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Volume 3 - Opinions of Counsel SBEA No. 118

Opinions of Counsel index

Real property, definition of (prilling tower) - Real Property Tax Law, § 102(12)(f):

In the absence of evidence proving the economically feasible movability of a prilling tower, such tower is taxable real property.

We have received an inquiry concerning the taxable status of a prilling tower. The tower is necessary for the transforming of a liquid nitrogen substance into a dry solid substance called a prill. The prilling tower is 161 feet high and 35 feet in diameter. It is composed of 21 “rings”, varying in size from 4′ 8″ to 8′ 1/2″ bolted together. It was prefabricated and then moved to its present site as a unit. It is bolted to the foundation. It is located beside a building and not in it. There have been no instances of such a tower being moved from one place to another (there apparently being only three other similar towers in the country as the process carried on therein is relatively new). However, it is contended that such a tower is movable, and that it would probably be cheaper to move it than to put in a brand new one, depending on the size tower needed in the new location.

The process carried on in this prilling tower is described as follows: solid ammonium nitrate is conveyed by air to the top of the tower where it is melted and drops into a prilling bucket as a liquid. From the bucket this liquid is spun out to the sides and cooled on the way to the bottom. Two large fans draw air up from the bottom to cool the prills.

Our opinion is requested as to whether this prilling tower is exempt real property under paragraph (f), subdivision 12 of section 102 of the Real Property Tax Law.

The structure is exempt from taxation pursuant to this section if the facts are as follows:

1. it must be movable machinery or equipment;
2. it must not be essential to the support of a building or other structure;
3. the property must be removable without material injury;
4. it must be used for trade or manufacture; and
5.  the property must be owned by a corporation taxed under Article 9-A of the Tax Law.

Most of these requirements are clearly met by the facts as given. The tower is located alongside a building and not in it and therefore could not be said to be essential to the support of the building or other structure (condition No. 2).

It would also appear that conditions 3, 4 and 5 are equally satisfied by the facts.

The one problem appears to be with the question of the movability of the tower. The Court of Appeals, in the case of 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, found certain furnaces of the Bethlehem Steel Company taxable as real property. The property in that case was described (at pages 531 to 533) as follows:

They are, essentially, substantial masonry structures, some of great size, reinforced or contained by steel shells or buckstays.

Some idea of the monumental size of the 7 blast furnaces is suggested by the fact that an average of 200 carloads of brick was required to construct the masonry in each of them. They average about 150 feet in height, have a hearth diameter of 21 to 29 feet and rest on heavy concrete foundations which are supported by pilings driven to bedrock. Concededly, neither the masonry nor the foundations could be moved and while, conceivably, the steel shell encasing the blast furnace masonry stack could be moved, this could be accomplished only by dismantling or cutting it (by acetylene torch) into pieces of movable size. The 35 open hearth furnaces and 459 coke ovens -containing, in proportion to their steel shells, a greater amount of refractory masonry than do even the blast furnaces - are equally unmovable and the soaking pit furnaces include a 150 foot high smokestack of masonry and steel which would tend to further discourage any thought of moving them.

The question before us is whether, under ordinary circumstances, it would be economically feasible to move the prilling tower for reuse elsewhere in the sense that it would be cheaper than purchasing and installing a new prilling tower.

At present there are no objective criteria on this issue primarily because insufficient time has elapsed since the development of the prilling tower for one to be moved. However, the tower is made up, for the most part, of ordinary (i.e., of no special quality) steel, and that if it were to be moved any substantial distance, it would be necessary to dismantle it for transportation to its new site. In the Bethelem Steel case, supra, the evidence before the Court showed that where large steel structures fabricated of a normal quality steel must be cut up to be moved, and that where riveted, rivets must be backed out and that where welded it must be cut with an acetylene torch, it would be cheaper to build a new one and sell the old one for scrap. In the absence of expert evidence to the contrary concerning the movability of this structure, it is our opinion that the reasoning of the Court of Appeals in the Bethlehem Steel case is controlling and the prilling tower is taxable.

June 13, 1974