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     Hon. E. J. Elam                   Opinion NO. ~~-818
     County Attorney
     Somervell County                  Re:     Whether the aircraft of a
     Glen Rose, Texas                          commercial alrllne are
                                               taxable on an ad valorem
                                               basis when such aircraft
                                               are based 1~ the county
                                               of the cotipany's domicile
                                               even though the aircraft
     Dear Mr. Elam:                          .fly in interstate    commerce.
                 You have requested an opinion on two questions:
                    Are the aircraft of a dommerclal airline
          [ taxable
               ""   &on an ad valorem basis when such air-                  '
          craft are    sed In the county where the company
          Is domiciled, even though the aircraft  fly In in;
          t&state commerce?
               ”2. If these aircraft  are taxable would the'
          apportionment rule as laid down by the @d&al
          Courts in the Flying Tigers and other cases be
          legally appllaable in Texas, or should the assess-
          ment be made on all the aircraft  on the basis of
          total yalue?"
                 Article   VIII,   Section   11, of the Texas Constitution
     provides:
              "All property, whether owned by pereons or
          corporations,  shall be assessed for taxation, and
          the t&es paid In the oounty where situated, br
          &he LeglslatuCe may, ~by a t,worthlrds vote,~author-
          ize the payment of taxes Of non-residents of ooun-
          ties to be made at the office of the C?mptroller
          of Public Accounts."
                 Article   7153 of Vernon's Civil      Statutes   of'Te=s
     states:

              "All property, real and personal, except suqh
          as la required to be listed and'assessed otherwise,
          shall be listed and assessed In the county where
Hon. E. J. Elam               Page 2           Oplnlon NO. ~~-818

                                                I’   .:



        It is situated; and all personal Droner&~.&b.l;?&         ”’
        to taxation and temporarily removed from the State
        or county, shall be- listed- and assessed In the
        oounty of the residence of then owner thereof> or
        In the oounty where the principal offloe.. of such
        owner Is situated.”
         The foregoing provisions have been oonstrued to
mean that property shall be taxed at its ProDer tax sltus.
Great   Southern Life Insuranae Companyv. clti OS Austin; 243
                 Su Ct 1922) . pi ld er, lh TexasTaxSt ruo -
                 V0k11***0, p&e X&I.      Undo! the oommonlaw,
personal property Is taxable at the domloile o? lts~ owner
inless   such property has acquired a fixed or Permanent slttis
elsewhere.     Bee- Ore& South&n Life Insuranke- Companyv.
City OS Austin inma.        Under the faots preaoatod In ques-
  1    No  1   181s   apparent that the ab?Orait, uhlch are
sd      1; tie oounty where the wimpany-owner ia domlclled
have a sltus In that county (and ~only In that oounty) iok
the purpose of Texas ad valorem taxation.       See Chemloal Ex-
    em, et al. v. City of Roaoob, 310 S.W.2QX94       (Tex.clv.
       195U, error ref )     It remalna to detg?~~r~;plg~
     kty may,. oonsls&&      with the Federal
pose ad valorem taxes upon the fill value of the altiorh.
          The answer to aueatlon No. 2 Is oontrolled bv four
cases deolded by the United States Supreme' ‘hrf.        Sikh; firat
Is Northwest Airlines,. Incorporated v. BIlnziesota 322 .U.S..
2927’I’944).  This oase held that the. State:.bf rd nnesota. in
&l& the‘ subjeot .a$rune was domiolledi - h&jl oonstltutlkal
pouer to tax the alrllzpile   entire ,fleet of -qirbraft   at the’
full value thereof, even though all the planes were. oontlnu-
owly engaged In. inter.a$ate fllgh$.      A vlgosoxi@ dissenting
opinion was rrritteq .by,-chief Just4p?,.Stone,“~ln,whioh at was
ooatended that .tinneqota could on&y ‘i@!posp +I apportioned ad
valorea tax.         . .:i

         In 1949 thi Su$rm.e Court heLU In.‘pt v. UlssIsal~ol
Bar Line 336 U,%.%69, that Lcngslana, ~i.~non-dc& 111w
mua e, cou d tax..~barges. Andytugs moving In ,+nd tit olot$he
state, on an apport~iofreg ad valorq :?W#ia @doording tq the
c-cd     carried on -;!Q$t$n the state. ~.
          standarci Oil ~c&lpany  v. PBOk 34cJw.4. $2 (1952),
t&&h Involved’ .98888x:8.,:
                          traveling or*@ ~W@i~rippl      @v&r;.
adopted the rule that ,+i domlolllaqy @fiat& oeuld not t&x,~.~bn
au ti valorem~ b&Is, ,:tjg* full valui of?preperty  looatcr(l only
e    of the tlme:j?it&$n: Its .borders, ,~g&:,edh must
                                                   m-    h&e ,.
Hon. E. J. Elam            Page 3             opinion Nb. ~~-818


ac ulred a tax situs eleewhere,     without oonstltutlngan  un-
b-
reasona  e burden    Interstate     commerce. !fhe court stated
at page 310:
         "The rule which permits taxation by two or
     more states  on an apportioned basis DFecltideS
     taxation of all the-hroperty by the state of the
     domlolle."
The court distinguished the Northrest Airlines oase on the
grouxlthat In that case It had not be. shown that "a de-
fined part of the dom~clllary corpvsueiad aoqulred a taxable
sltus elsewhere.
          In 1954 the Supreme Court held ln~ Braniff AlrGs,
Inc. v. Nebraska Board of Equalization and assessment, 347
U.S. 590 that the State of Nebraska could subject th e alr-
craft of's non-domlclllary   interstate   airline to an appor-
tloned ad valorem tax, even though the airline made only 18
regularly scheduled stops In then-state.      In~holdlng thai; the
regularly aoheduled stops.formed a sufficient      nexus with the
taxing jurisdiction  to allow taxation of a properly appor-
tioned fraction1 of the alrllnete     property; the oourt ratl-
fled and adhered to Standard 011 v. Peck, and distinguished
the Northwest Airlines case In the f@lowlng language:
          "While no one view     in the Northwest oase
     mustered a majority of &I 8 court, It seems f az r
     to say that without the position stated In the
     Conclusion and Judgment uhlch announoed the de-
     cision of this court,,the    result would have been .,
     the reverse.    That position wa's that It me not
     shown 'that a defined part of the domlolllary
     oorpus has acquired a permanent looatlon,    i.e.,
     a taxing sltus, elsewhere.'     322 U.S. at page
     2%. 64 S.Ct. at page 952. That opinion recog-
     nized the 'doctrine of tax apportionment for ln-
     strumentalltles   engaged'ln Interstate oqmmerce,l


 ' The concurring opinion of Mr. Justice Douglas etates, In
 effect, that this fraction Is the amount of.property    that,
 justlflably can be said to be within the taxing jurlsdlo-
'tlons at all times during the taxing period.    The validity
 of this proposition   Is somewhat dubious In view of the ap-
 portionment formulas that have received either dlreot or
 tacit approval.    See the dlaousslon above.
                           Page 4            Opinion No. WW-818


     322 U.S. at page 297, 64 S.Ct. at page 953, but
     held It Inapplicable because no 'property (or a
     portion of funglble units) Is permanently sltu-
     ated In a state other than the domlclllary state.'"
          In view of the foregoing, It appears that where a
non-domiciliary  state has acquired the power to Impose an
apportioned ad valorem tax, the domicile must also Impose an
apportioned tax.   See the analysis In Flying Tiger Line v.
County of Los Angeles, 333 P.2d 323 (Cal.Sup.Ct. 1956); and



parttires in a state are sufficient     to establish an ad valorem
tax situs in that state.      However, though there has been no
concrete rule established on.thls point, It does not. appear
that lntermltterit,   Irregular or sporadic flights Into another
state will form a sufficient      nexus with that state to allow
the imposition of even an apportioned ad valorem tax. See
Braniff case, 347 U.S. at pages 592-3. Therefore, we are un-
able     answer your second question since you have not set
forth sufficient    facts upon which to baae a conclusion.     If,
In fact, the'alrllne     to which you refer has not acquired a
taxable sltus In another state within the purview of the
Braniff case, then all aircraft based In your county are tax-
able at their full value.      If, however, a taxable situs has
actually been acquired In another state then the ad valorem
tax by your county must be apportloned.fi      In this connection,


2 Texas has no uniform apportionment rule.      Therefore, the
formula to be used is within the discretion of the county. All
that Is required Is that It comport with the traditional      con- _
oept of due process, I.e., that It have some relation to the
benefits and protection afforded by the taxing state.       See
Plylllg Tiger Line v. County of Los Angeles, 333 P.2d 323 (Cal.
Sup.Ct. 1959); Braniff Airways v. N
mula meets this test     th      d
case, there will be Ao v%a$o?of         the Commerce Clause-
Federal Constitution.
                   Tl er cases in California the apportionment
formula
   In lihewas
           ==+-base upon the equalization board's determination
of the amount of time spent by the aircraft In the county dur-
ing an arbitrary period during the taxable year. In the Braniff
case the apportionment was based upon a three-factor     all-
formula, the three factors being (1) arrivals and departures,
(2);revenue tons and (3) originating revenue. Justice Frankfur-
ter, in footnote 3 to his dissenting opinion In this case (347
U.S. at page 606), points out that three other apportionment
formulas have been proposed.
Hon. E. J. Elam              Page 5                Opinion No. ~~-818


It makes no difference   whether the aircraft are actually being
taxed in another state, so long as a taxable eltus in another
state has been acquired.    Plying Tiger Line v. County of Loa
Aneeles; 333 P.2d-323.
                            SUMMARY

                Aircraft of a oommerclal airline are
          taxable  on an ad valorem basis when suoh
          aircraft   are based in the county where the ._
          company Is domiciled even though the alr-
          craft fly In Interstate commerce. Whether
          or not such aircraft are taxable at their
          full value or on an apportioned basis
          depends upon whether such alroraft have
          obtained a taxable situ8 In another state
          within the purview of the case of Branlrf
          Airways v. Nebraska State Board of
          zatlon and Assessment. 347 U S 390
                                         l   0.




                                      Very truly     yaws,      ,~
                                      WILLWILSON
                                      Attorney General.




JNP:bct

APPROVED:
OPINIONCOMMITTEE:
W. V. Geppert, Chairman
James M. Farrls
J. Arthur Sandlln
John C. Stelnberger
Zellner J. Turllngton
APPROVEDFORTRE ATTORWEY GENERAL:
By: Leonard Passmore
