Affirmed and Opinion Filed May 5, 2020




                                      In The
                            Court of Appeals
                     Fifth District of Texas at Dallas
                               No. 05-18-01520-CV

  DALLAS CENTRAL APPRAISAL DISTRICT AND DALLAS COUNTY
            APPRAISAL REVIEW BOARD, Appellants
                            V.
   NATIONAL CARRIERS, INC. AND NCI LEASING, INC., Appellees

                On Appeal from the 44th Judicial District Court
                            Dallas County, Texas
                     Trial Court Cause No. DC-17-04548

                        MEMORANDUM OPINION
                  Before Justices Bridges, Whitehill, and Nowell
                            Opinion by Justice Nowell
      This is an appeal from judicial review of an appraisal review board order

upholding a business personal property tax on commercial trucks. After a bench trial,

the trial court granted the taxpayers relief. The appraisal district and review board

appeal arguing that the taxpayers’ trucks were subject to business personal property

taxation in Dallas County. We conclude the evidence supports the trial court’s

findings of fact and the trucks were not subject to personal property taxation in

Dallas County for tax-year 2016. We affirm the trial court’s judgment.
                                     Background
      National Carriers, Inc. is a Kansas corporation with its headquarters and

principal place of business in Liberal, Kansas. It specializes in provision of

refrigerated transportation services for its parent company and other customers. The

trucks operated by National Carriers are owned by NCI Leasing, Inc. and leased by

National Carriers. National Carriers is an irregular-route carrier, meaning its drivers

do not travel fixed routes on a repeated basis. As they complete a shipment, drivers

are assigned another nearby shipment based on customer needs. Trucks operated by

National Carriers are kept on the road and at any given time are scattered throughout

the United States. It is possible National Carriers might service the same route more

than once, but unlikely it would do so with the same truck.

      National Carriers owns a facility in Irving, Texas used for orientation and

safety, light maintenance on trucks, administration, and recruiting. Ten to twenty

trucks are present at the facility at any given time for minor maintenance or to drop

off trailers. No trucks are located at the facility or generally return there. Individual

trucks are at the Irving facility for as little as an hour or as long as two days, but

never more than a temporary period.

      NCI Leasing is a wholly-owned subsidiary of National Carriers. It’s

headquarters and principal place of business is at the same location as National

Carriers in Liberal, Kansas. It has no office or other location in Texas. NCI Leasing

owns the trucks leased to National Carriers. It also sells and leases trucks to others.

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Titles to the trucks are held in Kansas, with NCI Leasing having equitable ownership

subject to security interests held by its lenders. NCI Leasing pays business personal

property tax on the trucks in Kansas.

      For tax year 2016, Dallas County Appraisal District issued a notice of

appraised value to National Carriers for business personal property valued at over

$53 million. The property was 430 trucks operated by National Carriers. National

Carriers protested the notice on several grounds, including that the trucks were not

taxable in Dallas County and National Carriers did not own the trucks. National

Carriers and the chief appraiser reached a value settlement, which adjusted the

appraised value to $0.

      Afterwards, DCAD sent a supplemental notice of appraised value for the

trucks to National Carriers intended for NCI Leasing. National Carriers and NCI

Leasing filed a protest of the notice on the same grounds as the initial protest and

that the value settlement precluded the supplemental notice of appraised value. The

Dallas County Appraisal Review Board denied the protest and assessed a business

personal property tax value to NCI Leasing of over $8.7 million.

      National Carriers and NCI Leasing filed suit seeking judicial review of the

decision. See TEX. TAX CODE §§ 42.01–.09. After a bench trial, the trial court

determined that the trucks lacked local situs in Dallas County and rendered judgment

adjusting the appraised value of the trucks to $0. The trial court filed findings of fact



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and conclusions of law supporting its judgment. DCAD and the ARB (collectively

DCAD) appeal the trial court’s judgment.

                                Standard of Review

      Findings of fact in a nonjury trial have the same weight as a jury’s verdict and

are reviewed under the same standards that are applied in reviewing evidence to

support a jury’s verdict. See Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994).

In evaluating the legal sufficiency of the evidence to support a finding, we credit

favorable evidence if a reasonable factfinder could, and disregard contrary evidence

unless a reasonable factfinder could not. City of Keller v. Wilson, 168 S.W.3d 802,

827 (Tex. 2005). The ultimate test is whether the evidence allows reasonable minds

to reach the finding under review. See id. Anything more than a scintilla of evidence

is legally sufficient to support a challenged finding. Catalina, 881 S.W.2d at 297.

In reviewing the factual sufficiency of evidence, we review all the evidence in

support of and against the trial court’s finding and will set aside the finding only if

the evidence is so weak or if the finding is so against the great weight and

preponderance of the evidence that it is clearly wrong and unjust. See Dow Chem.

Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001); Cain v. Bain, 709 S.W.2d 175, 176

(Tex. 1986) (per curiam). In a bench trial, the trial court is the sole judge of the

credibility of the witnesses and may believe one witness over another and resolve

any conflicts or inconsistencies in the testimony. Shaw v. Cty. of Dallas, 251 S.W.3d

165, 169 (Tex. App.—Dallas 2008, pet. denied).

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       A party appealing from a nonjury trial in which the trial court made findings

of fact and conclusions of law should direct an attack on the sufficiency of the

evidence at specific findings of facts, rather than the judgment as a whole. See Shaw,

251 S.W.3d at 169; Fiduciary Mortg. Co. v. City Nat. Bank of Irving, 762 S.W.2d

196, 204 (Tex. App.—Dallas 1988, writ denied). Unless challenged by point of error

on appeal, findings of fact are binding on the parties and the appellate court. See

Employers Cas. Co. v. Henager, 852 S.W.2d 655, 658 (Tex. App.—Dallas 1993,

writ denied). However, a challenge to an unidentified finding of fact may be

sufficient if we can fairly determine from the argument the specific finding of fact

the appellant challenges. See Tittizer v. Union Gas Corp., 171 S.W.3d 857, 863 (Tex.

2005) (per curiam); Shaw, 251 S.W.3d at 169.

                                      Discussion

       The parties agree that section 21.02 controls this case. See TEX. TAX CODE

§ 21.02(a). That section provides that tangible personal property is taxable by a

taxing unit if:

       (1) it is located in the unit on January 1 for more than a temporary
       period;

       (2) it normally is located in the unit, even though it is outside the unit
       on January 1, if it is outside the unit only temporarily;

       (3) it normally is returned to the unit between uses elsewhere and is not
       located in any one place for more than a temporary period; or

       (4) the owner resides (for property not used for business purposes) or
       maintains the owner’s principal place of business in this state (for
       property used for business purposes) in the unit and the property is
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      taxable in this state but does not have a taxable situs pursuant to
      Subdivisions (1) through (3) of this subsection.

Id.

      Although DCAD does not challenge any specific findings of fact, we

determine from its argument that it challenges the findings that the trucks were not

located in Dallas County for more than a temporary period, the trucks were not

normally located in Dallas County, the trucks were not normally returned to Dallas

County between uses elsewhere and were not located in any one place for more than

a temporary period, and NCI Leasing, the owner of the trucks, did not maintain its

principal place of business in Dallas County.

      “Temporary” as used in section 21.02(a) is given its ordinary meaning, that

is, lasting for a limited time. See Patterson-UTI Drilling Co. LP, LLLP, v. Webb

County Appraisal Dist., 182 S.W.3d 14, 18 (Tex. App.—San Antonio 2005, no pet.).

From the evidence in the record, the trial court could reasonably conclude that the

trucks were not located in Dallas County for more than a temporary period. DCAD

admits in its brief, “Individual trucks are on the Irving property for temporary

periods of time.” The testimony reflects that ten to twenty trucks are on the Irving

Property at any given time and only there for short periods of time, as little as one

hour, but never more than two days. The evidence also shows that no trucks were

stationed or located at the Irving Property and were not returned to the Irving

Property between assignments. The trucks continually transport freight for National


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Carriers’ customers and are not located at any specific location. The evidence further

shows that NCI Leasing owns the trucks and did not maintain its principal place of

business in Dallas County in 2015 or on January 1, 2016. Based on the evidence, it

was reasonable for the trial court to reach the challenged findings. Thus, we conclude

the evidence was legally sufficient to support the trial court’s judgment.

      DCAD argues there is a rebuttable presumption, once the taxing unit present

a prima facie case, that personal property has a tax situs within the unit’s jurisdiction.

Davis v. City of Austin, 632 S.W.2d 331, 333 (Tex. 1982) (discussing presumption

arising in tax delinquency suit). A presumption, however, disappears once evidence

to the contrary is introduced. Temple Indep. Sch. Dist. v. English, 896 S.W.2d 167,

169 (Tex. 1995). Here, National Carriers and NCI Leasing presented ample evidence

contrary to a presumption that the trucks had a situs in Dallas County under section

21.02(a). Thus, the Davis presumption was rebutted.

      DCAD also argues that the state has jurisdiction to tax the property under tax

code section 11.01 and cites Alaska Flight Services, LLC v. Dallas Central Appraisal

District, 261 S.W.3d 884 (Tex. App.—Dallas 2008, no pet.), for the holding that

“continually” as used in section 11.01(c)(3) means “while present in this state,

though not necessarily exclusively, for some period of the tax year.” Id. at 889. The

case before us, however, deals with whether DCAD has authority to tax personal

property under section 21.02(a). As we said in Alaska Flight, section 21.02 deals



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with tax situs, “an entirely different standard,” than the state’s jurisdiction to tax

under section 11.01. Id. at 887.

      DCAD argues that inherently mobile property acquires a tax situs when it has

been located in an area with such permanence that it becomes part of the general

mass of property within the boundaries of the taxing authority. See Exxon Corp. v.

San Patricio County Appraisal Dist., 822 S.W.2d 269, 274 (Tex. App.—Corpus

Christi 1991, writ denied). Exxon Corp. stands for the proposition that to acquire tax

situs, property must be located in a particular area with a “degree of permanency”

that distinguishes it from property that is in the area “on a purely temporary or

transitory basis.” Id. at 273–74 (quoting Davis, 632 S.W.2d at 334). In Exxon Corp.,

the evidence showed that Exxon stored massive quantities of crude oil in seventeen

oil tanks located within the county continuously throughout the year, although each

barrel of oil remained there for an average of only seventeen days. Id. at 272. The

court noted that in analyzing a quantity of fungible personal property, it would be

inappropriate to break the property down into individual units. Id. at 273. Here,

unlike the fungible crude oil in Exxon Corp., the individual trucks owned by NCI

Leasing are discrete, readily identifiable, pieces of tangible personal property. They

are unlike fungible quantities of crude oil stored in tanks. Thus, the conclusion that

an undifferentiated mass of oil was continuously present in the county is inapt in this

case. See id. at 273. Even so, the court in Exxon Corp. concluded that the evidence



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supported the trial court’s judgment. Id. at 275. We reach the same conclusion in this

case: the evidence was legally sufficient to support the trial court’s judgment.

      Next, DCAD argues that National Carriers is an equitable owner of the trucks

and is subject to taxation under section 21.02(a)(4). If personal property does not

have situs in a taxing unit under subsections (1) through (3) of section 21.02(a), the

taxing unit may tax the property if the owner maintains the owner’s principal place

of business in the unit. TEX. TAX CODE ANN. § 21.02(a)(4).

      Because Title 1 of the tax code does not define “owner,” see TEX. TAX CODE

§ 1.04, we give the term its plain and ordinary meaning, Sw. Royalties, Inc. v. Hegar,

500 S.W.3d 400, 405 (Tex. 2016). An “owner” is “[s]omeone who has the right to

possess, use, and convey something.” Owner, Black’s Law Dictionary (11th ed.

2019); see also Travis Cent. Appraisal Dist. v. Signature Flight Support Corp., 140

S.W.3d 833, 839–40 (Tex. App.—Austin 2004, no pet.) (“plain meaning of ‘owner’

contemplates someone with legal or rightful title”).

      The general rule is that taxes are imposed on the legal owner of the property;

“[t]he person having legal title to property is generally considered to be the owner

thereof for purposes of taxation.” Childress Cty. v. State, 92 S.W.2d 1011, 1015

(Tex. 1936); see also TEX. TAX CODE ANN. § 32.07(a) (property taxes are personal

obligation of person who owns or acquires property on January 1). Here, it is

undisputed that NCI Leasing, not National Carriers, owned the trucks on January 1,

2016 and that it did not maintain its principal place of business in Dallas County.
                                         –9–
      The authority relied upon by DCAD for the equitable-title argument is

inapposite. See TRQ Captain’s Landing L.P. v. Galveston Cent. Appraisal Dist., 212

S.W.3d 726, 732 (Tex. App.—Houston [1st Dist.] 2006), aff’d, 423 S.W.3d 374

(Tex. 2014). That case held that a tax exemption available for property owned by a

charitable entity organized as a community housing development organization

(CHDO) could be claimed by a limited partnership that was wholly owned by a

limited liability corporation with a CHDO as its only member. Id. The supreme court

later agreed with this holding and reasoned that the statutory language of the tax

exemption, TEX. TAX CODE § 11.182, reflected a legislative intent to encourage

private investment in low- and moderate-income housing by providing a tax

exemption even if a CHDO is only a participant in tiered ownership. AHF-Arbors at

Huntsville I, LLC v. Walker Cty. Appraisal Dist., 410 S.W.3d 831, 837–38 (Tex.

2012). The court concluded that extending the exemption to property equitably

owned by a CHDO through wholly-owned subsidiaries was “compelled by the text

of Section 11.182 and consistent with its purpose.” Id. at 839.

      This case concerns liability for taxes, not the availability of a specific statutory

tax exemption. Thus, the general rule that tax liability is imposed on the legal title

holder applies. See Childress, 92 S.W.2d at 1015; Sebastian Cotton & Grain, Ltd. v.

Willacy County Appraisal Dist., 581 S.W.3d 804, 809–10 (Tex. App.—Corpus

Christi–Edinburg 2019, pet. denied) (distinguishing AHF-Arbors and holding that

legal title holder was liable for taxes); see also Bailey v. Cherokee County Appraisal
                                         –10–
District, 862 S.W.2d 581, 584 (Tex. 1993) (“While it is true that the heirs hold

equitable title to estate property, this interest does not give rise to tax liability. The

responsibility for taxes lies with the administrator as holder of legal title.”).

      Furthermore, subsidiary corporations and parent corporations are considered

separate and distinct “persons” as a matter of law; the separate entity of corporations

will be observed by the courts even in instances where one may dominate or control,

or may even treat it as a mere department, instrumentality, or agency of the other.

Gregg Cty. Appraisal Dist. v. Laidlaw Waste Sys., Inc., 907 S.W.2d 12, 17 (Tex.

App.—Tyler 1995, writ denied). DCAD has presented no compelling reason to

abandon this rule in this case.

      DCAD also contends that public policy prevents property from escaping

business personal property taxation. Although DCAD cites no authority for this

argument, we note that it is the legislature that determines public policy though the

statutes it passes. Fairfield Ins. Co. v. Stephens Martin Paving, LP, 246 S.W.3d 653,

665 (Tex. 2008). The legislature has established the public policy regarding the

taxation of tangible personal property by taxing units through the express language

of section 21.02. Because DCAD lacks authority to tax under that section in this

case, the public policy established by the legislature is satisfied.

      We overrule DCAD’s sole issue on appeal.




                                          –11–
                                  Conclusion
      We conclude the evidence is legally sufficient to support the trial court’s

findings of fact and judgment. We affirm the judgment.




                                         /Erin A. Nowell/
                                         ERIN A. NOWELL
                                         JUSTICE



181520F.P05




                                      –12–
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                   JUDGMENT

DALLAS CENTRAL APPRAISAL                       On Appeal from the 44th Judicial
DISTRICT AND DALLAS                            District Court, Dallas County, Texas
COUNTY APPRAISAL REVIEW                        Trial Court Cause No. DC-17-04548.
BOARD, Appellants                              Opinion delivered by Justice Nowell.
                                               Justices Bridges and Whitehill
No. 05-18-01520-CV           V.                participating.

NATIONAL CARRIERS, INC.
AND NCI LEASING, INC.,
Appellees

       In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED.

      It is ORDERED that appellees National Carriers, Inc. and NCI Leasing, Inc.
recover their costs of this appeal from appellants Dallas Central Appraisal District
and Dallas County Appraisal Review Board.


Judgment entered this 5th day of May, 2020.




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