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Volume 2 - Opinions of Counsel SBEA No. 31

Opinions of Counsel index

Real property, definition of (components of refrigerated storage buildings) (in-ground scales) - Real Property Tax Law, § 102(12)(f):

Compressors and cooling coils installed in a refrigerated storage building are considered real property and, even if owned by a 9-A Corporation, are taxable as such.

A 50-ton in-ground scale is considered real property, but if owned by a 9-A Corporation, those parts of the scale which can be moved for use elsewhere are exempt from taxation.

Our opinion has been requested as to whether certain equipment installed in a refrigerated storage building is real property for taxation purposes.

The items questioned are compressors and cooling coils in the cooling system and a 50 ton in-ground scale. Apparently, the refrigerated storage building is used for storing the produce of packers and farmers.

The compressors and cooling system are typical of those installed in refrigerated storage buildings. That is, cooling coils are attached to walls throughout the storage area and motors, compressors and condensers used to produce and move the gases and liquids through the cooling coils for cooling purposes are located in a motor room.

In our opinion, it is clear that the entire cooler system, including the coils attached to the walls and the compressor-condenser, would considered real property for taxation purposes under the general principles of law applicable thereto. (People ex rel. National Starch Co. v. Waldron, 26 App. Div. 527, 50 N.Y.S. 523; see, Marine Midland Trust Co. of Binghamton v. Ahern, 16 N.Y.S.2d 656). Namely, the cooling system is being annexed by the owner of the property; it is adapted and is even essential to the use to which the building in which it is located will be applied; i.e., for cold and sharp freeze storage of food products. These circumstances, plus the fact that apparently the building in which the cooling system is being installed is designed to contain the system, denote an intent to install it permanently.

However, it appears that the owner of the building and the cooling system is a 9-A Corporation. Therefore, the question remains whether this equipment is exempt from taxation under the provisions of subdivision 12(f) of section 102 of the Real Property Tax Law as movable machinery and equipment belonging to a 9-A Corporation. It is our opinion that the components of this cooling system are not exempt under this subdivision. In previous opinions of this office, coils, motors and compressors have been considered to be an integral part of a distribution system of gases and liquids and therefore expressly excluded from the exemption.

As to the 50-ton scale, under the aforementioned general principles, the scales would be considered real property for taxation purposes.

However, again, if the owner of the building is a 9-A Corporation, then only those parts of the scale which cannot be moved for use elsewhere are taxable real property.

October 10, 1972

Updated: