Abex Corporation v. Commissioner of Taxation

MacLaughlin, Justice.

The opinion filed on June 16, 1972, in this case is withdrawn and the following opinion is substituted in its place.

On petition of the commissioner of taxation, we issued a writ of certiorari to the Tax Court. The commissioner seeks review of a Tax Court decision determining that certain machinery qualifies for exemption from taxation pursuant to Minn. St. 1969, § 272.02(11) (b). We reverse.

*447On January 2, 1967, the county assessor of Lake County determined that for tax purposes the market value of certain property of respondent, Abex Corporation, in that county was $1,990,406, and that the assessed value was $210,097. Included in that determination was the machinery which is disputed in this case. In appropriate and timely proceedings, Abex contended before the commissioner of taxation that the assessed value should be substantially decreased because the machinery was personal property and, therefore, exempt under § 272.02(11) (b). The classification and assessment of the county assessor were approved by the commissioner. On appeal, the Tax Court reversed the order of the commissioner and held that the machinery was personal property and eligible for the exemption.

The question to be decided is whether certain machinery (hereafter disputed property), owned and used by Abex in its plant in Two Harbors, Minnesota, is real or personal property for purposes of the exemption found in § 272.02 (11) (b). The exemption statute, § 272.02, provided, in part, as follows:1

“All property described in this section to the extent herein limited shall be exempt from taxation:
* * * * *
(11) The taxpayer shall elect whether to be exempted with respect to category (a) or (b) as hereinafter defined.
*448(a) All inventories, stocks of merchandise of all sorts, manufacturers material, manufactured articles including the inventories of manufacturers, wholesalers, retailers and contractors;
(b) Tools and machinery which by law is considered as personal property used or useable in construction of buildings or highways or in the manufacture, processing, production, sale or distribution of marketable products * * (Italics supplied.)

Abex elected to exempt its “[t]ools and machinery which by law is considered as personal property.”

Minn. St. 1969, § 272.03, defined real and personal property as follows:

“Subdivision 1. For the purposes of taxation, ‘real property’ includes the land itself and all buildings, structures, and improvements or other fixtures on it, and all rights and privileges belonging or appertaining to it, and all mines, minerals, quarries, fossils, and trees on or under it.
“Subd. 2. For the purposes of taxation, ‘personal property’ includes:

(1) All goods, chattels, money and effects.” (Italics supplied.)

It should be noted that the definition of real property includes the term “fixtures” while there is no reference to fixturés in the definition of personal property. In a divided opinion the Tax Court held that the disputed property is personal property.

Abex Corporation owns and operates a foundry in Two Harbors, and the disputed property is used in that operation. The company produces wear-resistant components for taconité operations located on the Iron Eange. Abex purchased the land and building for approximately $225,000 from the Duluth, Mesabi, and Iron Eange Eailroad. The building is generally one story, but the roof arches to a height of four stories at the center. The dimensions of the building are 275 feet by 300 feet, and it is *449about 80,000 square feet in area. Subsequent to the acquisition of the building, Abex spent about $242,000 in modification of the building, consisting mainly of additional service equipment such as water lines used for production, sanitary, and fire protection purposes; a gas line used in connection with the treating furnaces; and certain electrical power equipment.

A large amount of machinery usable in the operation of a foundry was acquired by Abex for use in the building. In one corner of the building it was necessary to go through the roof to accommodate some of the larger pieces of machinery. That particular corner of the building is approximately seven stories high because of the structural change.

A brief description of some of the largest items of the disputed property is helpful in analyzing and deciding the issues in this case.

a. There is a bond system which consists of three storage tanks with a pneumatic transport system for unloading and storing rail-car quantities of additives used in moldings. Each storage tank weighs 20,000 pounds and is bolted to the realty.

b. There are two shakeout systems with certain related equipment. A shakeout is a vibrating deck upon which the poured molds with the castings are placed. A conveyor system is located below the shakeout, and a dust collector is necessary to pull the smoke and dust created by the vibration outside the plant. Both systems and all related equipment in dispute weigh 113,000 pounds, and all items are bolted either to the realty or to the supports.

c. There is a so-called “Eddystone Sand System” consisting of a batch sand preparation system, including an elevator, overhead storage bins, weigh hoppers, sand mullers, sand mixers, and a discharge conveyor. The system is 50 feet in height and rises above the roof of the plant. Structural steel was erected to form a cupola over the building to house the top of the system. The entire system weighs 633,970 pounds and is bolted to the realty.

*450d. There are two electric furnaces and transformers. These are 3-phase electric-arc furnaces, each with its own transformer. The 8-foot furnace weighs 20,000 pounds, and the 9-foot furnace weighs 30,000 pounds. Each transformer weighs 60,000 pounds. The furnaces are bolted to the realty and the transformers are freestanding.

e. There are three heat-treat furnaces. They are gas-fired, car-bottom furnaces used to anneal and stress-relieve the castings. Each furnace weighs 40,000 pounds and is bolted to the floor.

f. There is a press used to straighten castings or correct distortion due to heat treatment or to mismolding during the operation. The press weighs 70,000 pounds and is bolted to the floor.

g. There is a vertical boring mill used on machine castings. It weighs 40,000 pounds and is bolted to the floor.

The disputed property in the case apparently has a total market value of approximately $1,295,420.

Because of the Tax Reform and Relief Act of 1967, Ex. Sess. L. 1967, c. 32, the commissioner of taxation, local tax assessors, and those in their employ have been required to draw distinctions between personal property and real property. Prior to the passage of that act the distinction was not important, except as it affected the legal remedy available for collecting delinquent taxes, because all “machinery, whether fixtures or otherwise,” was valued, assessed, and taxed at one-third of its full and true value pursuant to Minn. St. 1965, § 273.13, subd. 4. Therefore, prior to the 1967 act, all machinery, whether a fixture or personal property, was valued, assessed, and taxed at one-third of full and true value.

In 1967, § 272.02(11) (b) was enacted. Ex. Sess. L. 1967, c. 32, art. IV, § 2. It exempted either inventories or “[t]ools and machinery which by law is considered as personal property used or useable * * * in the manufacture * * * of marketable *451products.” It then became necessary for tax assessors to determine whether specific items of tools and machinery were personal property, and therefore exempt, or were fixtures, and therefore not exempt.

The following is a summary of the statutory provisions in effect at the times pertinent to the decision in this case.

a. Section 272.02(11) (b) exempted, upon election of the taxpayer, tools and machinery which by law were considered as personal property.

b. Section 272.03, subd. 1, defined real property for purposes of taxation as “the land itself and all buildings, structures, and improvements or other fixtures on it * * *.”

c. Section 272.03, subd. 2(1), defined personal property for purposes of taxation as including “[a] 11 goods, chattels, money and effects.”

The Tax Court found that the disputed property was exempt under § 272.02(11) (b). That necessarily means that the Tax Court found the property to be “machinery which by law is considered as personal property.” Personal property is defined as “goods, chattels, money and effects.” Thus, implicit in the Tax Court’s opinion is the finding that the disputed property is within the terms “goods, chattels * * * and effects.”

A statute creating an exemption from taxation must be strictly construed, the presumption is against the exemption, and the burden of proof is on the one seeking the exemption to establish that he is entitled to it.

In Ramaley v. City of St. Paul, 226 Minn. 406, 412, 33 N. W. 2d 19, 23 (1948), we said:

“* * * Exemptions from taxation will not be presumed, but must be established by clear and express language, and all presumptions are against an exemption.”

Camping and Education Foundation v. State, 282 Minn. 245, 250, 164 N. W. 2d 369, 372 (1969), stated:

“There are certain general rules which have been long estab*452lished relating to statutes and constitutional provisions providing for exemption from taxes. The basis for all tax exemption is the accomplishment of some public purpose as opposed to favoring of particular persons or corporations at the expense of the taxpayers generally. State v. Board of Foreign Missions of Augustana Synod, 221 Minn. 536, 22 N. W. (2d) 642 [1946]. Accord, State v. Ritschel, 220 Minn. 578, 20 N. W. (2d) 673, 168 A. L. R. 274 [1945] ; State v. Northwestern Preparatory School, 249 Minn. 552, 83 N. W. (2d) 242 [1957] ; State v. Northwestern Vocational Institute, Inc. 232 Minn. 377, 45 N. W. (2d) 653 [1951].
“One of the rules that is well established is that taxation is the rule and exemption is an exception in derogation of equal rights. Therefore, there is a presumption that all property is taxable. In consequence, the burden of proof is on the one seeking the exemption to establish that he is entitled to the exemption. See, In re Junior Achievement of Greater Minneapolis, Inc. 271 Minn. 385, 135 N. W. (2d) 881 [1965] ; Christian Business Men’s Committee v. State, 228 Minn. 549, 38 N. W. (2d) 803 [1949] ; American Ry. Exp. Co. v. Holm, 169 Minn. 323, 211 N. W. 467 [1926].
“Another long-established rule is that exemption provisions are to be strictly construed. See, Ramaley v. City of St. Paul, 226 Minn. 406, 33 N. W. (2d) 19 [1948]. See, also, St. Peter’s Church v. County of Scott, 12 Minn. 280 (395) [1867] ; County of Hennepin v. Bell, 43 Minn. 344, 45 N. W. 615 [1890]; County of Ramsey v. Church of the Good Shepherd, 45 Minn. 229, 47 N. W. 783, 11 A. L. R. 175 [1891].”

Section 272.02(11) (b) exempts machinery which by law is considered personal property. As we have said, the tax statute’s definition of real property includes “fixtures” while its definition of personal property omits “fixtures.” Therefore, if the disputed property is included in the category of fixtures, it is not exempt from taxation.

Defining a fixture for purposes of taxation is a matter of first *453impression in Minnesota. No cases have been found distinguishing personal and real property for this purpose. Both parties recognize that the question of whether property is personal or has become part of the real estate as a fixture has been decided in many different ways under many different circumstances and that each decision must turn on its own peculiar facts and circumstances, including the purpose for making the distinction. It must be borne closely in mind that the sole purpose in making the distinction herein is to determine whether certain property is exempt from taxation under the applicable statutes and for no other reason.

Because of the uniqueness of the question before us, the previous case law is not necessarily determinative. However, certain cases are helpful and instructive in reaching our decision. The leading Minnesota case on the distinction between personal property and fixtures is Wolford v. Baxter, 33 Minn. 12, 21 N. W. 744 (1884). In that case, the plaintiff, a mortgagee, wished to restrain the defendant from impairing his security by removing from a brewery some large casks, fermenting tubs, and coolers, which defendant claimed were chattels and thus removable. In holding the items to be personal property, this court, speaking through Mr. Justice William Mitchell, stated (33 Minn. 17, 21 N. W. 745):

“* * * [T]o constitute a fixture, the thing must be of an accessory character, and must be in some way in actual or constructive union with the principal subject, and not merely brought upon it; that in determining whether the article is personal property, or has become a part of the realty, there should be considered the fact and character of annexation, the nature of the thing annexed, the adaptability of the thing to the use of the land, the intent of the party in making the annexation, the end sought by annexation, and the relation of the party making it to the freehold. * * * Ponderous articles, although only annexed to the land by the force of gravitation, if placed there with the *454manifest intent that they shall permanently remain, may be fixtures.” (Italics supplied.)

In Pond Machine Tool Co. v. Robinson, 38 Minn. 272, 37 N. W. 99 (1888), the court considered whether an iron planer in a machine shop was subject to a mechanics lien. Our court held that the mechanics lien statute subjected the shop to a lien because the machine was a fixture. The court wrote (38 Minn. 275, 37 N. W. 101):

“The evidence shows that the Pray Company were in need of such a machine for use in the business of their shop. * * * It was accordingly set up in the machine-shop in a place prepared for it, and properly adjusted so as to run and be operated in connection with the other machinery in the shop. It was an enormous planer, of many tons’ weight, and needs no supports other than the foundation prepared for it. It is found that in order to set up the machine it was necessary to cut pits in the floor for the gearing. It is not bolted down, but is held in its place by its own weight, — 76,000 pounds. The building in which it was placed was specially constructed for a machine-shop, 200 feet long and 50 feet wide., and had a large amount of machinery in it specially for that business. * * * It was intended for permanent use in the shop in the business of the company, and was accessory to it and a necessary supplement to the other machinery. * * * The machine was properly designated as a fixture in the shop, such as to subject the latter to a lien * * (Italics supplied.)

Shepard v. Blossom, 66 Minn. 421, 69 N. W. 221 (1896), involved the question of whether certain machinery2 constituted fixtures as between mortgagors and a mortgagee. The court found the machinery to be fixtures and said (66 Minn. 423, 69 N.W.222):

“It sufficiently appears that the buildings were constructed *455for the special purpose for which they were used, that the machinery was all placed in them for the same purpose, and that the whole forms one entire plant. Then the intention to make the machinery a permanent part of the plant sufficiently appears. But, as held in Farmers’ Loan & Trust Co. v. Minneapolis Engine and M. Works, 35 Minn. 543, 29 N. W. 349 [1886], placing the machinery in position in the building with the intention of making it a permanent part of the plant is not sufficient to make such machinery a part of the realty, unless it is actually or constructively attached to the building or land. * * *
“* * * We are of the opinion that the finding that these machines are a part of the realty should be sustained. As said in Wolford v. Baxter, supra, ‘Ponderous articles, although only annexed to the land by the force of gravitation, if placed there with manifest intent that they shall permanently remain, may be fixtures.’ ”

Abex urges that the Shepard and Pond Machine Tool Co. cases involve special-purpose buildings and should be distinguished for that reason. It may be noted parenthetically that the records in those cases disclose that most of the several buildings involved appear to have been suitable for other purposes. Further, the building involved herein could arguably be considered a special-purpose building because of the large amount of money expended to fit it out for the purposes of a foundry. However, those observations are unnecessary because we do not believe the distinction between special- and general-purpose buildings should be controlling in determining whether the Abex machines are fixtures for the purpose of taxation.

The Wolford, Shepard, and Pond Machine Tool Co. cases point to the conclusion that the disputed property is taxable as fixtures. The cases indicate:

(a) To be a fixture, the property must be annexed in either an actual or a constructive manner. An object is constructively annexed where (1) it has been physically annexed but may be *456separated for a temporary purpose, e.g., for repair; or (2) although never physically annexed, the object is an essential part of something that is annexed, e.g., keys in a door; or (3) the object is ponderous and annexed to the land only by force of gravitation. In this case there is actual annexation as to some items and constructive annexation as to others, but all items are ponderous, a characteristic which we deem essential to constitute this machinery taxable fixtures under § 272.03, subd. 1.

(b) There must also be an intent to make the property a permanent accession to the freehold. This intent may be evidenced by an expressed declaration or it may be implied. When considering the intent test, we have in mind that this case requires us to classify the machinery as personalty or realty for determining the existence of an exemption from taxation under § 272.02 (11) (b). For this purpose, the requisite intent, i.e., intent to make a permanent accession to the freehold, can be more accurately stated as intent to make a nontemporary accession. The effect of this is to classify as fixtures those objects which are annexed but which are not obviously temporary accessions nor obviously permanent accessions. Stated in other terms, there are three categories of property for these purposes: (1) Annexed property which is a temporary accession to the freehold; (2) annexed property, such as heating and utility equipment, which is an obviously permanent accession and which serves the freehold rather than the business conducted in it; and (3) annexed property wherein the intent is to make a nontemporary accession to the freehold, e.g., the disputed property involved in this case. Although the fixture cases speak of a “permanent” accession, we believe our requirement of intent to make a “nontemporary” accession is reasonable in this tax exemption case for three reasons: (1) Expediency requires that tax assessors cannot be expected to make daily interpretations in the gray area between “temporary” and “permanent,” (2) permanence must be distinguished from perpetuity, and (3) tax exemption statutes must be strictly construed.

*457Among other things, the fact and character of the annexation and the nature of the annexed property itself should be considered in determining whether there is intent to make a nontemporary accession to the freehold. Thus, the fact that machinery is ponderous, whether or not it is physically affixed to the realty, is an essential element tending to imply an intent to make a non-temporary accession to the freehold. In the instant case, the machines are huge and ponderous, and most are actually attached to the freehold. Another indication of intent to make a nontemporary accession is that, at the time of annexation, the annexed machinery is necessary to the continuing operation of the particular business for which the building is used and has been installed for use in the building for the remaining useful life of the machinery or until, for some unforeseen reason, a change in the use of the building itself occurs. In this case, it appears obvious from observation and other objective evidence that the machines were necessary to the continuing operation of the foundry, were installed for use in the building for their remaining useful life, and were not intended to be taken out and used elsewhere unless by reason of some unexpected change in the use of the building.

The fact that the machinery is ponderous is probably not enough by itself to warrant an implication of the requisite intent. Likewise, the facts that the machinery is necessary to the continuing operation of the particular business for which it is used and has been installed for use in the building for its remaining useful life or until the use of the building unexpectedly changes are alone insufficient to imply intent to make a nontemporary accession. All of these facts taken together, however, clearly imply the requisite intent. The courts and the taxing authorities may reasonably assume that ponderous machinery, which by objective evidence is necessary to the continuing operation of the particular business for which the building is used, and which has been installed for use in the building for its remaining useful life and is not to be removed absent some unforeseen change in the *458building’s use, has been installed with the intent to make a non-temporary accession to the freehold. The burden of proof is upon the taxpayer to show otherwise.3 In this case both the factor of annexation and the factor of intent are present to establish a fixture for the purpose of taxation.

The Tax Court placed great weight on the doctrine of “trade fixtures.” The following is from the memorandum of the Tax Court:

“There is no doubt that, as between landlord and tenant, (unless a contrary intention appeared from the agreement between them) all of the items here in question would be considered trade fixtures and would be removable by the tenant during the continuance of the lease. * * * From this it logically follows that if the appellant had leased the premises and had installed the disputed property on the same premises, they could not have been taxed to the landlord. The taxing authorities would have had to tax them as personal property.
“The legislature could hardly have intended to tax trade fixtures as real property if they were owned by the owner of the fee and not to tax them as such if they were owned by the tenant. This would be entirely illogical and hence we have reached a conclusion that the word ‘fixtures’ in M.S.A. 272.03 does not include ‘trade fixtures’.”

This court has stated that the trade-fixtures doctrine applies only in a landlord-tenant relationship. Willcox Boiler Co. v. Messier, 211 Minn. 304, 1 N. W. 2d 130 (1941).4

*459In Northwestern Lbr. & Wrecking Co. v. Parker, 125 Minn. 107, 111, 145 N. W. 964, 965 (1914), we said:

“When the question arises between landlord and tenant, different considerations enter into the case. Modern decisions have ingrafted on the law of fixtures an exception, due to the growing necessities of trade, that certain articles ordinarily fixtures, attached by a tenant for trade purposes, may be removed during the tenancy. Such articles are known as ‘trade fixtures.’ ” (Italics supplied.)

The tax statutes involved draw no distinction between fixtures installed by a landlord, a tenant, or an owner-operator. The statute states that fixtures are real property for purposes of taxation, and there is no differentiation between trade fixtures and other fixtures. An article of property is taxable if it is a fixture as defined in this opinion, even though it may be a “trade fixture” as between the landlord and tenant.

Several comments are necessary in response to the dissenting opinion:

(a) Support for exemption is claimed in a recent amendment to the statute defining real property. In 1971, Minn. St. 1969, § 272.03, subd. 1, was amended by Ex. Sess. L. 1971, c. 31, art. XVII, § 1, to read, in part, as follows:

“A building or structure shall include the building or structure itself, together with all improvements or fixtures annexed to the building or structure, which are integrated with and of permanent benefit to the building or structure, regardless of the present use of the building, and which cannot be removed without substantial damage to itself or to the building or structure.”

The dissent states that “the legislature amended the statute merely to clarify what they had meant originally rather than to change its former meaning.”

*460We cannot regard that assertion as other than a mere conclusion which is unsupported by any evidence of legislative intent. Certain trial court decisions are also cited. Those decisions are not helpful in determining legislative intent. It is also impossible to ascertain from any legislative history what was intended by the legislature when this change was made.

It should be noted that the definition of real property was also amended in a previous omnibus tax bill passed by the legislature but vetoed by the governor on August 3, 1971.5 As indicated in the dissent, the veto had nothing whatsoever to do with the redefinition of real estate but was because the bill, in the opinion of the governor, did not provide sufficient tax relief for individuals and farmers.

The definition of real estate in the vetoed bill contained the following:

“Huge and ponderous machinery or equipment, whether or not located in a structure, shall be considered a fixture to real estate if it is installed or affixed to a structure in such a manner as to create a permanent or semi-permanent installation, or is installed with the intention of remaining on the real estate for the useful life of the machinery or equipment.” Journal of the House, Ex. Sess. 1971, p. 427.

Obviously, the definition in the bill passed by the legislature but vetoed by the governor is somewhat similar to the result reached by us in this case. It is interesting to speculate whether, had the vetoed bill been signed by the governor, the dissent would make the same assertion that this definition was intended to clarify rather than to change the meaning of real estate as used in the statute.

It is obvious that the change in the definition statute is not helpful. Moreover, since it is not before us, the change should not be considered by us until it is here in a proper setting for our decision.

*461(b) Reliance is placed by the dissent on the use of the word “other” before fixtures in the definition of real property. Its use does not support the dissent’s conclusion that the term “other fixtures” includes only those fixtures which have the same character of permanence as buildings, structures, and improvements. Brooklyn Edison Co. Inc. v. Davidson, 269 N. Y. 48, 198 N. E. 627 (1935), is cited by the dissent. In that case, the statute authorized an electric corporation “to lay, erect and construct suitable wires or other conductors, with the necessary poles, pipes or other fixtures in, on, over and under the streets.” (Italics in original.) 269 N. Y. 50, 198 N. E. 628. The court held that a transformer was not within “other fixtures” because its primary purpose was not to conduct electricity. The statute’s use of the word “necessary” makes it clearly distinguishable from the present statute. Also cited is Russell v. Golden Rule Min. Co. 63 Ariz. 11, 159 P. 2d 776 (1945), where a contract involving mining claims provided that “timbering, ladders, pipe lines, gravity water development and buildings, and other permanent improvements” must remain on certain realty. 63 Ariz. 18, 159 P. 2d 779. The court held that certain contested machinery was not within the term “other permanent improvements.” The court was aided in its decision by the agreement of the parties in other related contracts which clearly indicated that all machinery could be removed. Therefore, this case is also distinguishable.

In the statute here in question, the meaning of “other” is equivocal. However, limiting “other fixtures” to the meaning of “improvements,” as the dissent advocates, would render “other fixtures” meaningless. Therefore, it seems clear that the legislature intended, in its use of the term “fixtures,” to include within the definition of real estate something other than “improvements.”

(c) The dissent quotes from Transport Leasing Corp. v. State, 294 Minn. 134, 137, 199 N. W. 2d 817, 819 (1972), as follows:

“Our interpretation of the statute [the exemption statute in*462volved herein] is consistent with the legislative objective. The state concedes that a major objective of the statute was to relieve industry of burdensome personal property taxes as a stimulus to economic activity and employment opportunity.”

The question in the Transport Leasing Corporation case was whether certain uncontestedly personal property qualified for the tax exemption under § 272.02(11) (b) where the personal property, certain tools and machinery, was owned by the taxpayer but leased to another. The lessee used the personal property for purposes declared exempt by the statute. We had no difficulty in holding that the exemption would apply to leased personal property as well as to personal property owned and used by the taxpayer. There is no question that the legislature intended to exempt personal property from taxation. The question in this case, however, is whether certain property is real property or personal property, not whether personal property is entitled to the exemption. The limitation of the exemption to tools and machinery which are personal property makes it clear that the legislature did not intend to exempt all machinery. If the legislature had intended to exempt property of the type involved here, it would not have limited the exemption to “[t]ools and machinery which by law is considered as personal property” and would not have referred to fixtures in its definition of real property. Under these circumstances, we believe our decision herein is entirely consistent with the Transport Leasing case.

We can find no support in the record for the assertion that this opinion results in minimal tax relief for Abex. In addition to the property conceded by the commissioner to be personal property prior to and on this appeal, it is highly probable that Abex owns machinery which is clearly personal property and which has not been disputed at any time by the commissioner. The legislature exempted only those tools and machinery which by law are considered to be personal property, and it included fixtures within the definition of taxable real property. If Abex is left with considerable machinery which is taxable, it is due *463to statutory limitations and definitions and not because of this opinion. Furthermore, if certain industries receive greater relief than other industries, that also is a result of the legislative enactments which we are bound to follow. Undoubtedly, inequities will result under any interpretation. It is obviously very difficult for the legislature to enact legislation which affords all industries substantially the same degree of tax relief.

(d) It is argued that since Black, Law Dictionary (4 ed.) p. 605, includes “fixtures” in its definition of “effects,” a fixture is personal property for tax purposes. This is a slim reed on which to base such a conclusion for it is more than overcome by the express inclusion of fixtures in the statutory definition of real property. It should be noted that Black’s dictionary also includes all “real and personal” property in its definition of effects. The dissent’s argument, carried to its logical end, would include all “real and personal” property in the definition of personal property and would thus erase the statutory distinction between real and personal property.

(e) We feel constrained to point out that the statement in the dissent that “[i]t has been the long-continued practice of county assessors to list heavy machinery as personal property” is unsupported by the evidence. The 1964 tax bulletin of the commissioner of taxation, Minn. Property Tax Bull., Vol. 2, No. 2 (Feb. 1964), intended to assist assessors in classifying property and referred to in the dissenting opinion, is probably the best evidence that assessors have been aware for some time of the necessity to classify so-called “attached machinery” separately from personal property. That bulletin states in part as follows:

“One of the most difficult areas of classification is to distinguish between machinery that is an integrated part of a building, machinery that is attached to real estate6 and that which should *464be listed as personal property.
“We have noted that there has been wide diversity in the classification of attached equipment * * *.
“The general rule that should be followed in determining classification is as follows: Any equipment that is an integrated part of a building should be included in the valuation of the building. This should include equipment permanently installed and auxiliary to the purpose of the building, such as escalators, elevators, heating, ventilation and air conditioning plants, sprinkler systems and plumbing and electrical installations.
‡ * * * *
“* * * The general rule to be applied in determining whether equipment is attached machinery is as follows: Although the machinery may be more or less permanently located within the structure, it is not a part of the structural facilities but constitutes a part of the production, processing or service function which takes place within the building.
“Rules to be followed in classifying equipment as personal property are as follows: [I]t is equipment that is not bolted down or affixed, it is not attached with piping or other connecting apparatus, it can be removed without damage to itself, its removal does not affect the use of installed machines, it can ordinarily be moved from place to place as it is used.” (Italics supplied.)

There is no evidence to support the belief that, prior to 1967, machinery of the type contested here was viewed by assessors as personal rather than real property for purposes of taxation. In any event, as previously stated, the distinction between fixtures and personal property was not significant for purposes of valuation, assessment, and taxation (as distinguished from the legal remedies available for the collection of taxes) until the passage of the Tax Reform and Relief Act of 1967, Ex. Sess. L. 1967, c. 32. This was true because tools and machinery, “whether *465fixtures or otherwise,” were in the same classification for tax purposes. Minn. St. 1965, § 273.13, subd. 4.

It should also be noted that in State v. Clarkson Coal & Dock Co. 188 Minn. 106, 246 N. W. 538 (1933), cited by the dissent, the question of whether the property was personal or real was not in issue. Further, whether the property was personal or real in no way determined the basis upon which proper assessment should be made. In Borgelt v. City of Minneapolis, 271 Minn. 249, 135 N. W. 2d 438 (1965), also cited by the dissent, an asphalt mixing plant was described as personal property. A case involving an asphalt mixing plant, Midwest Asphalt Corp. v. County of Ramsey, Supreme Court File No. 43501, is pending in this court at the present time, so extended comment is inappropriate. However, it is worth noting that the evidence in that pending case shows that asphalt mixing plants, while ponderous, are specifically designed and intended to be moved from place to place as asphalt is needed for various jobs, and that such plants are in fact moved as needed. Clearly, the fact situation presented in that case is entirely different from the one presented here.

(f) We have considered and declined to follow certain Ohio cases cited by Abex, such as Zangerle v. Standard Oil Co. 144 Ohio St. 506, 60 N. E. 2d 52 (1945). The Zangerle case is quoted by the dissent to support the contention that an article of property is a fixture only when usable by any occupant of the freehold regardless of what business is being conducted on the premises, and that property is not a fixture if it is devoted primarily to the business conducted on the premises.7 It is worth noting, however, that the Ohio cases do not involve the definition of a fixture for taxation purposes under a specific statute such as *466is involved here. Those eases are also not consistent with other authority. For example, 35 Am. Jur. 2d, Fixtures, § 101, states:

«* * * [M]aehinery introduced upon the realty as a permanent accession in order to carry on the business for which the realty is used becomes a fixture and part of the realty upon being installed.”

In Wolford v. Baxter, 33 Minn. 12, 17, 21 N. W. 744 (1884), Mr. Justice Mitchell said:

“It has often been remarked that the law of ‘fixtures’ is one of the most uncertain titles in the entire body of jurisprudence. The lines between personal property and fixtures is often so close and so nicely drawn that no precise and fixed rule can be laid down to control all cases. It is difficult, if not impossible, to give a definition of the term which may be regarded of universal application. Each case must be more or less dependent upon its own peculiar facts.”

Both parties have artfully and vigorously argued their respective positions on a novel and difficult question. In arriving at our decision, we are mindful that exemptions from taxation are to be strictly construed, that the burden of proof is upon the one seeking the exemption, and that in ascertaining its intention the legislature has directed us that “[t]he legislature intends to favor the public interest as against any private interest.” Minn. St. 645.17(5).

It is our judgment that the legislature intended the disputed property to be fixtures for purposes of taxation. Property which (a) is ponderous and therefore annexed to real estate, whether or not actually attached and (b) has been annexed with the intent to make a nontemporary accession to the freehold, is a fixture within the meaning of Minn. St. 1969, § 272.03, subd. 1. Here, annexation is present because the machinery is ponderous.8 Intent to make a nontemporary accession can be implied *467because the machinery is ponderous, is necessary to the continuing operation of the foundry, and has been installed in the building for the remaining useful life of the machinery or until the use of the building unexpectedly changes. Thus, since the machines are fixtures within the meaning of § 272.03, subd. 1, and are not personal property, they are not exempt from taxation under Minn. St. 1969, § 272.02(11) (b).

The decision of the Tax Court is reversed.

The exemption statute was amended by Ex. Sess. L. 1971, c. 31, art. XXII, § 3. Minn. St. 272.02, subd. 1(11), now provides: “The taxpayer shall be exempted with respect to, all agricultural products, inventories, stocks of merchandise of all sorts, all materials, parts and supplies, furniture and equipment, manufacturers material, manufactured articles including the inventories of manufacturers, wholesalers, retailers and contractors; and the furnishings of a room or apartment in a hotel, rooming house, tourist court, motel or trailer camp, tools and machinery which by law are considered as personal property, except personal property which is part of an electric generating, transmission, or distribution system or a pipeline system transporting or distributing water, gas, or petroleum products.”

The machinery included emery grinders, sawing machines, molding machines, planers, jointers, mortising machines, turning lathes, and polishing machines. All were found to be fixtures.

For example, if Abex were to install a ponderous machine for a 1-month special run only, intending to remove it after the special run, it would not be a fixture, even though it might be firmly bolted to the floor. Of course, Abex, as taxpayer, would bear the burden of establishing that fact.

Willcox Boiler Co. v. Messier, 211 Minn. 304, 1 N. W. 2d 130 (1941), also makes clear that the dissent’s reliance upon White Enamel Refrigerator Co. v. Kruse, 121 Minn. 479, 140 N. W. 114 (1913), is misplaced. The Kruse case is clearly limited to landlord-tenant situations. In Willcox, we stated that, if the refrigerator in the Kruse case had *459been installed in the same manner by the owner of the premises instead of by a tenant, it would have been held lienable (and, therefore, a fixture). 211 Minn. 307,1 N. W. 2d 132.

Journal of the House, Ex. Sess. 1971, pp. 357, 427, 433, 438, 471.

The terminology “machinery that is attached to real estate” is used by the commissioner to refer to property which is not an integrated part of the building such as electric utilities but which is also not personal property — in other words, the type of fixtures which are involved in this appeal.

On this point there is an apparent inconsistency in the dissenting opinion. For example, the dissent seems to approve the concession by Abex that “the dust control sludge disposal system, the three concrete silos for sand storage, and the quench tank” are fixtures for tax purposes. These items are obviously devoted primarily to the business which is being conducted on the premises and could not be used by any occupant of the freehold.

All machinery here in dispute weighs 2,500 pounds or more. For purposes of our holding herein and based upon the record before us, *4672,500 pounds appears to be a reasonable lower limit on ponderousness for the disputed foundry machinery here in question. If a more precise definition of “ponderousness” is necessary for other contested machinery, it should be determined in appropriate administrative proceedings by the commissioner. Machines as light as 500 pounds were in dispute before the Tax Court, but they were conceded before this court by the commissioner to be exempt personalty. In no way do we imply that machines weighing less than 2,500 pounds are ponderous.