{ "id": 8522586, "name": "IN THE MATTER OF THE APPEAL OF CONE MILLS CORPORATION", "name_abbreviation": "In re the Appeal of Cone Mills Corp.", "decision_date": "1993-11-02", "docket_number": "No. 9210PTC1053", "first_page": "539", "last_page": "542", "citations": [ { "type": "official", "cite": "112 N.C. App. 539" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "253 S.E.2d 912", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1979, "opinion_index": 0 }, { "cite": "297 N.C. 48", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8566826 ], "year": 1979, "opinion_index": 0, "case_paths": [ "/nc/297/0048-01" ] }, { "cite": "345 S.E.2d 392", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "parenthetical": "quoting In re Rogers, 297 N.C. 48, 253 S.E.2d 912 (1979)" } ], "opinion_index": 0 }, { "cite": "316 N.C. 734", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4695439, 4703407, 4696337, 4694033, 4704797 ], "year": 1986, "pin_cites": [ { "parenthetical": "quoting In re Rogers, 297 N.C. 48, 253 S.E.2d 912 (1979)" } ], "opinion_index": 0, "case_paths": [ "/nc/316/0734-01", "/nc/316/0734-04", "/nc/316/0734-05", "/nc/316/0734-03", "/nc/316/0734-02" ] }, { "cite": "339 S.E.2d 681", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "parenthetical": "quoting In re Rogers, 297 N.C. 48, 253 S.E.2d 912 (1979)" } ], "opinion_index": 0 }, { "cite": "79 N.C. App. 335", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8520687 ], "year": 1986, "pin_cites": [ { "parenthetical": "quoting In re Rogers, 297 N.C. 48, 253 S.E.2d 912 (1979)" } ], "opinion_index": 0, "case_paths": [ "/nc-app/79/0335-01" ] }, { "cite": "429 S.E.2d 561", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1993, "opinion_index": 0 }, { "cite": "333 N.C. 533", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2546975 ], "year": 1993, "opinion_index": 0, "case_paths": [ "/nc/333/0533-01" ] }, { "cite": "424 S.E.2d 212", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1993, "opinion_index": 0 }, { "cite": "108 N.C. App. 383", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524408 ], "year": 1993, "opinion_index": 0, "case_paths": [ "/nc-app/108/0383-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 105-345.2", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 105-273", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 3, "pin_cites": [ { "page": "(8a)" }, { "page": "(19)" }, { "page": "(8a) and (19)" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 105-275", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "pin_cites": [ { "page": "(34)" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 105-274", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 } ], "analysis": { "cardinality": 417, "char_count": 7396, "ocr_confidence": 0.739, "pagerank": { "raw": 2.0446031217563963e-07, "percentile": 0.7505761918938131 }, "sha256": "a2763ee8669e376b5ec0e91c6791d02f185df8c814012bd3c889b7dc1cb66da5", "simhash": "1:85fc14ca877f1cf2", "word_count": 1178 }, "last_updated": "2023-07-14T15:48:17.524906+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges LEWIS and MARTIN concur." ], "parties": [ "IN THE MATTER OF THE APPEAL OF CONE MILLS CORPORATION" ], "opinions": [ { "text": "WELLS, Judge.\nAccording to N.C. Gen. Stat. \u00a7 105-274:\n(a) All property, real and personal, within the jurisdiction of the State shall be subject to taxation unless it is:\n(1) Excluded from the tax base by a statute of statewide application enacted under the classification power accorded the General Assembly by Article V, \u00a7 2(2), of the North Carolina Constitution, or\n(2) Exempted from taxation by the Constitution or by a statute of statewide application enacted under the authority granted the General Assembly by Article V, \u00a7 2(3), of the North Carolina Constitution.\nN.C. Gen. Stat. \u00a7 105-275(34) designates inventories \u201cowned by retail and wholesale merchants\u201d as a special class of property which \u201cshall not be listed, appraised, assessed, or taxed.\u201d Inventories are defined as \u201cgoods held for sale in the regular course of business by manufacturers, retail and wholesale merchants, and contractors.\u201d N.C. Gen. Stat. \u00a7 105-273(8a). Wholesale merchant is defined as\na taxpayer who is regularly engaged in the sale of tangible personal property, acquired by a means other than manufacture, processing, or producing by the merchant, to other retail or wholesale merchants for resale or to manufacturers for use as ingredient or component parts of articles being manufactured for sale.\nN.C. Gen. Stat. \u00a7 105-273(19).\nTaxpayer argues that because it sells its used machinery and equipment from time to time the sale of its machinery and equipment meets all the requirements set forth above and is therefore excluded from taxation. We do not agree.\nThe scope of appellate review of cases from the Property Tax Commission is set by N.C. Gen. Stat. \u00a7 105-345.2, which provides in pertinent part:\n(b) So far as necessary to the decision and where presented, the court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning and applicability of the terms of any Commission action. The court may affirm or reverse the decision of the Commission, declare the same null and void, or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the appellants have been prejudiced because the Commission\u2019s findings, inferences, conclusions or decisions are:\n(4) Affected by other errors of law; or\n(5) Unsupported by competent, material and substantial evidence in view of the entire record as submitted; or\n(6) Arbitrary or capricious.\n(c) In making the foregoing determinations, the court shall review the whole record or such portions thereof as may be cited by any party and due account shall be taken of the rule of prejudicial error.\nThis statutorily mandated standard of review is known as the \u201cwhole record test.\u201d In applying this standard of review, this Court is not permitted to replace the Property Tax Commission\u2019s judgment with its own judgment even when there are two reasonably conflicting views. In re Appeal of Perry-Griffin Foundation, 108 N.C. App. 383, 424 S.E.2d 212, rev. denied, 333 N.C. 533, 429 S.E.2d 561 (1993). \u201cThe whole record test is not a tool of judicial intrusion; instead it merely gives a reviewing court the capability to determine whether an administrative decision has a rational basis in the evidence.\u201d Rainbow Springs Partnership v. County of Macon, 79 N.C. App. 335, 339 S.E.2d 681, rev. denied, 316 N.C. 734, 345 S.E.2d 392 (1986) (quoting In re Rogers, 297 N.C. 48, 253 S.E.2d 912 (1979)). In reviewing whether the whole record fully supports the Commission\u2019s decision, this Court must evaluate whether the Commission\u2019s decision is supported by substantial evidence. If substantial evidence is found, this Court cannot overturn the Property Tax Commission\u2019s decision. Id.\nThe dispositive question on appeal is whether the taxpayer is a wholesale merchant of inventories as defined by N.C. Gen. Stat. \u00a7 105-273(8a) and (19). The statutory language of The Machinery Act provides us with the clearest guidance in resolving this question.\nTo resolve this question we ask: What was the primary purpose for which taxpayer acquired the property? If the taxpayer acquired the equipment and machinery for the primary purpose of using it in the manufacture of textiles, then the equipment and machinery are not goods held for sale in the regular course of business by a wholesale merchant. If the taxpayer acquired the property for the primary purpose of resale, then the property would be excluded from ad valorem taxation.\nTaxpayer admits that the primary purpose for which it purchased the machinery and equipment was for use in its manufacture of textiles. Only when the taxpayer no longer used the machinery and equipment in its textile business did taxpayer offer it for sale. Taxpayer\u2019s annual revenues generated from the sale of used equipment and machinery totaled approximately $200,000, whereas taxpayer\u2019s annual gross revenues from the manufacture of textiles totaled approximately $500 million.\nAfter reviewing the whole record, we conclude that the Property Tax Commission\u2019s decision was supported by substantial evidence. Taxpayer acquired the property primarily for use in its manufacture of textiles and only held the goods for sale after the property was no longer useful in taxpayer\u2019s textile business. The equipment and machinery at issue were not inventory held for sale in the regular course of business by a wholesale merchant. Consequently, the property is not excluded from ad valorem taxation and the decision of the Property Tax Commission is\nAffirmed.\nJudges LEWIS and MARTIN concur.", "type": "majority", "author": "WELLS, Judge." } ], "attorneys": [ "Brooks, Pierce, McLendon, Humphrey & Leonard, by Edward C. Winslow III and Robert J. King III, for the taxpayer-appellant.", "Guilford County Attorney\u2019s Office, by County Attorney Jonathan V. Maxwell and Deputy County Attorney Gregory L. Gorham, for the taxing authority-appellee." ], "corrections": "", "head_matter": "IN THE MATTER OF THE APPEAL OF CONE MILLS CORPORATION\nNo. 9210PTC1053\n(Filed 2 November 1993)\nTaxation \u00a7 25 (NCI3d)\u2014 textile plant closed \u2014 equipment and machinery sold \u2014 property subject to ad valorem taxation\nWhere taxpayer closed one of its textile manufacturing plants and sold the equipment and machinery, the equipment and machinery were not inventory held for sale in the regular course of business by a wholesale merchant, and the property therefore was not excluded from ad valorem taxation.\nAm Jur 2d, State and Local Taxation \u00a7\u00a7 354-361.\nAppeal by taxpayer from a final decision of the North Carolina Property Tax Commission denying taxpayer\u2019s application for exclusion of personal property from ad valorem taxation. Heard in the Court of Appeals 30 September 1993.\nTaxpayer, Cone Mills Corporation, is engaged in a variety of business activities in North Carolina, including the manufacture of textiles. Taxpayer\u2019s sales of textile products generate annual gross revenues in the range of $500 million to $750 million. In November 1988, taxpayer closed one of its plants, and the textile manufacturing equipment and machinery, which was no longer in use at the plant, was sold by the taxpayer.\nOn 21 March 1990, the Guilford County Board of Equalization and Review denied taxpayer\u2019s request to classify the personal property as inventory and imposed an ad valorem tax on the sale of the property. Taxpayer appealed to the Property Tax Commission which affirmed the decision of the Guilford County Board of Equalization and Review. Taxpayer appealed.\nBrooks, Pierce, McLendon, Humphrey & Leonard, by Edward C. Winslow III and Robert J. King III, for the taxpayer-appellant.\nGuilford County Attorney\u2019s Office, by County Attorney Jonathan V. Maxwell and Deputy County Attorney Gregory L. Gorham, for the taxing authority-appellee." }, "file_name": "0539-01", "first_page_order": 569, "last_page_order": 572 }