Ad Valorem Taxation: OH in Storage Constitutional Law: Commerce Clause; Complete Auto Test

摘要

For the tax years 2003 and 2004, the District includes oil located on a tank farm owned by BP. The oil is transported to the tank farm through a transportation system located in West Texas and eastern New Mexico that is regulated by the Federal Energy Regulatory Commission. The tank farm is part of that transportation system. Typically, oil is physically in the tank farm for a period from six to seventy-two hours before it is put back into the pipeline and transported elsewhere. There is a certain minimum volume of cushion oil mat remains in the - tank farm. The oil is owned by several shippers who are allocated an ownership percentage by the District. The taxpayers challenge the assessment of the oil in storage administratively without success. The trial court renders judgment that the oil is not taxable but denies the taxpayers' request for attorney's fees. Held: affirmed. The District argues that the oil constitutes tangible personal property that is subject to the ad valorem tax unless there is a specific statutory exemption. Tex. Tax Code §§ 11.01, 21.02. But the Commerce Clause of the United States Constitution restricts a local government's ability to impose their ad valorem tax on items that are in the stream of interstate commerce. The court must first determine if the oil has been placed in the stream of interstate commerce.