Opinion
No. 35305
Decided March 26, 1958.
Taxation — Personal property used in business — Rate of depreciation — Machinery and equipment used in scrap-iron yard — Depreciation rate of five per cent not unreasonable or unlawful, when.
APPEAL from the Board of Tax Appeals.
The appellants, owners and operators of a scrap-iron yard, in filing their personal property tax returns for 1952, 1953 and 1954, used a ten per cent rate of depreciation in arriving at the true value of their machinery and equipment consisting of a hydraulic press or bailer, scales, and an electrically operated overhead crane. In the "composite prima facie depreciation rates" established by the Tax Commissioner and incorporated by him in a directive of the Department of Taxation, a depreciation rate of five per cent is assigned to personal property used in the scrap-metal industry, subject to adjustment under special or unusual circumstances. Accordingly, the Tax Commissioner reduced to five per cent the rate of depreciation, thereby increasing the assessment for each of the three years.
The appeal to the Board of Tax Appeals was focused on the hydraulic press, and the board affirmed the order of the Tax Commissioner, stating in its entry:
"From the evidence before this board it can not find that special or unusual circumstances or conditions of use here exist. The burden was upon appellant to establish its right to a deviation from the terms of the directive. It has failed to maintain that burden. The order complained of must be affirmed."
An appeal from the decision of the Board of Tax Appeals brings the cause to this court for review.
Messrs. Gould Spiegel and Mr. David Reichert, for appellants.
Mr. William Saxbe, attorney general, and Mr. John M. Tobin, for appellee.
The question here presented is whether the decision of the Board of Tax Appeals is unreasonable or unlawful in holding that the rate of depreciation of the scrap-iron yard equipment should be based on a 20-year life, customarily used by the board in such cases, rather than on a 10-year life.
A reading of the entry of the Board of Tax Appeals reveals that its decision was based on a thorough consideration of the evidence. There was no appraisal of the property in question, and no evidence of its actual value was presented. The press in question was purchased by appellants in 1949 and is still in operation. No evidence was presented that any similar press became useless in a ten-year period of use. A considerable portion of the evidence is basically opinion testimony which related to presses in general rather than to the specific type of press in question.
The refusal of the board to permit the introduction in evidence of appellants' exhibit No. 3 is assigned as error. This exhibit is a compilation of a survey of the scrap-iron business. It does not show the useful life of machinery used in such busines but only depreciation rates used by those in that business. The compilation is very general in its nature, its relevancy is questioned, and, even if such exhibit was improperly excluded, the appellants could not have been prejudiced thereby.
From a careful examination of the entire record, this court is unable to find that the decision of the Board of Tax Appeals is unreasonable or unlawful. The decision is, therefore, affirmed.
Decision affirmed.
WEYGANDT, C.J., ZIMMERMAN, STEWART, TAFT, MATTHIAS, BELL and HERBERT, JJ., concur.