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1936 OK 87
54 P.2d 155
175 Okla. 572
Case Number: 25542
Decided: 01/28/1936
Supreme Court of Oklahoma



¶0 TAXATION - Exemption of Equipment of Oil or Gas Well From Ad Valorem Tax by Reason of Payment of Gross Production Tax - Equipment not Used "Exclusively" in Operation of Well.
By virtue of section 12434, O. S. 1931, prior to amendment by chapter 103, S. L. 1933, machinery, appliances and equipment used in and around a producing oil or gas well and actually and exclusively used in the operation of such well are relieved from the burdens of ad valorem taxes by reason of the payment of gross production tax on the products of such well. However, where such property is devoted to two uses, one of which, if exclusive, would excuse it from the payment of ad valorem taxes under the gross production tax law, the other of which, if exclusive, would subject it to ad valorem taxes, and where the different component parts of such property are incapable of classification according to exclusive use, the taxable status of such property should be determined on a pro rata basis according to use, and the proportionate part of the property devoted to a use not connected with the production of oil or gas should be listed and assessed for ad valorem taxation and the value of the property should be allocated accordingly.

Appeal from County Court, Carter County; Chas. N. Champion, Judge.

Proceeding before the county treasurer to list and assess alleged omitted property of the Magnolia Petroleum Company for the years 1926 to 1933, both inclusive. On appeal to the county court there was judgment listing and assessing the property, from which judgment the property owner appealed. Reversed and remanded.

Blakeney & Ambrister and Earl A. Brown, for plaintiff in error.
Marvin Shilling, County Atty. and John E. McCain, Asst. Co. Atty., for defendant in error.


¶1 The property here involved is vacuum plants and vacuum lines leading to wells, and also vacuum lines leading from vacuum plants to gasoline plants, being similar to, if not identically of the same character as the property involved in Shaffer Oil & Refining Co. v. County Treasurer of Creek County, 175 Okla. 6, 52 P.2d 76.

¶2 The property here involved has the same dual use, and the rule announced in the Shaffer Case is controlling here. Under that rule the county court of Carter county must determine the taxable status of the property here involved on a pro rata basis according to use. See, also, Magnolia Petroleum Co. v. State, 175 Okla. 11, 52 P.2d 81.

¶3 The judgment of the trial court is therefore reversed, and the cause remanded, with directions to proceed in accordance with the views herein expressed, and in keeping with the rule announced in Shaffer Oil & Refining Co. v. County Treasurer of Creek County, supra.