Request By:
Mr. Gene C. Royalty
Secretary, Cabinet for Economic Development
Capital Plaza Tower
Frankfort, Kentucky 40601
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Nathan Goldman, Assistant Attorney General
In your letter you ask whether property to be used as manufacturing machinery which is at the plant awaiting to be installed and put into use should be classified as manufacturing machinery or other tangible personal property.
KRS 132.020(1) states, in part: "An annual ad valorem tax for state purposes of . . . fifteen cents (15 ) upon machinery of individuals or corporations actually engaged in manufacturing . . . shall be paid by the owner . . . ." KRS 132.200(4) exempts from local taxation "Machinery and products in course of manufacture, of individuals or corporations actually engaged in manufacturing . . . ."
In
Kentucky & West Virginia Power Co. v. Holliday, 216 Ky. 78, 287 S.W. 212 (1926), the court held that the words "in course of manufacture" as used in KRS 132.200(4) do not qualify machinery.
Furthermore, in our opinion, the words "actually engaged in manufacturing" as used in both statutes modify "individuals or corporation", not "machinery. " This is based on the plain meaning of the words used and their normal syntax. This is a general rule of statutory construction.
Gateway Const. Co. v. Wallbaum, Ky., 356 S.W.2d 247 (1961);
State v. Unterseher, 289 N.W.2d 201 (ND, 1980).
Consequently, we find no limiting language in either statute as pertains to the machinery. Based on this analysis, the answer to your question would be, in our opinion, that machinery owned by an individual or corporation, which individual or corporation is actually engaged in manufacturing, and is awaiting to be installed and put into use in the manufacturing plant should be classified as manufacturing machinery at the state rate of 15 per $100 of assessed valuation and is exempt from local taxation.