Industrial Cranes, Compressor System and Cameras Deemed to be Personal Property
In Tennine Corp. v. City of Grand Rapids, Michigan Court of Appeals, No. 301124, April 12, 2012, a city properly assessed a taxpayer's overhead industrial cranes, compressor system, and cameras for the 2005, 2006, and 2007 local Michigan property tax years because the personal property was not reported on the taxpayer's personal property statements. In this case, a company purchased real estate that included the industrial cranes and the compressor system. Shortly after the sale, the company quitclaimed the property to the taxpayer. The taxpayer then leased the property back to the company. Security cameras were subsequently installed on the property.
The taxpayer argued that the city improperly assessed personal property tax on the taxpayer for the value of the cranes, the compressor, and the cameras, which resulted in unlawful double taxation. The taxpayer specifically argued that the cranes and the compressor were fixtures and were already properly taxed as the taxpayer's real property, and that the company owned the cameras and had already paid the personal property tax for the cameras.
The Michigan Court of Appeals held that the cranes and the compressor were not fixtures because there was substantial evidence that the taxpayer did not intend for these items to be fixtures. A 1995 appraisal conducted pursuant to the information given by the taxpayer's general manager characterized the cranes and the compressor as personal property, and the company's 2007 equipment list included the cranes and the compressor as "non-real property."
Further, the cameras were not the company's personal property and had not already been valued on the company's personal property tax roll for the 2005, 2006, and 2007 tax years. The company's 2007 audit showed that the company did not report the cameras on its personal property statements for the relevant tax years and that the company claimed that the cameras were the taxpayer's property.