CRANE RENTAL OF ORLANDO v. Hausman

Citations: 518 So. 2d 395; 13 Fla. L. Weekly 125; 1987 Fla. App. LEXIS 11816; 1987 WL 29156Docket: 86-1327

Court: District Court of Appeal of Florida; December 30, 1987; Florida; State Appellate Court

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Crane Rental of Orlando, Inc. appealed a trial court's final judgment determining that its self-propelled cranes were not classified as motor vehicles under Florida law and thus were subject to ad valorem taxes. The Orange County Property Appraiser had assessed these cranes as personal property for tax purposes. Crane argued for exemption under Article VII, section 1(b) of the Florida Constitution, which pertains to motor vehicles. 

Initially, the Property Appraisal Adjustment Board ruled that the carriers for the cranes qualified as motor vehicles; however, it maintained that the cranes themselves were not part of that definition. The Appraiser subsequently sought judicial confirmation that the cranes were personal property subject to ad valorem taxes. Crane countered that the cranes should be considered motor vehicles and thus exempt.

The trial court concluded that, despite being self-propelled, the cranes were designed primarily for construction work rather than for transporting people or goods. The incidental use on highways was not sufficient to classify them as motor vehicles. The court noted that the cranes were built on integral chassis and not sold in separate components. Therefore, it affirmed that the cranes did not meet the legal definition of motor vehicles and were liable for ad valorem taxes.

The court emphasized that all property in Florida is taxable unless expressly exempted, and that exemptions must be narrowly interpreted against the claimant. It also referenced statutory definitions of motor vehicles, which include criteria related to design and intended use on highways.

The term "motor vehicle" is defined under Florida law as any self-propelled vehicle or one powered by electric overhead wires, excluding those operated on rails. In the case involving Crane, the court determined that self-propelled cranes did not qualify as motor vehicles for ad valorem property tax exemption. The court relied on Chapter 320's definition, which includes vehicles such as cars and trucks but excludes traction engines and vehicles designed solely for construction. Citing the precedent from Forbes v. Bushnell Steel Construction Co., the court noted that the cranes, despite being self-propelled and capable of operating on public highways, are primarily designed for construction use rather than for transporting persons or property. Evidence presented indicated that the cranes’ highway use is incidental, primarily for transport to construction sites. While the cranes could carry some equipment, this was ancillary to their main function as cranes. The record supported the trial court's conclusion that the cranes were designed and used as integrated units, reinforcing the determination that they do not meet the definition of motor vehicles for tax purposes.

Arguments claiming that cranes are merely equipment mounted on motor vehicles and thus subject to a partial assessment are rejected. The distinction between vehicles and attached equipment is emphasized based on their primary use. The definition of "special mobile equipment" in Chapter 316, Florida Statutes, supports this conclusion, specifying that such equipment is not primarily designed for transporting persons or property. Examples of special mobile equipment include cranes, which are categorized separately from motor vehicles. The legislature's intent is to differentiate machinery requiring public highway use for transport from vehicles primarily used to transport people or goods. 

Crane's claim that its vehicles, being subject to a license tax, are exempt from ad valorem assessment under Article VII, section 1(b) of the Florida Constitution is deemed unfounded. While the constitution exempts motor vehicles from ad valorem taxation, it does not prevent the assessment of a license tax on personal property. Evidence shows that the cranes were assessed a license tax under tax class 94, designated for vehicles that function as tools rather than hauling units. The privilege to use public highways for transport does not classify these cranes as motor vehicles exempt from personal property taxation. Legal precedents affirm that a vehicle may not be classified as a motor vehicle despite being licensed. 

Ultimately, the trial court's findings are upheld, confirming that Crane's vehicles do not function as motor vehicles for transporting property or persons but as mobile construction equipment, thereby classifying them as personal property subject to ad valorem taxation. The trial court’s final judgment is affirmed.

C.J. Upchurch concurs with the majority opinion, while Judge Cowart dissents. The case addresses the interpretation of Florida Constitution Article VII, sections 1(a) and (b), concerning the taxation of tangible personal property. The key questions are whether an item of tangible personal property that is subject to a state license tax as a motor vehicle is exempt from county ad valorem taxes, and specifically if a self-propelled mobile crane, intended for road operation as a tool, qualifies as a motor vehicle subject to such a tax. The majority answers both questions negatively, whereas the dissent argues affirmatively.

Article VII, section 1 outlines that no tax shall be levied unless prescribed by law, and it prohibits state ad valorem taxes on tangible personal property while allowing local governments to levy such taxes except on six classes of vehicular tangible personal property, which are subject to state license taxes. The provisions collectively ensure that the state cannot impose ad valorem taxes on tangible personal property but can impose a uniform license tax on designated vehicular items, thereby preventing double taxation. The Florida legislature has operationalized this by defining motor vehicles in section 320.01(1) of the Florida Statutes and establishing a state motor vehicle license tax in section 320.08. This definition encompasses various vehicles used for transporting persons or property, excluding certain types like traction engines and bicycles.

The Florida legislature, through section 320.011, has empowered the Department of Highway Safety and Motor Vehicles to categorize motor vehicles for licensing purposes, applying varied tax rates and license plate requirements based on vehicle type. Most classification codes are based on vehicle weight or length, except for tax class code 94, which pertains to vehicles like tractor cranes and well drillers designed primarily as tools rather than for hauling. Vehicles intended for both tool use and hauling must use regular truck classification plates based on their weight. Historically, truck chassis were adaptable for various purposes, allowing separate assessment for the chassis and any mounted equipment. Equipment that was secondary to the vehicle's primary function could be taxed separately. Recent technological advancements have resulted in mobile machinery where the vehicle and tool components are so integrated that they form a single unit, complicating taxation and classification. In these cases, both the vehicle and the tool become interdependent, making it impractical to separate their uses for tax purposes.

The Department of Highway Safety and Motor Vehicles has broadened the definition of vehicles under section 320.01(1)(a), Florida Statutes, to include integrated units designed as tools rather than solely for hauling. This expansion is crucial in resolving the conflict between state license taxes and county ad valorem taxes, as it is inappropriate to classify these modern integrated vehicles by their primary or secondary purposes. For instance, a school bus serves both to transport children and operate on highways, making both functions equally essential. Similarly, modern mobile tools, which can act as both vehicles and tools, fulfill their purpose through their combined functionalities. 

Farm tractors and similar machinery, however, are not categorized as motor vehicles for state motor vehicle license tax purposes, thus making them liable for county ad valorem taxes. The ruling in Forbes v. Bushnell Steel Construction Company emphasizes that voluntary licensing of such machinery does not determine its status as a motor vehicle for tax purposes. If the state tax authority recognizes an item as a motor vehicle requiring a state license, this designation prevents county assessment of ad valorem taxes on that item under article VII, section 1(b) of the Florida Constitution. A range of tool-type vehicles, such as cranes and trucks for various functions, are now manufactured and classified under state license taxes. Additionally, the legislature mandates county property appraisers to assess tangible personal property for ad valorem taxes as outlined in sections 192.011 and 192.032(2), Florida Statutes.

The excerpt outlines the legal framework governing the taxation of motor vehicles in Florida, specifically addressing the exemption from ad valorem taxes for vehicles subject to state license tax. According to section 192.001(11)(d) of the Florida Statutes, tangible personal property is defined but excludes vehicular items as prescribed by the Florida Constitution, which prohibits double taxation. Mobile cranes fall under the classification of motor vehicles, as defined by the Department’s tax code, thus subjecting them to state license tax rather than ad valorem taxes. The text emphasizes that these cranes are explicitly listed as vehicular items in Article VII, section 1(b) of the Florida Constitution, reinforcing their exemption from county ad valorem taxes. The case at hand is deemed significant for statewide public importance and calls for a reversal of the lower court's decision, affirming that these cranes are indeed classified as motor vehicles under the relevant statutes. The excerpt also references historical constitutional provisions and legislative intent regarding the taxation of motor vehicles, indicating that the principles established have not been modified or repealed. The primary question is whether the self-propelled cranes qualify as motor vehicles for the purposes of state motor vehicle license tax under section 320.08, Florida Statutes.

The Department of Highway Safety and Motor Vehicles, as per section 320.011, defines motor vehicles specifically for the purposes of licensing and taxation. Other definitions related to traffic regulation, driver licenses, and insurance are deemed irrelevant in this case. The tax class code 94 does not pertain to a license tax on personal property that is not classified as a motor vehicle. There is no authority for the Department to impose a license tax on non-motor vehicle personal property for public highway usage. The legal question involves whether the state can levy a motor vehicle license tax on an item that a county also assesses ad valorem taxes against. The dispute primarily exists between the State of Florida and Orange County, with the taxpayer being affected by the overlapping tax claims. The key issue is whether integrated, self-propelled cranes are exempt from the state motor vehicle license tax under section 320.08 and can operate on public highways without a state license tag.