                            THE          AXTORNEY    GENERAJ,
                                            OF 7rJzxAs
                                         AUSTIN.      TEXAEI
                                                           W37ll


                                                   August   15,    1974


             The Honorable   J. E. Blackburn                            OpinionNo.   H-   370
             Hansford  County Attorney
             Box 38                                                     Re: Proper method of taxing
             Spearman,   Texas    79081                                 water pump and irrigation
                                                                        casing when placed ‘in a water
                                                                        well.

             Dear Mr.    Blackburn:

                      You have requested our opinion as to the proper, method of taxing
             a water pump and irrigation      casing which a taxpayer in your county has’
             placed in a water well located in his property.        In assessing   the value
             of the taxpayer’s   land in order to collect ad valorem property taxes,         the
             county has taken into account the increase       in the land’e value produced
             by the addition,of the well.    In addition, the county proposes to tax both
             the pump and the casing separately       aa personal property.      The !taxpayer.
             has obje,cted to this method of taxation on the ground that it constitutes
             double taxation,   and you have referred the matter to this office for an
             opinion.

                     Except as expressly     exempted,       all property,   real, personal, or,.
             mixed,  is subject to taxation.    Article      7145, V. T. C. S. For tax purposes
             real property is defined in Art. 7146,         V. T. C.S.,   as follows:

                                  Real property for the purpose of taxation,     shall
                              be construed to include the land itself, whether laid
                              out in town lots or otherwise,  and all buildings,   structures
                              and improvements,    or other fixtures of whatsoever     kind
                              thereon.    . . .




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                                                                                                         :

I,   .   .
The Honorable    J. E.   Blackburn     page 2             (H-.370)




Personal   property   is defined   in Art.        7147,   V. T. C. S.,   to include:

                      Pereonal property,  for the purposes of taxation,
                 shall be construed to include all goods, chattels and
                 effects~.  . . .

         Under Art. 7146, then, the existence of fixtures and other improvk-
ments on a taxpayer’s        land should be considered. by tax assessors     inn    .
determining      the value of that land.     Their value should be included in the
value assigned to the realty.         They are not to be taxed separately’as      :     ’
personal property.        If the water pump and casing about which you ar,e
concerned     are in fact fixtures,    then it would be improper for the county
to tax them separately        as personalty.    Instead they should be taken intd
account in assigning       a value to the taxpayer’s    realty and taxed as part
of that, realty.

          Generally   a fixture is something that is personal in nature but’s0
annexed    to realty as to have become a part of it.     25 Tex. Jur. .2d, Fixtures,.
 §l p. 393.    The  test  to be used in determining  whether   .a particular article
 or structure is a fixture was set out in the leading case of Hutchins V.
‘Masterson    & Street,   46 Tex. 551 (1877) as follows:

                     1st.  Has there been a real or constructive
                 annexation of the article in question to the realty?

                      2nd. Was there a fitness or adaptation of such
                 article to the uses or purposes of the realty with
                 which it is connected?

                      3d.  Whether or not it was the intention of the
                 party making the annexation that the chattel should
                 become a permanent accession      to the freehold?   --
                 this intention being inferable from the nature of the artiole,
                 the relation and situation of the parties interested,   the
                 policy of the law in respect thereto,   the mode of




                                             p.    1739
The Honorable    J. E.   Blackburn   page 3      (H- 370)




                annexation,     and purpose   or use for which the
                annexation    is made.

                    And of these three tests, pre-eminence       is
                to be given to the question of intention to make
                the article a permanent accession     to the freehold,
                while the others are chiefly of value as evidence
                as to this intention . . . . Hutchins,    supra at 554.

This test has been reaffirmed     and applied both by the courts and by this
office on numerous occasions.       Ruby v. Cambridge    Mutual Fire Insurance
co..   358 S. W. 2d 943 (Tex. Civ. App.,     Dallas 1962, no writ); Shugart v.
Nocona Independent School District,     288 S. W. 2d 243 (Tex. Civ. App.,
Ft. Worth 1956, no writ); Maro Co. v. State, 168 S. W. 2d 510 (Tex. Civ.
APP.. Amarillo    1943, writ ref.);  Bantuelle v. Chapman,    256 S. W. 936
(Tex. Civ. App.,    Texarkana   1923, no writ); and Attorney General Opinion
O-5268    (1943).

          Thus resolution   of the question of whether or not certain property
is a fixture depends on the circumstances        surrounding    its placement   on
the land with particular     emphasis being accorded      to the intention of. the
party, or parties,     who has placed it there.     Since the same article or
structure   may in one set of circumstances       be considered ,realty and in
another be considered      personalty,   no categorical   rules applicable to
particular   properties   can be stated.

        There have been several cases in which the question before the
court was whether equipment such as pumps and casing were fixtures.
For instance,  in Maro Co. v. State,    supra, the holder of an oil and gas
lease had brought casing,   rods, tanks, pumps,    etc., onto the property in
order to engage in drilling with the full intention of removing the equipment        ~.   ,
as soon as production became unprofitable or inconvenient.        In these
circumstances   the court ruled that the equipment was personalty.       See
also Shugart v. Nocona Independent School District,      supra.




                                        p.    1740
                                     1




The Honorable    J. E.   Blackburn         page 4         (H-370).




         Similarly  where pumps and casing were installed pursuant to an
agreement    between the buyer and seller that they would remain personalty
subject to a chattel mortgage,      the court found that they were personal
property and not fixtures even though they were solidly fastened to the land.
Morris   v. Biggs & Co.,      165 S. W. 2d 915 (Tex. Civ. App.,      Amarillo   1942,
writ dism.)    and Texas Power and Light Co. v, Malone,          42 S. W. 2d 845
(Tex. Civ. App.,     Amarillo    1931, writ dism.).    On the other hand where
water pumps and casing were installed in order to improve the productivity,
of the land and there was no indication that the equipment was not intended
to become a permanent part of the realty,        courts have concluded that such
equipment was a fixture.       First State and Savings Bank v. Oliver,       198 P.
920 (Ore. 1921); See Attorney General -. Opinion O-5268        (1943) and cases
cited therein.

        These cases plainly indicate that no categorical   rule can be fashioned
for determining    whether water pumps and casing are fixtures.       If it can
readily be inferred from the circumstances     surrounding   their installation      ’
that the owner intended them to become a permanent part of the realty,          then
they are fixtures.    If, However, the taxpayer has installed them only for,
temporary   use fully intending to~remove them whFnever convenient,         then
they must be considered personalty.                                  :


          The answer to your question depends upon whether or not the
taxpayer’s    water pump and casing are determined       to be fixtures.   If
they are, then under Art. 7146 they must be taxed as part of the realty..
The value they add to the taxpayer’s      land should be taken into account in
assessing    its value, and they cannot be taxed separately      as personalty.
On the other hand if they are determined       to be personalty,   then they can
be taxed separately,    but their value could not also be included in the
value ‘assigned to the taxpayer’s    realty.



                                         SUMMARY

                     Under Art.           7146, V. T. C. S., fixtures and other
                 improvements            should be taxed as part of the taxpayer’s




                                              p.   1741
The Honorable   J. E.    Blackburn       page 5          (H-370)




                real property.    Their value should be taken into
                account in assigning a value to the taxpayer’s   realty,
                and they cannot then be taxed again separately    as
                personal property.

                     Whether a water pump and irrigation    casing are
                fixtures depends on the facts of the particular   case.

                                                           Very    truly yours,




                                                           Attorney    General    of Texas




LARRYY.     Y   RK,     Fir   t Assfstant




T?J.-\L
 w-
DAVID M. K:ENDALL,            Chairman
Opinion Committee




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