Hon. C I J. Wilde               Opinion No. o-3672
County .Auditor                 Re: Taxable situs of oil and oil
Nuece s County                  products stored in Nueces County
Corpus Christi,   Texas         awaiting transportation or proces-
                                sing.
            This is in answer to your inquiry concerning                the
right of the state of Texas and Nueces County to assess                 and
levy ad valorem taxes against certain crude oil and oil                 prod-
ucts, which inquiry reads as follows:
            “There are vast quantities   of oil,   or oil
     products,   stored in Nueces County.    This oil and
     oil product’s may be classified   as follows:
            “1.  Oil produced in Nueces County and stored
     in lease storage awaiting transportation  to concen-
     tration points.
              “2, Oil produced       in Nueces County and stored
     at concentration   points       in Nueces County awaiting
     el.ther:
            a.    Transportation
            b,    Facilities   for refining.
            “3. Oil produced in the state              of Texas and
     transported to concentration  storage             in Nueces
     County, and awaiting either:
            a.    Transportation
            b..   Facilities for refining.
            ‘!4. Oil produced outside             the state of Texas
     and transported  to concentration             storage in Maces
     County awaiting either:
            a.    Transportation
            b.    Facilities   for    refining.
            llse Refined products stored             in Nueces County
     processed from each classification              above Itemized.
Han, Co J. Wilde,   Caunty Auditor,    page 2   (0-3672)


             “The owners of such oil are failing   and
     refusing to render the same for taxation,     as-
     serting as a basis for such failure    or refusal
     tha.t the oil is in Interstate  Commerce, and as
     such is not subject to taxation in either
     Nueces County or the state of Texas.”
           Your inquiry involves first,   the right of the state
of Texas to tax said property,  and second, whether said property
is taxable in Nueces County or some other Texas County in the
event it is taxabla in Texas.
              It will be impossible    for us to answer your questions
categorically    because they each involve a question of fact as
to whether the property has come to rest within this state or is
in transit,    and we do not have all of the facts surrounding the
transactions    on which your questions are asked.       A final deci-
sion of your questions,     by lawsuit or otherwise      calls for an ex-
amination of all of the facts,      incl,uding the nat ure and composi-
tion of the products,    their origin,     the route they followed,    the
reasons for thelr stay in Nueces County, their length of stay,
the method of their processing      and manufacture, their destina-
tion, and their various changes of ownership.          If the final de-
cision of your questions should be by lawsuit it is possible           that
some parts of the questions would be decided by a jury; and no
human can anticipate    with any degree of certainty what a jury will
do. Therefore,     we can only answer your questions by stating the
general rules that control in the situations         about which you ask,
              In determining the right of the State of Texas to tax
said property, we are confronted with two related problems:
?i..rst, whether or not the oil and refined products are in transit
in interstate    commerce, and second, whether or not the cril and
refined products have acquired a taxable situs in Texas, but this
latter   problem only arises when the owner is domiciled outside
of the state.
              On this first problem, which concerns interstate com-
merce we find statements in 1 COOLEYON TAXATION, Fourth ,Edition,
as fo i lows:
               “A tax on property in transit   from one state
      to another is invalid because an illegal        burden on
      interstate    commerce; and this is so although the
      articles    taxed belong to citizens   of the taxing
      state.     This includes oil in transit    through pipe
      lines,    and sheep being driven through a state to
      another state.”      (1 COOLEYON TA;CATION,Fourth Edi-.
      tion, 816.1
.   .



        Bon. C. J. Wilde,    page 3   (0-3672)


                     "What is the rule where the property is tem-
             porarily   at rest?    May the state where it then is
             tax it although it is the intention      of the owner to
             remove the property to another state in the near
             future?    The gener,al rule is that property tempor-
             arily at rest is taxable,     as where the transit has
             been interrupted     and the property is held in storage
             or at distributing     points to be delivered to buyers
             or reshipped to other places.       Merchandise may cease
             to be interstate     commerce at an intermediate  point
             between the place of shipment and ultimate destina-
             tion, and if kept at such point for the use and
             profit   of the owners and under the protection    of the
             laws of the state, it becomes subject to the taxing
             power of the state. ***.N       (1 COLLEYON TAKATION,
             Fourth,Edition,     821).
                      !?Lere have been several tax cases involving        the'move-
        ment of oilfrom       one 'state to another, but it is difficult       to
        arrive at a rule that can be applied to every fact situation.
        "Whether commerae is interstate        or intrastate    is a practical
        question to be determined by the facts of the particular             case."
        35 RARV,ARD   LAWREVIEW620. In the case of PRAIRIE OIL & GAS
        COMPANY    v. ERRARDT,244 Ill.     634 91 N&. 680, it was held,that
        the interstate      commerce clause o h the Federal Constitution       pro-
        hibited a state from levying ad valorem taxes against oil that
        was being moved from the state of Kansas to the state of Indi-
        ana through a pipe line, even though some of the oil accumu-
        lated and stayed for several days in working tanks at the pump-
        ing stations     along the line by virtue of the oil not moving
        fast enough through sections of the line.            In the case of STATE
        v. EMPIREOIL & REFININGCOMPANY,171 Okla, 138, 4 Pac. (2d)
        127, it was also held that oil moving continuously           through a
        pipe line from one state to another was not subject to state
        ad valorem taxes.,       One of the leading cases on the question is
        the case of CARSONPETROLEUM        COMPANY   v. VIAL 279 U.S. 95, 73
        L.Ed. 626, 49 S.Ct., 292, in which it was heid that oil in
        tanks in, a seaport in Louisiana that had been brought from oth-
        er states to that port for the sole purpose of export by ships
        to foreign     countries   and which was being held in said tanks for
        the purpose of allowing enough to accumulate to make a shipload
        or until a ship arrived to load the same was not subject to
         state ad valorem taxes because the storage of the oil in said
        tanks was part of a continuous interstate          and foreign shipment.
         A different    conclusion was reached in some other tax cases ln-
        volving the movement of oil between states,           one of those being
        the case of PRAIRIE OIL & GAS COMPANY         V.  JEFFERSON  COUNTY,76
        Fed. (2d) !&5, in which it was held that oil in tanks at a sea-
        port in Texas was subject to state ad valorem taxes by virtue
Hon. C. J. Wilde,   page 4    (o-3672),


of the fact that it was stored there for the purpose of export-
ing part of it, but not all      5y ship, and a large amount of it
remained in storage in the tanks 'a long time during which the
owner endeavored to sell it locally      without exporting it by
ship.    In the case of MAGNOLIA   PEL'ROLEUM~COMPANY  v. BOARDOF
COUNTYCOMMISSIONERS,      178 Okla. 484 .63 Pac. (,2d) 6, it was held
that oil was subject to state ad v ai orem taxes in a case in
which it was stored in tanks from four months to a year by an
interstate    pipe line operating company for the purpose of having
a supply available     in the event the pipe line's  regular source
of supply was cut off because of breaks in the line or other
reasons.    In the case of GULFREFININGCO. v. PHILLIPS 11 Fed.
(2d) 967, it was held that oil in storage tanks in LouIslana
was subject to state ad valorem taxes when it was shown that the
oil had been brought from Arkansas by a pipe line carrying 16,-
000 barrels a day and that a part of it was diverted and sent to
a refinery    in Texas by a pipe line carrying 8,000 barrels a day
and that the remainder stayed in storage in said tanks or was
sold locally.     The facts in each of the above cited cases are
different,    and it is clear that in each case the court has sought
to determine whether or not there was "a continuity       of transit"
of the oil at the time the attempt to assess the tax was made.
The best statement of the rule that we have found in a case in-
volving this question was made by Chief Justice Hughes in the
case of STATEOF MINNES0T.A     v. BLASIUS, 290 U.S. 1, 78 L.Ed. 131,
54 S.Ct. 34, as follows:

             'I*** the states may not tax property in transit
     in interstate      commerce., But, by reason of a break in
     the transit,      the property may come to rest within a
     state and become subject to the power of the state to
     im;,;se a nondiscriminatory      prop;;;y   tax ***.  The 'Cru-
     Cl     auestion.l    in determinina       the the state's  tq-
     ieg power mav-thus be exerted. is tha: of transj&.'
     CARSONPETROLEUM       COMPANY  v. VIAL, 279 U.S. 95, 101, 49
     S.Ct. 292, 293, 73 L.Ed. 626.
             'I***. The   question is always one of substance,
     and in each case     it is necessary to consider'the  par-
     ticular   occasion   or purpose of the interruption  during
     which the tax is     sought to be levied***.
             "Where property has come to rest within a state,
     being held there at the pleasure of the owner, for
     disposal   or use, so that he may disnose of it either,
     within the state. or for shiumggt lsewhere. as h;tg
     inte rest dictates,   it is deemed toebe a part of the
     general mass of property within the state and is thus
      subject to its taxing power ***.I'    (Underscoring ours).
Hon. C, J. Wilde,    page 5     (O-3672)


            The preceding paragraph has been an attempt to arrive
at a rule by which it can be determined whether or not the oil
and refined products in question are exempt from state ad valo-
rem taxes by virtue of being in transit    in interstate    commerce.
We will  now take up the second problem in connection with the
question ‘of whether personal property in Texas is subject to
state ad valorem taxes, and that is this:     Even though the prop-
erty is not in transit   in interstate commercg,if the owner is
domiciled outside of the state it must be determined whether or
not the property has acquired a taxable situs in Texas.        It is
a well established   rule of law that personal property is only
taxable at the domicile of the owner, regardless      of its location
at the taxing date, if it has not acquired a taxable situs else-
where.   PULLMAN’SPALACECAR COMPANY    v. PENNSYLVANIA,     141 U.S.
18, 35 L.Ed 613, 11 S.Ct. 876. GREATSOUl’HEFUi    LIFE INSURANCE
COMPANY  v. CITY OF AUSTIN, 113 Tex. 1, 243 S.W. 778. A state-
ment of the rule concerning personal property acquiring a taxa-
ble situs in a state other than the owner’s domicile is stated
in 2 COOLEYON TAXATION, Fourth Edition,     982, as follows:
               “In order to acquire a situs in a state or
      taxing district        so as to be taxable in the State or
      district     regardless     of the domicile of the owner
      and not taxable in another state or district              at the
      domicile of the owner, tangible personal property
      must be more or less permanently located in the state
      or district.        In other words the situs of tangible
      personal property is where it is more or less perma-
     nently located rather than wbrre it is merely in
      transit     or temporarily and for no considerable          length
      of time.      If tangible personal property is more or
      less permanently located in a state other than the
      one where the owner is domiciled,            it is not taxable
      in the latter       state but is taxable in the state where
      it is located*        If tangible personal property belong-
      ing to one domiciled in one state is in another state
      merely in transitu or for a short time, it is taxable
      in the former state, and is not taxable in the state
      where it is for the time being.             Often,. if not usuallv,
      a tax imoosed bv the state where orooertv is in tran&-
     %Fc$ves           interstate    commerce, in which case the
      a      i  n  is  not   one  of taxable   situs but the broader
     -one whether such a tax constitutes             an unlawful inter-
      ference with interstate         or foreign commerce. ***‘I
            The foregoing has been a discussion of rules concern-
ing the right of the state of Texas to tax personal property when
there is a question of interstate  commerce and when there is a
question of the owners s domicile being outside of the state.   If
it is determined that the oil and refined products about which you
Hon. C. J. Wilde,     page 6        (0-3672)


ask are subject to ad valorem taxes under the laws of Texas
it must be decided whether or not Nueces C,ounty is the county
in which such taxes should be levied.    That is a,question   of
whether or not the oil and products have acquired a taxable
situs in Nueces County.    If the owner’s domicile is in Nueces
County and the property is also located in that county (and
there is no question of interstate    commerce), the property is
clearly taxable in that county+ But, it is a fact question
that may not be easy to decide if the owner 1s domicile is out-
side of Nueces County.   We do not have the detailed   facts on
your questions and therefore   we will only endeavor to state
the general rules applicable   in such cases.
             The test of whether or not personal property has
acquired a taxable situs in a county other than the county of
the owner’s domicile is the same as the test of whether or not
such property has acquired a taxable situs in a state other
than the state of the owner’s domicile.         The question of oil
in a pipe line end working tanks being taxable in a county oth-
er than the owner’s domicile was considered in Attorney Gener-
al’s Opinion No. O-885, dated June 22, 1939, and addressed to
Hon. E. P. Jennings, County Auditor of Herdin County.           In that
case the facts showed no oil was stored, but that all of the
oil, including the oil in the working tanks, was actually          in
transit;  and, it was held in said opinion that the county in
which said oil was located on the taxing date (January 1st)
could no~t collect   ad valorem taxes on the same, if it was owned
by a person or corporation      whose domicile was in another county.
That opinion was based on the case of CUMBERLAND        PIPE LINE COM-
PANy V. I:OMMONWEALTH,   258 Hy. 90, 79 s.w.(2d) 366, which in-
volved o,il moving from one county to another in a pipe line.
The constitutional    provisions   and statutes that should be con-
sidered :in dealing with this question are Article        VIII, Section
2, of the Constitution     of Texas, and Articles    7151 and 7153, of
the Revised Civil Statutes of Texas.        Article  VIII, Section 2,
of the Constitution    reads in part as follows:
              “All property,   whether owned by persons or
      corporations    shall be assessed for taxation     and the
      taxes paid in the county where situated,      but the Leg-
      islature    may, by a two-thirds  vote, authorize the
      payment of taxes of non-residents      of counties to be
      made at the office     of the Comptroller of Public Ac-
      counts ***. ”
Article   ‘715’1, Revised   Civil    Statutes,   reads in part as follows:
            “Al.1 property shall be listed    for taxation be-
      tween January 1 and April 30 of each year, when re-
      quired by the assessor,   with reference   to the quantity
                                  i
.   .



        Hon. C. J. Wilde,   page 7        (O-3672)


              held or owned on the first day of January in
              the year for which the property is required
              to be listed or rendered ***”
        Article   7153, Revised   Civil    Statutes,   reads as follows:

                     “Al.1 property,  real and personal,   except
              such as is required to be listed     and assessed
              otherwise,   shall be listed   and assessed in the
              county where it is situated;     and all personal
              property    subject to tax#ion    and tempor
              removed hrom the state oh county, shall ,‘ly
              listed   and assessed in the county of the re -
              dence of the owner thereof,     or in the count
              where the principal    office  of such owner is
              situated.”

        In the case of GREATSGIJTHERN LIFE INSURANCE  COMPANY
                                                            v. CITY OF
        AUSTIN, supra, the Supreme Court of Texas said:
                       “OUT Constitution,  therefore,  in declaring
              that property shall be taxed where situated,
              h,ss done no more thm declare the common-law
              rule.     The purpose of the Constitution   in declar-
              ing that property should be taxed in the county
              where situated,    was merely to define the general
              j~urisdictional   un3.t for the exercise  of the tax-
              ing power and to confine the exercise       of that
              power to ihe subjects of taxation within that
              unit.     It did not define what was meant by the
              w,ords ‘where situated. I Since St had reference
              to the t         power it evidently meant property
              where si I-=uated for the purposes of taxation un-
              der the general principl&@ of law as then under-
              stood.     County Treasufer ‘v. Webb & Garrison, 11
              Minn. 500 (Gil. 378); San Francisco v. Lux, 64
              Cal. 481 2 Pac. 254. San Francisco v. Mackay
              (,::.C.) 23 Fed. 602. i507.
                      “Under the common law ‘mobilia    sequuutur
              personam’ was a well establIshed     maxim, and per-
              sonal property of every description     was taxable
              only at the domicile of its owner regardless        of
              its actual location.    This is stifl   the basic
              principle   upon which the taxation of pemonal
              property rests.    26 R.C.L. 3 241, pp. 273, 274.
              But even prior to the Revolution     the principle
              had been abrogated to the extent that, as between
              different   towns and taxing districts,   certain
              classes of tangible personal property had a taxable
                                                                     .   ,



Hon. C. J. Wilde,    page 8   (Q-3672)


     situs where employed in business   regardless
     of the domicile of its owner* 2b R.C.L 3 244,
     pp- 276, 277; Pullmatirs Palace Car Co. ;.
     sylvania, 141 U.S. 388, 24 Sup.ct. 109, 48'?&.
     232.1'
&n the case of CITY OF GALVESTON  v. HADEN,214 S.W. 766, the
 ourt of Civil Apl~als at Galveston,  said:,
            ,I***.
                    The law seems to be well settled,in
     Texas that the proper place to tax personal prop-
     erty is the residence     of 'the .owner, provided it
     has not acquired a situs for purposes of taxation
     elsewhere,   in which instance it is to be taxed
     where situated.     Constitutiouof     Texas Art. 8
     3 11; R.S. Arts. 7510 and 7514; City oh Austin'v.
     Insurance Co., 211 S.W.     482.    Indeed, the cases
     cited in the foregoing     conclusions    so hold    par-
     ticularly   the Guffey Case, with reference       c o such
     physical property as is 'here involved,       and both
     litigants   appear to proceed upon the assumption
     that such is the rule, differing       only as to whether
     this property was shown to have a situs where lo-
     cated.    The question,   then, upon this feature of
     the case turns in this court,, on whether or not the
     evidence was sufficient     to support the trial      court's
     finding that the property as to which any recovery
     for taxes was denied had in fact acquired's          situs
     outside of the city of Galveston, where its owner
     resided.11
The question of whether cattle owned by a'person living in Okla-
homa had acquired a taxable situs in Texas is discussed in the
case of HARDESIYBROTHERS    v. FLEMING, 57 Tex. 395. O,ther cases
dealing with similar questions are COURTv. O'CONNOR,65 Tex.
;3$ a$ CITY OF GALVESTON     V. J. M. GUFFEYPETROLEUM CO.
            We find a statement on this question in 2 COOl!E%N
T,tiIOi;;  Fourth Edition,  975 as follows:
            I'*** Its taxable situs is where it is more
     or less permanently located,   regardless  of the domi-
     cile of the owner.   It is well settled   that the state
     where it is more or less permanently located has the
     power to tax it although the owner resides out of the
     state, ***.
            11***

            'IAs to the place in ;theestate where tangible
     personal property is taxable,    the same rules as to
Hon. C. J. Wilde,   page 9   (O-3672)


     situs apply as where the question is whether
     the situs is inside or outside the state   pro-
     vided it is not otherwise regulated by statute.
     *:**. If

            We regret that we cannot answer each of your ques-
tions Icyest’ or %o” but in view of the fact that they are
fact questions and t hat we do not have all of the facts before
us we have given you the foregoing  rules and suggest that you
apply said rules to each fact situation.
                                   Yours very truiy

                                   ATTORNEY
                                          GENERALOF TEXAS
                                   By /s/ Cecil C. Rotsch
                                   Cecil C. Rotsch, Assistant
APPROVED JOL 22, 1941
/s/ Grover Sellers
FIRST ASSISTANTATTORNEY
                      GENERAL
APPROVED: OPINIONCOMMITTEE
BY:       BWB, CHAIRMAN
CCR:ob:wb
