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Volume 1 - Opinions of Counsel SBEA No. 69

Opinions of Counsel index

Real vs. personal property (storage cooler) - Real Property Tax Law, § 102, subdivision 12(f):

A storage cooler which is mounted on metal skids resting on a concrete slab, and owned by a restaurant (a 9-A corporation), would not be considered “machinery or equipment” but rather a building and, as such, it is not entitled to an exemption from real property taxation.

Our opinion has been requested as to whether a storage cooler installed for use in connection with a restaurant is taxable real property.

The storage cooler (8 feet wide by 22 feet long by 8 feet high) is mounted on metal skids resting on a concrete slab. The structure has been placed about thirty feet from the restaurant and electrical connections have been made. It is movable without injury and at a cost less than its value. Also, the cooler is owned by the builder and operator of the restaurant, which is a 9-A corporation, and will be used to store food sold in the restaurant.

There is no question in our minds but that the storage cooler structure would be 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 also see Marine Midland Trust Co. v. Ahern, 16 N.Y.S.2d 656. Namely, it has been annexed by the owner of the property (a structure of this size can be deemed “annexed” by its own weight); it is adapted and perhaps is even essential to the restaurant use which will be made of the property, and these circumstances indicate an intent to install permanently, i.e., as long as the property is devoted to restaurant use.

However, since the cooler is owned by a 9-A corporation, the question remains whether this structure 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.

The question presented is a close one, but in view of the fact that this is an exemption statute, we believe any doubt should be resolved against the taxpayer. City of Lackawanna v. State Board of Equalization and Assessment, 16 N.Y.2d 222, 212 N.E.2d 42, 264 N.Y.S.2d 528.

Although it has been held that the operation of a restaurant is “trade” in the sense of buying and selling a tangible property, and thus this structure is “used for trade”, we do not believe this is determinative of the issue.

The structure which you describe is, in our opinion, not “machinery or equipment” but rather a building, and therefore is no more entitled to the exemption than would, say, a tool shed of the same size and construction. As such, it is not exempt.

February 25, 1972