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Volume 3 - Opinions of Counsel SBEA No. 60

Opinions of Counsel index

Real property, definition of (gas collection pipelines) - Real Property Tax Law, § 102(12) (e):

Gas collection pipelines are taxable real property. Whether such property is to be assessed separately or as part of a well depends upon the valuation approach.

We have received an inquiry as to whether gas collection pipelines are taxable real property and, if so, should they be separately assessed or assessed as part of the well.

Pursuant to subdivision 12(e) of section 102 of the Real Property Tax Law, real property for taxation purposes means and includes “[m]ains, pipes and tanks permitted or authorized to be made, laid or placed in, upon, above or under any public or private street or place for conducting steam, heat, water, oil, electricity or any property, substance or product capable of transportation or conveyance therein or that is protected thereby”. Accordingly, gas collection pipelines are real property and are taxable.

In valuing such property for assessment purposes it is our understanding that assessors use one of two approaches. The lines may be separately assessed when valued on a reproduction cost less depreciation basis, assuming the property would be replaced. Using an income approach, we are informed that the income is computed on the price per barrel of production at the collecting point and the investment in the collection lines as well as the wells is reflected in this approach. Therefore, in the latter case there would be but one assessment.

November 20, 1973

Updated: