Request By:
Mr. John C. Whitfield
City of Madisonville
P.O. Box 195
Madisonville, Kentucky 42431
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Susan G. Leavenworth, Assistant Attorney General
You have made inquiry concerning the determination of property tax situs of tangible personal property of a corporation engaged in the coal business. You state that the corporation has questioned the validity of a City of Madisonville property tax levy due to the fact that the property which is the subject matter of the city tax was located outside of the corporate limits of the city although the corporation maintained a bank account and an office within the corporate limits of the city.
The determination of taxable situs of tangible personal property rests upon the answers to two questions of mixed law and fact: (1) Where is the domicile of the owner? (2) Has the property acquired a permanent situs other than the domicile of its owner?
The domicile of a corporation is generally determined by the location of its principal place of business. Inter-Southern Life Insurance Co. v. Milliken, Ky., 149 S.W. 875 (1912); Board of Education of Catlettsburg v. Ashland Oil and Refining Co., Ky., 350 S.W.2d 475 (1961); cf KRS 141.120(1)(b).
Generally personal property will be deemed to have the tax situs of the domicile of its owner. Semple v. Commonwealth, Ky., 205 S.W. 789 (1918); OAG 65-18. However, personal property which is permanently located at some place other than the domicile of its owner is taxable at the place of its location. Id. The difficulty, obviously, lies in determining whether a particular piece of personal property is permanently or only temporarily located at a place other than the domicile of its owner. It has been said:
". . . permanency in the sense that it must be fixed like real property is not essential to the establishment of a taxable situs for personal property. It seems to be sufficient, when in the ordinary course of business, that property is present and being used and employed with a consistent continuity and not spasmodically and temporarily. " Reeves v. Island Creek Fuel & Transporation Co., Ky., 230 S.W.2d 924, 927 (1950).
As the foregoing illustrates, no precise determination of taxable situs of personal property is possible by reference to abstract principles alone. Each case must necessarily rest upon its own facts. Thus, we cannot make the specific determinations you have requested us to make in your letter, we can simply offer the foregoing rules for your application. You may find additional aid in looking at the American Law Reports Annotation concerning situs of tangible personal property, 2 A.L.R.4th 432.