5D02-2406 Shultz v. Time Warner

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State: Florida

Court: Florida Fifth District Court

Docket No: 5D02-2406

Case Date: 11/10/2003

Preview:IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FIFTH DISTRICT JULY TERM 2003

RON SCHULTZ, as Property Appraiser of Citrus County, et al., Appellants, v. TIME WARNER ENTERTAINMENT COMPANY, L.P., et al., Appellee. _________________________________/ Opinion filed November 14, 2003 Appeal from the Circuit Court for Citrus County, Patricia Thomas, Judge. Denise A. Lyn of Lyn & Phipps, Inverness, and Charles J. Crist, Jr., Attorney General, Tallahassee, and Mark T. Aliff, Assistant Attorney General, Tallahassee, for Appellants. John P. Harllee, III and Kimberly A. Bald, of Harllee & Bald, P.A., Bradenton, for Appellee. CASE NO. 5D02-2406

TORPY, J. This is an ad valorem taxation dispute between the Citrus County Property Appraiser and other taxing authorities (hereinafter collectively "Appellant") and Appellee, owner of a cable television franchise, involving the propriety of the assessment of portions of Appellee's

cable system. After trial without a jury, the lower court entered judgment resolving the disputed issues in Appellee' s favor. Appellant raises one issue on appeal, whether the court erred when it determined that "exterior cable drops" are not "tangible personal property" and thus not taxable. Because we conclude that the lower court erred on this point, we reverse that portion of the final judgment. The facts pertaining to this issue are fairly simple and undisputed. Appellee's cable system originates at the point where the signal is received. The signal traverses public utility easements, either below ground or on utility poles, via coaxial cable or fiber optic tube. It is then connected to the individual subscribers' residences by "exterior cable drops," which are either aerial drops from poles or underground connections. The parties agree that the transmission lines in the public easements are taxable as the tangible personal property of Appellee. The parties also agree that the cables installed inside the subscribers' residences (the interior portion of the drops), which are not owned, and are frequently not installed, by Appellee, are not taxable to Appellee. disagreement between the parties is how to treat the exterior cable drops. Appellee admits that it owns the exterior cable drops even though they traverse subscribers' properties. Indeed, Appellee maintains the drops, replaces defective The point of

components and retains the right to remove them (albeit not exercised) if service is terminated. Furthermore, Appellee depreciates the cost of each drop on its federal income tax returns. Appellee's expert valued the drops for all tax years in issue at two million eight hundred twenty three thousand dollars ($2,823,000). Because ownership is not an issue, the only issue to be resolved here is whether the drops are tangible or intangible personal 2

property, the latter being exempt from the ad valorem taxation in question. When authorized by general law, the constitution authorizes the county to levy ad valorem taxes on everything except "intangible personal property." Art. VII,

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