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Office of the Attorney General

Attorney General

Bob Ferguson

AGO 1958 No. 206 - Jun 25 1958
Attorney General John J. O'Connell


Personal property such as supply inventories and repair parts for machinery of manufacturers is taxable.

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                                                                   June 25, 1958

Honorable Sid Buckley
Prosecuting Attorney
Stevens County
Colville, Washington                                                                                     Cite as:  AGO 57-58 No. 206

Dear Mr. Buckley:

            In your recent letter you requested an opinion from this office as to whether supply inventories such as repair parts used in the normal repair of the machinery of a manufacturing concern are subject to personal property taxation.  The problem arises because of a contention that only property used in the actual process of manufacturing is taxable.

            The answer to your question is in the affirmative.


            The 14th Amendment to the state constitution states:

            ". . . The word 'property' as used herein shall mean and include everything, whether tangible or intangible, subject to ownership. . . . Such property as the legislature may by general laws provide shall be exempt from taxation. . . ."

            RCW 84.04.080 reads in part:

            "'Personal property' includes, but without limitation,  [[Orig. Op. Page 2]] all goods, chattels, stocks, estates, or moneys; . . ."

            RCW 84.40.010 provides:

            "All property now existing, or that is hereafter created or brought into this state, shall be subject to assessment and taxation for state, county, and other taxing district purposes, upon equalized valuations thereof, fixed with reference thereto on the first day of January at 12 o'clock meridian in each year, excepting such as is exempted from taxation by law."

            It is therefore clear that all property within this state is taxable except such as is declared exempt by the constitution or by statute.  American Smelting Etc. Co. v. Whatcom County, 13 Wn. (2d) 295.

            The only statute we have found which is expressly concerned with the taxation of property held or owned by a manufacturer is chapter 66, § 1, Laws of 1939, (cf. RCW 84.40.210):

            "Every person who purchases, receives or holds personal property of any description for the purpose of adding to the value thereof by any process of manufacturing, refining, rectifying, or by the combination of different materials with the view of making gain or profit by so doing shall be held to be a manufacturer, and he shall, when required to, make and deliver to the assessor a statement of the amount of his other personal property subject to taxes, also include in his statement the value of all articles purchased, received or otherwise held for the purpose of being used in whole or in part in any process or processes of manufacturing, combining, rectifying or refining.  Every person owning a manufacturing establishment of any kind and every manufacturer shall list as part of his manufacturer's stock the value of all engines and machinery of every description used or designed to be used in any process of refining or manufacturing except such fixtures as have been considered as part of any parcel of real property, including all tools and implements of every kind, used or designed to be used for the first aforesaid purpose: . . ."

            This statute requires every manufacturer at the time he makes and delivers to the assessor a list of his taxable personal property to include in such list  [[Orig. Op. Page 3]] all property owned or held for the purpose of being used in any process of manufacturing, combining, rectifying or refining.  This language does not limit taxable property to that held for the purpose of converting it or combining it with other material to create a manufactured product but expressly requires a listing of all personal property subject to tax.  It was apparently the intention of the legislature to insure taxation of property which was to be altered by a manufacturing process or actually used in such process and to guard against the possibility of exempting other types of property by implication.

            There being no constitutional provision or statute exempting supply inventories such as repair parts from taxation, we conclude that they are taxable.

Yours very truly,

Attorney General

Assistant Attorney General