Court: Michigan Court of Appeals; October 11, 1966; Michigan; State Appellate Court
An appeal by Liquid Carbonic Corporation challenges a May 14, 1964, order from the State tax commission, which assessed $829,740 as the true value of the corporation's personal property in Detroit. Liquid Carbonic, a division of General Dynamics Corporation, produces and distributes gases in metal cylinders, which remain the property of the corporation even when in customer possession. As of December 31, 1962, the assessment date for 1963 taxes, the corporation owned 46,891 cylinders, with 21,198 located in Detroit and 25,693 elsewhere in Michigan. Liquid Carbonic contends that only the cylinders in Detroit should be taxed, while the city argues that all cylinders serviced from the Detroit plant are taxable, regardless of their location on tax day.
The tax commission's key issue is whether Detroit has jurisdiction to tax all cylinders used for gas storage and transportation, given that some were temporarily outside the city. Relevant statutes indicate personal property should be assessed where the owner resides unless exceptions apply, such as when goods are located in a township where the owner has a business presence. Liquid Carbonic claims its customers control the cylinders, implying that this control, along with assumed business presence, negates Detroit's tax jurisdiction for cylinders outside the city. A precedent case, Annis Furs, Inc. v. City of Detroit, supports that property temporarily outside the city is not taxable if the owner cannot demonstrate applicable exceptions. Ultimately, the principle holds that personal property is typically taxed at the owner's residence.
The legislature intended to permit taxation of personal property under specific circumstances, but a temporary change in the location of such property does not alter its tax situs. In this case, the personal property in question retained its tax situs at the owner's residence in Detroit. The appellant failed to demonstrate that the property had a different tax situs or that it faced double taxation. The distinction between 'possession' and 'control' was crucial; while customers temporarily possessed the cylinders, the appellant maintained control over them, as they were responsible for filling and reclaiming the cylinders once empty. The tax commission's judgment was affirmed, and no costs were awarded due to the public nature of the question involved. The case also noted participation by the late Judge Watts in deliberations but not in the final opinion. Additionally, the case did not involve certain provisions of the amended statute regarding personal property in the possession of businesses for profit or a tax on possessory interests in tax-exempt property, as previously ruled unconstitutional in a related case.
