APPEAL from the Circuit Court of McLean County; the Hon. JAMES
A. KNECHT, Judge, presiding.
JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:
Respondent appeals from the order of the circuit court granting the refund of a portion of real estate taxes assessed upon the value of two grain dryers and paid under protest, as provided in section 194 of the Revenue Act of 1939 (Ill. Rev. Stat. 1979, ch. 120, par. 675).
At issue is the taxability under section 18 of the Revenue Act of 1939 (Ill. Rev. Stat. 1979, ch. 120, par. 499) of two Behlem Model 850 grain dryers owned and used by petitioner in his farming operation in McLean County. At the hearing on petitioner's objection to the tax, he testified that he had been farming since 1968 and had purchased the grain dryers in 1979. Prior to the purchase he had leased this type of dryer.
The dryers are approximately 12 feet in height, 19 feet long, weigh 12,000 pounds each, and are used for drying grain produced in petitioner's farming operations. Petitioner testified that the dryers were sold with wheels, an axle, and a tongue, and could be moved with a pickup truck. Originally, the dryers had been placed upon wooden railroad ties on petitioner's farm but were later mounted on a "floating" concrete slab to enable spilled grain to be cleaned easily and prevent movement during high winds. A "floating slab" is described as concrete spread upon the ground without footing or excavation of the ground.
Petitioner testified that similar grain dryers had previously been moved from farm to farm as the demand arose, but that as presently used the dryers would remain in place, except when repairs were necessary or in the event the dryers would be sold. To move the dryers, they must be elevated sufficiently to attach the wheels, and axle, and the electrical and gas supplies must be disconnected. The electricity can be detached by uncoupling three wires, and once disconnected, the dryer can be moved with a pickup truck. According to Arthur Nafziger, a witness for respondent, the dryers had an estimated life of five to eight years.
The trial court granted the relief requested in the petition concluding that "[t]he essential character of the dryers is such that they are large useful pieces of portable equipment that do not have the permanency associated with real property or improvements thereto." It is respondent's contention that this finding is against the manifest weight of the evidence.
Taxation of petitioner's grain dryers is predicated on section 18 of the Revenue Act of 1939 (Ill. Rev. Stat. 1979, ch. 120, par. 499), which imposes a tax on "[a]ll real property in this State," unless exempted. Under section 1(13) of the Revenue Act of 1939 (Ill. Rev. Stat. 1979, ch. 120, par. 482(13)), real property is defined as:
"(13) Real Property — Real Estate — Land — Tract — Lot — Not only the land itself, whether laid out in town or city lots, or otherwise, with all things contained therein, but also all buildings, structures and improvements, and other permanent fixtures, of whatsoever kind, thereon, and all rights and privileges belonging or in anywise pertaining thereto, except where the same may be otherwise denominated by this Act. Included therein is any vehicle or similar portable structure used or so constructed as to permit its being used as a dwelling place for one or more persons, if such structure is resting in whole on a permanent foundation."
The respondent, relying on Ayrshire Coal Co. v. Property Tax Appeal Board (1974), 19 Ill. App.3d 41, 310 N.E.2d 667; Cherry Bowl, Inc. v. Illinois Property Tax Appeal Board (1981), 100 Ill. App.3d 326, 426 N.E.2d 618, and Arnold v. Crowder (1876), 81 Ill. 56, contends that the grain dryers are realty and subject to taxation under section 18 of the Revenue Act.
In Ayrshire, certain items of coal extraction equipment including coal conveyors, crushing units, and other large property used in coal processing, were classified as real property and taxed as such. The equipment was necessary to the coal extraction process conducted on the land and had been bolted onto concrete piers covering a large surface area, though it could have been moved without damage to the realty. The appellate court reversed the trial court's order which had found the property to be personally and concluded that the property was part of the real estate for tax purposes, despite the fact that the property had been assessed as personalty for the last five years. The court stated:
"Many authorities take the position that any and all machinery essential to the proper functioning of a plant, mill, or similar manufacturing is a fixture, or is at least so presumed to be, irrespective of the manner in which it is annexed to the realty and even though it is not attached thereto at all. This view is sometimes referred to as the `integrated industrial plant' doctrine and represents the modern trend of decisions. [Citations.]
Where property is adapted to the use to which the realty is devoted the use thereof in such manner furnishes such strong evidence of intent to make it a part of the freehold as not to be overcome by bookkeeping practices. [Citation.]" 19 Ill. App.3d 41, 45-46, 310 N.E.2d 667, 671.
A more recent case considering the definition of real property for purposes of taxation under section 18 of the Revenue Act of 1939 is Cherry Bowl. At issue in Cherry Bowl was the taxability of automatic pinsetters installed in plaintiff's bowling alley. In that case, the court concluded that the pinsetters were properly taxed as realty and mentioned several facts to buttress this finding: (1) the pinsetters were adapted to the use to which the building was designed; (2) the pinsetters had a useful life of 20 to 50 years; and (3) plaintiff had intended to use them while he operated the establishment.
Though these cases did not explicitly state what the proper test would be to determine whether property is real estate under section 1(13), two different approaches were mentioned and formed the basis of the courts>' reasoning: the ...