Johnson Oil Ref. Co. v. State

• Decision Date: 11 June 1935
• Docket Number: Case Number: 25459
• Citation: 1935 OK 663,46 P.2d 546,172 Okla. 552
• Parties: JOHNSON OIL REFINING CO. v. STATE EX REL.
• Court: Oklahoma Supreme Court

1935 OK 663

46 P.2d 546

172 Okla. 552

JOHNSON OIL REFINING CO. v. STATE EX REL.

Case Number: 25459

Supreme Court of Oklahoma

Decided: June 11, 1935

Syllabus

¶0 1. TAXATION - Personalty not Exempt Because in Transit Within State on January 1st.

Tangible personal property is not exempt from ad valorem taxation merely because it is in transit from one place to another within the state of Oklahoma on the first day of January.

2. SAME - Personalty Without Other Situs Taxable at Place of Owner's Domicile in State or at Principal Place of Business of Corporation Owner.

Tangible personal property subject to taxation in the state of Oklahoma, which has not acquired a situs for the purpose of taxation elsewhere, should be listed and assessed at the place of the owner's domicile within the state, and in the case of property owned by a corporation at the place where the principal business of the corporation is transacted.

3. SAME - Personalty Existing in One County and in Transit to Another on January 1st Held not to Have Taxable Situs in Former Merely Because of Transitory Existence There.

Tangible personal property existing in one of the counties of this state on the first day of January and actually in transit on that day to another county of the state does not have a taxable situs in the first mentioned county merely because of its transitory existence there.

4. SAME - Personalty Removed Between January 1st and September 1st From One County to Another Taxable in Either but not in Both.

Where taxable tangible personal property is removed from one county or other taxing district of this state to another county or taxing district within the state between January 1st and September 1st of a calendar year and its taxable situs is changed by such removal from one county or taxing district to another, it may be listed and assessed for taxation in either county where it had a taxable situs, but it cannot be taxed in both.

Appeal from County Court, Osage County; L.F. Roberts, Judge.

Proceeding by the State of Oklahoma, on the relation of C.K. Templeton, county attorney of Osage County, Okla., against the Johnson Oil Refining Company to list and assess for taxation alleged omitted personal property. Judgment against the property owner, and it appeals. Reversed and remanded.

McCollum & McCollum, for plaintiff in error.

Sim T. Carman, Co. Atty., and McCoy, Craig & Pearson, for defendant in error.

BUSBY, J.

¶1 This is a proceeding instituted under sections 12346 and 12348, O. S. 1931 (commonly referred to as the Tax Ferret Law), to list and assess for taxation in Osage county, Okla., as omitted personal property certain crude oil belonging to the Johnson Oil & Refining Company.

¶2 The case involves different quantities of crude oil which werelocated in Osage county on the first day of January of each ofseveral years. The principal question to be determined is whether each of the several quantities of tangible personal property had acquired a situs in Osage county for the purpose of taxation.

¶3 The county court of Osage county, wherein the cause was tried on appeal from the county treasurer of the same county, decided the matter adversely to the property owner, Johnson Oil & Refining Company, holding that the situs of the property was in Osage county. Johnson Oil & Refining Company brings the case to this court for review, appearing herein as plaintiff in error. The state of Oklahoma, on relation of the county attorney of Osage county, is the defendant in error. For the sake of convenience we shall refer to the parties as property owner and taxing authorities, respectively, when not otherwise designated.

¶4 The taxing authorities submitted their case in the trial court on a stipulation as to the facts, the pertinent portions of which are as follows:

"It is hereby stipulated and agreed by and between the parties hereto that on January 1, 1927, the defendant had in its booster tanks along its pipe lines in Osage county, Okla., oil in the amounts later given; that said tanks and pipe lines belonged to the Johnson Refining Company and that it was the intention of the defendant to transport this oil to their refinery at Cleveland, Okla., in Pawnee, Okla., through their said pipe lines. * * *

"Now, it is further agreed that among other purposes for which this oil of the respondent was in their tanks on the 1st day of January on each of those years was that it was put in there to let off the gas head off of the oil so that the engines could handle the oil more efficiently and in order that the defendant might measure the oil in said tanks which it had theretofore purchased.

"It is further agreed that the oil involved in this case in these tanks belonged to respondent and that the royalty owner, or the Osage Tribe of Indians, had no interest therein, they having theretofore been paid their interest by the producer and that the producer had no interest therein.

"It is further stipulated that the Johnson Oil Refining Company did not return the oil stated in this stipulation for assessment and taxation in Osage county for the years stated in the stipulation and that it was the oil of the defendant.

"It is further stipulated that the oil in these booster tanks along the pipe line was purchased from various producers in Osage county, and that when such oil was run from the tanks on the producing lease into the gathering line which conveyed it to these booster tanks that it became the oil of the defendant upon leaving the tanks on the lease and running into the gathering line which conveyed it to the booster tanks."

¶5 The property owner introduced additional evidence in the trial court amplifying the foregoing stipulation and explaining in a more detailed manner the purpose and use of the booster tanks in connection with the transportation of crude oil through pipe lines. This evidence tended to establish that the flow of oil through the booster tanks was a mere incident to the transportation thereof.

¶6 In deciding the case the trial court made the following pertinent finding, which is incorporated in the journal entry: "And now on this 5th day of February, 1934, this matter comes on for decision, and after due consideration the court, being fully advised in the premises, finds that the oil involved in this case was in what is known as working tanks, and was on the 1st day of January of each year, from 1927 to 1933, both inclusive, actually in transit from the point where such oil was received by the Johnson Oil Refining Company to its refinery in Pawnee county, Okla., but that such oil was physically present in Osage county, and, although in transit, had a taxable situs in said county on the 1st day of January of each year, beginning with 1927 to and including 1933, and that the same should be extended on the tax rolls of said Osage county for taxation for said years."

¶7 The question of whether oil produced immediately prior to the first day of January on which the gross production tax has been paid is exempt from ad valorem taxation by reason of the payment of the gross production tax, is not presented in this appeal.

¶8 We shall, therefore, in this opinion, treat the property involved as subject to the burden of ad valorem taxation, unless it should be relieved from that burden for the reasons herein urged by the property owner.

¶9 It is contended in the brief of the property owner that the crude oil involved should escape taxation or be classified as exempt, for the reason that on the first day of January it was in transit from one point to another within the state of Oklahoma. The property owner asserts that there is a direct analogy between property in transit in interstate commerce and property in transit in intrastate commerce, and that, since the former, under the decisions of the Supreme Court of the United States, is not subject to local taxation in a state through which it is passing, the latter should be exempted or excused from taxation in a state where it is moving from one point to another. The asserted analogy is based upon a misconception of the scope and purpose of the interstate commerce cases. Those cases do not purport to exempt the property in transit from any and all taxes. They merely excuse such property from local taxation in a state in which it has no taxable situs. They tend to prevent double taxation and eliminate the possibility of an unwarranted interference by local taxing authorities with property flowing through the channels of interstate commerce, which is a matter purely within the control of our national government. They deal with the question of where property may be taxed as distinguished from the question of whether it is subject to taxation. Thus the Interstate Commerce Commission cases are of no assistance in determining whether the property involved in this action is taxable, although, as we subsequently point out, they have a persuasive influence in determining what constitutes a situs for the purpose of taxation in so far as that question is not controlled by the statutes of this state.

¶10 The property owner fails to call our attention to any constitutional provision or statute of this state which would exempt from taxation tangible personal property merely because it is in transit from place to place within the state. An examination of the applicable constitutional and statutory provisions completely negatives the idea of such an exemption.

¶11 Section 50, art. 5, of the state Constitution provides that:

"The Legislature shall pass no law exempting any property within this state from taxation, except as otherwise provided in this Constitution."

¶12 Section 6 of art. 10 of the Constitution deals with the classes of property that may be excused from taxation. It contains no suggestion that property in transit from one point to another within the state may be treated as exempt.

¶13 Section 12317, O. S. 1931, provides in part:

"All property in this state, whether real or personal, including the

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