Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Appeal of Goddard

April 4, 2008

IN THE MATTER OF THE APPEAL OF GODDARD, JERRY D. & PAT, FROM AN ORDER OF THE DIRECTOR OF TAXATION DENYING APPLICATION FOR EXEMPTION FROM AD VALOREM TAXATION IN CLOUD COUNTY, KANSAS.


Appeal from Kansas Board of Tax Appeals.

SYLLABUS BY THE COURT

1. In general, taxation is the rule, and exemption the exception. Constitutional and statutory provisions exempting property from taxation are to be strictly construed against the party claiming exemption, and all doubts are to be resolved against exemption.

2. K.S.A. 2007 Supp. 79-201j(a) exempts from ad valorem taxation farm machinery and equipment, which is defined by the statute as that personal property actually and regularly used in any farming or ranching operation. The term "farming or ranching operation" includes the operation of a feedlot, the performing of farm or ranch work for hire, and the planting, cultivating, and harvesting of nursery or greenhouse products for sale or resale.

3. The fundamental rule of statutory construction is that the intent of the legislature governs if that intent can be ascertained. The legislature is presumed to have expressed its intent through the language of the statutory scheme. Ordinary words are given their ordinary meanings. When a statute is plain and unambiguous, the court must give effect to the intention of the legislature as expressed, rather than determine what the law should or should not be.

4. In seeking the ordinary meaning of the term "farming," we mayexamine other statutes of interest. For purposes of the corporate code in Kansas, farming means the cultivation of land for the production of agricultural crops, the raising of poultry, the production of eggs, the production of milk, the production of fruit or other horticultural crops, grazing, or the production of livestock. Farming does not include the production of timber, forest products, nursery products or sod, and farming does not include a contract to provide spraying, harvesting, or other farm services. K.S.A. 17-5903(h).

5. Under the facts of this case, taxpayers' sawmill operation does not constitute farming, and the associated machinery and equipment is not exempt under K.S.A. 2007 Supp. 79-201j(a). A sawmill is not a farming operation; rough-cut lumber, even in its early stages, must be regarded as a manufactured article, and a sawmill is a processing or manufacturing establishment.

6. In re Tax Appeal of Collingwood Grain, Inc., 257 Kan. 237, 250-52, 891 P.2d 422 (1995), is distinguished.

7. The fact that a sawmill processes lumber based on client specifications further demonstrates that the line between farming and processing or manufacturing was crossed by the lumbering activities at the sawmill.

The opinion of the court was delivered by: Greene, J.

Affirmed.

Before RULON, C.J., MARQUARDT and GREENE, JJ.

Jerry and Pat Goddard (taxpayers) appeal an order of the State Board of Tax Appeals (BOTA) denying in large part their claim for an exemption from ad valorem tax on equipment utilized in their tree harvesting and sawmill operation pursuant to K.S.A. 2007 Supp. 79-201j(a), arguing that BOTA misconstrued and applied the operative statute and that its order was otherwise arbitrary and capricious. Concluding that taxpayers' sawmill operation is not "farming" for purposes of the exemption statute, we affirm BOTA.

Factual and Procedural Background

Taxpayers harvest cottonwood trees and operate a sawmill in Cloud County for the sole purpose of cutting the harvested cottonwood logs into rough boards for shipment to a manufacturer of shipping pallets and wooden crates. When the Cloud County Appraiser sought to assess ad valorem taxes on their machinery and equipment, taxpayers filed their application for an exemption on their sawmill equipment and yarding tractor pursuant to 79-201j(a), the statutory exemption for farm machinery and equipment.

In response to the application, the Cloud County Appraiser recommended no relief, stating:

"The applicant manufactures shipping pallets and crates for use primarily by farm equipment manufacturers. It would seem to the county that the applicant produces a product which can be used by a number of different businesses and is ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.