taxable situs
of trailers as there Is for the rolling stock of a railroad
comoanv. Article 7168. Vernon's Civil Statutes. In fact.
the holding of the case of Gulf, C and S.F. Railroad v. Dallas,-
supra, Is diatlngulshable because there is specific legislation
establishing the tax situs of all rolling stock of a railroad
at Its home-office in Texas or place of domicile.
Article 7153, Vernon's Civil Statutes, is also relevant
to the taxable situs of per6olal property. It states that:
"All property; real and personal, except such
as Is required to be listed and assessed otherwise,
shall be listed and assessed In the county where,lt
Is situated; and all personal property, subject to
taxation and temporarlly'removed from the state or
county, shall be listed and assessed In the county
of the residence of the owner thereof, or in the
county where the principal office of such owner
1s situated. Acts 1897, p. 2031 G.L. Vol. 10,
p. 125 7."
The Texas Courts have held~that the meaning of "where
it 1s situated" is the same as "where situated" In Article
VIII, Section 11, of the Texas Constitution. Fort Worth v.
Southland Greyhound, supra; Gulf C. & S.F. Railway Co. v.
Dallas, supra; Great Southern Life Ins. Co. v. Austin, supra;
andlveston v. Haden, supra. This statute does not provide
for anv excentlon to the "mobilla sesuuntur personam" rule or
its exieptio;ls.
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Honorable W. E. Coats, Jr., Page 9 Opinion No. (c-432)
As there is a taxable nexus between a certain number of
trailers assigned to Smith County and that certain number is
actually sent to Smith County for legltlmate business purposes,
then that number of trailers have attained an actual business
situs in Smith County and, therefore, under the recognized
exceptions to the "mobllia sequuntur personam" rule, are
taxable In Smith County.
SUMMARY
---e-m-
Under the stated facts, the situs of a certain
number of U-Haul trailers, for the purpose of ad
valorem taxation, is Smith County, Texas, the actual
business situs of the trailers.
Yours very truly,
WAGGONER CARR
Attorney Generelof Texas
HG,Jr.:sjl
APPROVED:
OPINION COMMITTEE:
W. V. Geppert, Chairman
Paul Phy
W. 0. Shultz
Hen Harrison
Stanton Stone
APPROVED
FOR THE ATTORNEY
GENERAL
BY: HAWTHORNEPHILLIPS
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