ÿWPC# D# ÈUNÓ %! 0 (' 0xO 0DÇw@ 4K_nLvÂÆÊ 0J 0TÚ AQ. B 0Dœ 0@à 0D 0^d D/ 0hñ BY D3v 0r© 0| 0†— 0 1u­ 0d" U >† B)Ä DCí AM0U*}§+ªÄÕÌ™+e4µÄDyv~½vÓ;˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nLlÎ(ÈhH  Z ‹6Times New Roman RegularX($¡¡(((2¬5$¤¤Ý ƒ!ÝÝ  ÝÓ  Óà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó Å Æ Ç È É Ê DË Ì DÍ Ó€Ù n~<$(Ôô3|xÙ C:\OFFICE\WPWIN\TEMPLATE\STANDARD.WPTƒLevel 1Level 2Level 3Level 4Level 52 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô!"#%Cþÿ<< Cÿÿ d(3¯$¢¢Ý ƒ!ÝÝ  Ý("ÿÿ$££Ò  ÒÒ  Ò($$””ò òÚ  Ú1Ú  Úó ó2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô'''÷ÿ dxd26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  ÔüÿP Pd 'ÿÿdxd2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô$&)*+, ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(&Times New Roman% Line 7 d66667Border 1dd"7Cþÿ << Gÿÿ< Œ 9p`(Arial ùÝ ƒ!ÝÔ€5ÔÝ  ÝÝ ƒ!"ÝÝ  ÝÔ€9ÔÔ€9ÔÓ  ÓÔ YYY ÔFILEDÔ€9XÔÌÌò òJune€26,€1998ÌÌCecil€Crowson,€Jr.ÌÔ€9ôÔAppellate€Court€Clerkó ó !Ý ƒ!ÝÑ#€d#ÑÔ€5ÔÝ  ÝÝ ƒ$ÝÓ  Óà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€remaining€Appellees€are€Bob€Patterson,€Shelby€County€Trustee,€the€Division€ofÏProperty€Assessments€and€Shelby€County,€Tennessee.Ì ºÝ ƒ!ÝÑ#€d#ÑÔ€5ÔÝ  ÝÝ ƒ$ÝÓ  Óà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€brief€of€the€Tennessee€Assessment€Appeals€Commission,€the€Division€of€PropertyÏAssessments€and€the€State€Board€of€Equalization€indicates€that€although€this€issue€ð ðhas€beenÏresolved€for€the€purposes€of€this€proceeding,ðð€it€was€being€preserved€with€respect€to€furtherÏappeal.€€Ì ÂÝ ƒ!ÝÑ#€d#ÑÔ€5ÔÝ  ÝÝ ƒ$ÝÓ  Óà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€statute€was€enacted€May€17,€1993.Ì !Ý ƒ!ÝÑ#€d#ÑÔ€5ÔÝ  ÝÝ ƒ$ÝÓ  Óà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€answer€was€filed€on€behalf€of€appellees€Shelby€County,€Tennessee,€the€ShelbyÏCounty€Assessor€and€the€Shelby€county€Trustee€only.Ì *Ý ƒ!ÝÑ#€d#ÑÔ€5ÔÝ  ÝÝ ƒ$ÝÓ  Óà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€record€indicates€that€Kelloggððs€property€was€appraised€for€tax€year€1993€atÏ$52,136,200€with€an€ad€valorem€assessment€of€$15,640,860.€Ì «Ý ƒ!ÝÑ#€d#ÑÔ€5ÔÝ  ÝÝ ƒ$ÝÓ  Óà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€ð ðspecial€noticeðð€mailed€to€taxpayers€for€tax€year€1993€stated,€as€here€relevant:ÌÌà8 àò òSPECIAL€NOTICE;€CONSTRUCTION€IN€PROCESS€(CIP)ÌÌó óà8 àà àAs€of€January€1,€1993,€Tennessee€law€requiring€the€assessment€of€tangibleÏpersonal€property€construction€in€process€has€not€changed,€and€taxpayers€areÏinstructed€to€include€such€property€in€Group€8€of€the€Tangible€Personal€PropertyÏSchedule€unless€a€nonstandard€value€is€being€claimed.€.€.€.€ÌÌà8 àà àTangible€personal€property€construction€in€process€means€tangible€personalÏproperty€assets€or€groups€of€assets€during€a€period€of€construction€or€assemblyÏprior€to€their€being€committed€to€use,€reflecting€all€direct€and€indirect€costs€as€of€theÏassessment€date€January€1).€€This€would€include€equipment€on€location€which€hasÏnot€yet€been€placed€into€operation.ÌÌà8 àà àIf€the€legal€assessment€status€of€CIP€is€later€changed€for€tax€year€1993,€youÏwill€be€permitted€to€amend€your€schedule€at€least€until€September€of€1994.€ÓÓÌ :Ý ƒ!ÝÑ#€d#ÑÔ€5ÔÝ  ÝÝ ƒ$ÝÓ  Óà àòòÚ  ÚÚ  ÚóóÝ  ÝAs€indicated€by€the€letter€from€the€Boardððs€executive€secretary,€prior€to€this€time,€thereÏwas€only€a€ð ðgeneral€understandingðð€of€the€meaning€of€CIP.ÌPtPtHHØ(ÿáÿâùFG(üHHØ(d'`Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  ellan Geneva ÒÒ  ellan Geneva ÒÝ ƒ!ÝÔ . ÔÔ€5ÔÝ  ÝÓ  ÓÓ` Ü` ˜XÓÑ\R AØ'\ÑÑ7€¥HXXdìXXdð7ÑÑ X ÑÒ X ÒÒ X Ò›Þ ÞÌà@ àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àAT€JACKSONÌÌÌKELLOGG€COMPANY€and€à àà à)ÌKELLOGG,€U.S.A.,€INC.,à àà àà à)€€Ìà àà àà àà àà à)Ìà àà àó óPlaintiffs/Appellants,à àò ò)€€Shelby€Chancery€No.€107290„1€R.D.Ìà àà àà àà àà à)ÌVS.à àà àà àà àà à)€€Appeal€No.€02A01„9612„CH„00302Ìà àà àà àà àà à)ÌÙ€ÙœßR€8:7A1-j|5ö` Å `€€@ÿRß›TENNESSEE€ASSESSMENT€à à€à à)ÌAPPEALS€COMMISSION,€STATE€OFà à)ÌTENNESSEE,€STATE€BOARD€OF€à à)ÌEQUALIZATION;€HAROLD€S.€à àà à)ÌSTERLING,€SHELBY€COUNTYà àà à)ÌASSESSOR;€BOB€PATTERSON,€œà à›à à)ÌSHELBY€COUNTY€TRUSTEE,€STATEà à)ÌOF€TENNESSEE,€DIVISION€OF€à àà à)ÌPROPERTY€ASSESSMENTS,€and€à à)ÌSHELBY€COUNTY,€TENNESSEE,à à)Ìà àà àà àà àà à)Ìà àà àœó óDefendants/Appellees.ò ò)ó ó›ÌÌà@ àAPPEAL€FROM€THE€CHANCERY€COURT€OF€SHELBY€COUNTYÌà@ àAT€MEMPHIS,€TENNESSEEÌà@ àTHE€HONORABLE€C.€NEAL€SMALL,€CHANCELLORÌÌò òALLAN€J.€WADEÌBAKER,€œDONELSON›,€œBEARMAN›Ì&€CALDWELLÌó óMemphis,€TennesseeÌAttorney€for€AppellantsÌÌò òJOHN€KNOX€WALKUPÌAttorney€General€and€ReporterÌJOHN€J.€HANCOCKÌAssistant€Attorney€GeneralÌó óNashville,€TennesseeÌAttorney€for€Appellees€Tenn.€Assessment€Appeals€œComm›.,€ÌTennessee€State€Board€of€Equalization,€andÌState€of€Tennessee€Division€of€Property€AssessmentsÌÌò òTHOMAS€E.€WILLIAMSÌSpecial€Counsel„Shelby€County€GovernmentÌó óMemphis,€TennesseeÌAttorney€for€Appellees€Shelby€County,€Tennessee,ÌBob€Patterson,€Shelby€County€Trustee,€and€ÌHarold€S.€Sterling,€Shelby€County€AssessorÌÌò òREVERSED€AND€REMANDEDÌÌÌó óà àà àà àà àà àà àà àà àà àò òDAVID€R.€FARMER,€J.ÌÌÌÌCONCUR:ÌÌW.€FRANK€œCRAWFORD›,€œP.J.›,€œW.S.›ÌÌALAN€E.€œHIGHERS›,€J.ó óà àœÌÒ ° ÒÒ ° ÒÓÓà àKellogg›€Company€and€Kellogg,€U.S.A.,€Inc.€(hereinafter€collectively€ð ðKelloggðð),ÏÑ ° ÑÑ7€¥HXXdìXXdì7Ñappeal€from€the€judgment€of€the€trial€court€dismissing€their€ð ðpetition€for€judicial€reviewðð€on€theÏground€that€the€court€lacked€subject€matter€jurisdiction.€€The€petition€sought€review€of€the€decisionÏof€the€Tennessee€Assessment€Appeals€Commission€and€the€Tennessee€State€Board€of€EqualizationÏ(Board)€that€the€Shelby€County€Assessor× ƒ; ××  ×€€had€properly€assessed€certain€tangible€œpersonalÏproperty,›€identified€as€ð ðConstruction€In€Processðð€(CIP),€owned€by€Kellogg€on€the€effective€date€ofÏJanuary€1,€1993.€€Kellogg€paid€the€taxes€under€protest.€œThe›€chancery€court€dismissed€the€petitionÏon€the€ground€that€Kellogg€had€failed€to€first€exhaust€its€administrative€remedies€before€seekingÏjudicial€review.€€The€parties€now€agree,€in€light€of€our€supreme€courtððs€decision€in€òòò òThomas€œv.›ÏState€Board€of€Equalizationóóó ó,€940€S.W.2d€563€(Tenn.€1997),€that€the€trial€court€erred€inÏdismissing€the€petition.€œIt€is€clear›€from€the€partiesðð€briefs€that€they€further€do€not€dispute€that€thisÏmatter€is€properly€before€this€court€for€review€on€its€merits€and€that€a€remand€to€the€trial€court€isÏunnecessary.œ× ƒ< ××  ×›€€We€agree€that€Kelloggððs€petition€was€improperly€dismissed€by€the€trial€court€€andÏhereby€reverse€its€decision.€€Furthermore,€after€review€of€the€merits,€we€have€determined€that€theÏtaxation€of€Kellogg€was€improper.€€We€set€forth€our€reasons€below.ÌÌà àKelloggððs€petition€alleged€the€improper€taxation€of€its€CIP€on€the€basis€that€prior€toÏMay€17,€1993,€no€specific€statute,€promulgated€rule,€regulation€or€other€document€existed€whichÍspecifically€mentioned€or€defined€CIP€property€or€authorized€its€assessment.€€œKellogg›€asserted€thatÏthe€county€assessor€assessed€the€CIP€based€upon€a€written€ð ðdirectiveðð€from€the€Division€ofÏProperty€Assessments€which€was€contrary€to€the€established€policies€and€procedures€of€the€BoardÏand€unsupported€by€any€established€Board€rule€or€regulation.€€It€was€asserted€that€this€change€inÏpolicy€governing€CIP€assessment€was€neither€promulgated€by€the€Board€nor€in€accordance€with€theÏœUniform›€Administrative€Procedures€Act,€T.C.A.€€Ô€9ÔððÔ€5Ô4„5„101€òòet€seq.óó,òò€œóósince€the›€rule€œmaking€was›€notÏpreceded€œby›€notice€and€a€public€hearing.€€Kellogg€alleged€that,€for€tax€years€prior€to€1994,ÏTennessee€law€did€not€authorize€the€taxation€of€CIP€until€such€construction€was€completed€andÏplaced€in€service.€€Kellogg€noted€that€under€federal€income€and€state€excise€tax€rules,€CIP€costs€areÏnot€capitalized€and€depreciated€until€placed€in€service€and€maintained€that€the€ð ðlong€establishedÏruleðð€adopted€by€the€Board€follows€the€federal€tax€guidelines.€€It€was€further€asserted€that€theÏassessor€made€no€attempt€to€properly€classify€personal€property€which€was€to€comprise€CIP€andÏthat€the€Divisionððs€directive€did€not€take€into€account€the€difficulty€in€classifying€component€partsÏuntil€the€time€when€they€are€completed€and€placed€in€service.€€ÌÌà àKellogg€further€contended€that€a€œð ðsignificant›€œportionðð›€of€the€CIP€assessed€was€forÏlabor€and€freight€which€œð ðare›€not€capitalized€as€a€part€of€the€depreciable€cost€of€CIP€until€theÏconstructive€personalty€is€completed€œand€placed›€in€œservice.ð𛀀Thus,€it€was€asserted€that€until€CIP€isÏfunctional,€labor€and€freight€costs€are€non„capitalized€current€expenditures€and€not€personalÏproperty.€€œKellogg€also›€maintained€that€the€assessment€of€CIP€was€premature€because€theÏcomponent€parts€of€machinery,€equipment€and€real€estate€are€not€assessable€until€completed€andÏplaced€in€service€pursuant€to€generally€accepted€accounting€principles€and€Board€rules.€€KelloggÏtherefore€sought€an€adjustment€of€the€depreciation€factors€for€the€finished€product€into€which€CIPÏis€incorporated€to€reflect€an€earlier€commencement€date€for€depreciation€of€that€particular€item€ofÏpersonalty€other€than€that€usually€contemplated€by€current€depreciation€factors€adopted€by€theÏœBoard,€if€the€assessment€was€upheld.›€€ÌÌà àFinally,€Kellogg€pointed€to€the€legislatureððs€enactment€of€T.C.A.€ðð€67„5„903(g),× ƒ= ××  ×Ïproviding€for€CIP€to€be€valued€at€15%€of€its€reported€œcost,›€effective€January€1,€1994.€€KelloggÏmaintained€that€CIP€œshould€therefore›€not€be€assessed€prior€to€œthe›€effective€date€or,€alternatively,ÏKellogg€asserted€that€the€statute€should€be€construed€so€as€to€reduce€the€valuation€basis€of€CIP€toÏœ15%€of€cost›€for€tax€year€1993€as€opposed€to€the€100%€that€had€been€assessed.€€In€regard€to€theÏlatter,€Kellogg€contended€that€in€light€of€the€statuteððs€requirement€that€no€back€assessments€relativeÏto€CIP€were€to€be€made€prior€to€January€1,€1994€and€that€all€taxes€collected€from€such€assessmentsÏwere€to€be€refunded,€€it€was€not€the€legislatureððs€intent€to€permit€valuation€of€CIP€at€100%€of€costÏon€only€those€taxpayers€who€voluntarily€complied€with€the€stateððs€reporting€regulations€for€theÏ1993€tax€year,€or€to€disregard€that€tax€year€in€terms€of€the€statuteððs€applicability.€Consequently,ÏKellogg€sought€a€determination€from€the€trial€court€that€the€assessment€of€its€CIP€property€wasÏvoid€as€having€been€made€without€legal€authority€or,€alternatively,€that€it€was€entitled€to€a€reductionÏin€its€1993€assessment€valuation€of€CIP€to€15%€and€that€labor,€freight€and€other€expenditures€notÏrelated€to€the€acquisition€costs€of€CIP€were€to€be€excluded€from€its€value.€€Kellogg€also€sought€aÏrefund€of€all€or€a€portion€of€the€personal€property€taxes€œð ðerroneously›€œassessed›€and€œcollectedðð›€forÏtax€year€1993.€€ÌÌà àKellogg€amended€its€complaint€to€assert€that€ðð€67„5„903(g)€is€discriminatory€on€itsÏface€and€mandates€unequal€treatment€under€the€law.€€It€was€also€alleged€that€Appelleesðð€assessmentÏof€CIP€prior€to€May€17,€1993€violated€Article€2,€ðð€28€of€the€state€constitution€since€the€legislatureÏð ðhas€not€established€the€ratio€of€assessment€to€value€of€[CIP]€so€that€it€will€be€equal€and€uniformÏthroughout€the€state€nor€has€the€Tennessee€General€Assembly€directed€the€manner€in€which€theÏvalue€of€[CIP]€prior€to€May€17,€1993€will€be€ascertained€and€the€Tennessee€General€Assembly€hasÍnot€defined€the€property€constituting€œ[CIP].ðð›ÌÌà àIn€answering€the€petition,€Appellees× ƒ> ××  ×€asserted€that€the€taxation€of€CIP€ð ðwas€wellÏwithin€the€contemplation€of€statutes€relating€to€the€assessment€of€tangible€personal€propertyÏincluding€ðð€67„5„901€òòò òet€œseq.óóó óð𛀀They€acknowledged€that€CIP€ð ðwas€not€specifically€enumerated€inÏvarious€manuals€or€regulations€prior€to€1993,ðð€but€argued€that€it€was€œð ðincluded›€sufficiently€withinÏthe€definitions€and€context€of€property€that€the€Tennessee€Constitution€requires€to€be€taxed.ðð€ÏœAppellees›€further€admitted€that€the€Board€followed€the€federal€tax€principle€that€the€cost€ofÏpersonalty€is€not€capitalized€and€depreciated€until€it€is€operational€and€placed€in€service.ÌÌà à€A€hearing€was€œheld€on€September€20,€1995›€before€the€administrative€law€judgeÏ(ALJ)€œ›€who€made€the€following€factual€findings:ÌÌÓÓà8 àà àIn€tax€year€1993,€the€taxpayer€timely€filed€a€tangible€personalÏproperty€schedule€with€the€Assessor€on€the€prescribed€form.€€ThisÏschedule€was€accompanied€by€a€letter€from€the€taxpayer€stating€(inÏrelevant€part)€as€follows:ÌÌà8 àà8 àTo€comply€with€instructions€issued€by€the€ShelbyÏCounty€Assessorððs€Office,€we€have€includedÏConstruction€in€Process€(C„I„P)€of€$14,165,589€inÏthe€$21,279,289€reported€as€ð ðRaw€Materials€andÏSuppliesðð€in€Group€8.€€We€hereby€protest€theÏinclusions€of€the€C„I„P€as€reportable€property€andÏreserve€the€right€to€raise€any€and€all€issues€pertainingÏto€the€assessment€of€this€property.ÌÌà8 àà àThe€taxpayers€did€in€fact€complain€to€the€Shelby€CountyÏBoard€of€Equalization€that€the€C„I„P€portion€of€the€subject€accountÏwas€unlawfully€assessed.€€After€the€county€board€refused€to€grantÍrelief,€the€taxpayer€filed€this€appeal.œ× ƒ? ××  ×›€ÌÌÌÌÓÓà àThe€ALJ€upheld€the€assessment€of€Kelloggððs€œCIP,›€finding€ð ðno€legal€basis€forÏexemption€of€such€property€from€ad€valorem€œtaxation.ðð.›€€œThe€ALJ›€found€no€merit€in€KelloggððsÏclaim€of€inequitable€assessment,€ruling€that€although€some€taxpayers€may€have€escaped€CIPÏassessment,€such€did€not€warrant€the€setting€aside€of€a€proper€assessment.€€The€ALJ€further€heldÏthat€T.C.A.€ðð€67„5„903(g)€was€limited€to€back€assessments€of€CIP€with€respect€to€tax€year€1993Ïand€that€100%€of€reported€cost€was€the€proper€valuation€of€CIP,€irrespective€of€its€treatment€forÏfederal€income€or€state€excise€tax€purposes.€€Thereafter,€the€Assessment€Appeals€CommissionÏissued€its€official€certificate€certifying€the€ad€valorem€assessment€of€Kelloggððs€property.€ÌÌà àWe€perceive€the€sole€issue€on€appeal€as€whether€the€appelleesðð€assessment€ofÏKelloggððs€CIP€property€for€tax€year€1993€was€proper.€€Resolution€of€this€issue€necessarilyÏinvolves€statutory€interpretation.€T.C.A.€ðð€67„5„903(g)(1)„(2)€states€as€follows:ÌÌÓÓà8 àà àTangible€personal€property€which€the€taxpayer€treats€asÏconstruction„in„process€(hereinafter€ð ðCIPðð)€for€federal€income€taxÏpurposes€as€of€the€assessment€date€may€be€reported€in€the€taxpayerððsÏschedule€filed€with€the€assessor€at€fifteen€percent€(15%)€of€its€costÏas€reported€for€federal€income€tax€purposes.€€Qualified€pollutionÏcontrol€property€shall€be€valued€as€provided€in€ðð€67„5„604,Ïnotwithstanding€its€state€of€completion.ÌÌà8 àà àNo€back€assessments€of€CIP,€as€the€term€is€used€inÏsubdivision€(g)(1),€shall€occur€prior€to€January€1,€1994.€€If€backÏassessments€have€occurred€involving€CIP,€those€assessments€shallÏbe€voided€and€all€taxes€paid€shall€be€refunded€to€those€taxpayersÏwho€have€an€action€or€claim€pending€before€assessing€authority€orÏcourt€on€the€CIP€issue.€€ÌÌÓÓœÌà àThe›€premier€rule€of€statutory€construction€is€to€ascertain€and€give€effect€to€theÏlegislative€intent.€€In€ascertaining€this€intent,€we€are€to€look€to€the€general€purpose€to€beÏaccomplished€by€the€legislature.€€òòò òTidwell€v.€Collinsóóó ó,€522€S.W.2d€674€(Tenn.€1975).€€TheÏlegislative€intent€or€purpose€is€to€be€ascertained€primarily€from€the€natural€and€ordinary€meaning€ofÏthe€language€used€when€read€in€the€context€of€the€entire€statute€and€without€any€forced€or€subtleÏconstruction€to€limit€or€extend€the€import€of€the€language.€€òòò òWorrall€v.€Kroger€Co.óóó ó,€œ545›ÏS.W.2d€736,€738€(Tenn.€1977);€òòò òCity€of€Caryville€€v.€Campbell€Countyóóó ó,€660€S.W.2d€510,Ï512€(Tenn.€App.€1983).€€This€court€is€to€reconcile€inconsistent€or€repugnant€provisions€of€theÏstatute€and€to€construe€the€statute€so€as€to€avoid€an€interpretation€that€would€render€any€of€theÏlanguage€superfluous,€void€or€insignificant.€€We€are€to€give€effect€to€every€word,€phrase,€clauseÏand€sentence€of€the€act€in€order€to€derive€the€legislatureððs€intent.€€Each€section€is€to€be€construed€soÏthat€no€section€will€destroy€another.€€œòòò òDingman›€v.€œHarvellóóó ó,›€814€S.W.2d€362,€366€(Tenn.€App.Ï1991).Ìà àÌà àœThe€record€reveals€that€Kellogg›€served€the€appellees€with€a€request€for€admissions,Ïincluding€that€ð ð[p]rior€to€May€17,€1993,€there€was€no€statute,€regulation,€administrative€rule,Ïdirective,€or€other€authority€authorizing€or€directing€the€taxation€of€ð ð[CIP].ðð€€Appellees€ð ð[d]enied€asÏstatedðð€the€request€and€answered€as€follows:ÌÌÓÓà8 àà àTenn.€Code€Ann.€ðð€67„5„901€provides€that€tangible€personalÏproperty€not€in€use€shall€nevertheless€be€classified€according€to€itsÏimmediate€most€suitable€economic€use€determined€in€part€byÏð ðimmediate€past€use,€òòò òif€anyóóó óðð€(emphasis€added).€€Tenn.€Code€Ann.Ïðð€67„5„903€provides€that€business€taxpayers€shall€report€to€theÏassessor€for€assessment,€tangible€personal€property€which€is€ð ðusedÏòòò òor€held€for€useóóó ó€in€such€businessðð€(emphasis€supplied).€€TheseÏstatutes€were€in€effect€prior€to€May€17,€1993,€and€they€remain€inÏeffect€today.ÌÌà8 àà àRule€0600„5„.11€of€the€State€Board€of€Equalization€sets€forthÏthe€standard€reporting€form€for€business€tangible€personal€propertyÏand€requires€that€property€be€listed€if€it€is€used€òòò òor€held€for€useóóó ó€byÍthe€reporting€business.€€This€rule€has€been€in€effect€since€at€leastÏ1989,€and€this€form€has€been€furnished€annually€to€taxpayers€forÏmany€years,€and€included€instructions€which€also€required€reportingÏof€property€used€or€held€for€use.€€In€addition,€a€special€notice€toÏtaxpayers€was€sent€with€the€1993€schedules€in€late€1992€or€earlyÏ1993,€which€contained€specific€definitions€and€directions€concerningÏCIP.œ× ƒ@ ××  ×›ÌÌÌÌÓÓThe€appellees€admitted€that€prior€to€May€17,€1993,€there€were€no€statutes,€regulations,€orÏadministrative€rules€specifically€defining€CIP€but€denied€that€there€were€no€ð ðdirectivesðð€definingÏsuch€prior€to€that€time.€€œThe›€appellees€denied€that€the€Board€had€failed€to€promulgate€any€rulesÏregarding€the€taxation€of€CIP€and€cited€rules€0600„5„.01,€0600„5„.06€and€0600„5„.11.€€Finally,ÏAppellees€denied€that€prior€to€May€17,€1993,€there€was€no€statute€directing€the€manner€of€valuingÏCIP,€stating€that€T.C.A.€ðð€67„5„903€ð ðprovided€standard€methods€of€valuation€for€all€tangibleÏpersonal€property€whether€used€ò òòòor€held€for€use,€óóó óand€the€statute€provided€that€all€property€notÏlisted€in€another€group€be€listed€in€one€of€the€several€groups€by€type€or€be€listed€in€Group€1€of€theÏstandard€schedule€.€.€.€œ.ðð›ÌÌà àThe€record€also€includes€a€letter€dated€August€24,€1993€from€the€Boardððs€executiveÍsecretary€to€the€state€attorney€general€requesting€the€latterððs€opinion€ð ðconcerning€Public€ChapterÏ323€of€1993,€which€creates€special€property€tax€assessment€provisions€for€tangible€personalÏproperty€construction„in„process€(CIP).ðð€€œIt›€reads€as€follows,€as€here€pertinent:ÌÌÓÓà8 àà àTangible€personal€property€ð ðused€or€held€for€useðð€inÏbusiness€is€reported€annually€by€businesses€using€a€scheduleÏprovided€by€the€assessor€and€approved€by€the€state€Division€ofÏProperty€Assessments€(DPA).€.€.€.€Under€rules€of€the€State€BoardÏ(Chapter€0600„5),€taxable€value€is€presumed€(in€the€absence€ofÏbetter€evidence)€to€be€the€taxpayerððs€original€cost€less€straight€lineÏdepreciation,€with€the€amount€of€standard€depreciation€based€onÏcategories€of€property€established€by€the€legislature.€€òòNeither€theÏstatutes€(prior€to€1993),€the€rules,€nor€the€state€constitution€mentionÏCIP,€and€in€1991,€confusion€arose€concerning€its€assessment€status.€ÏCIP€is€generally€understood€to€mean€personalty€which€has€a€taxableÏsitus€at€the€taxpayerððs€place€of€business€as€of€the€assessment€dateÏbut€which€is€not€yet€in€operation.€€CIP€can€range€from€unopenedÏcrates€of€ready„to„use€equipment€to€complex€arrays€of€unassembledÏor€partly€assembled€components,€and€the€final€cost€may€includeÏsubstantial€labor€costs€for€installation€and€assembly.óóÌÌà8 àà àWhen€asked€about€the€assessment€statutes€of€CIP,€stateÏassessment€staff€found€it€to€be€property€ð ðheld€for€useðð€in€businessÏand€therefore€assessable,€and€DPA€issued€instructions€whichÏaccompanied€schedules€mailed€to€taxpayers€for€tax€years€1992€andÏ1993.€€On€the€theory€that€CIP€was€not€yet€in€operation€and€thereforeÏnot€depreciable,€the€instructions€directed€taxpayers€to€report€CIP€in€aÏnondepreciable€category€reserved€for€raw€materials€and€supplies,Ïwhich€would€result€in€a€standard€value€equal€to€100%€of€theÏtaxpayerððs€cost€of€acquisition.€€It€appears€some€taxpayers€have€neverÏdistinguished€CIP€from€operating€property€and€simply€reported€itÏwith€operating€property,€while€others€have€not€reported€it.€€SomeÏtaxpayers,€according€to€Tennessee€Association€of€Business,€mayÏhave€been€misled€by€the€State€Board€rule€which€defines€ð ðoriginalÏcostðð€for€purposes€of€personalty€assessment€to€mean€grossÏcapitalized€cost€before€depreciation.€€CIP€costs€are€not€capitalized€forÏfederal€income€purposes.€€Several€jurisdictions€back€assessedÏnonreporting€taxpayers€for€CIP€in€reliance€on€the€staffÏinterpretations.€€œ(Emphasis›€œadded.)›ÌÌÌÌÓÓThe€letter€concludes€by€setting€forth€the€ð ðstaffðð€interpretation€of€ðð€67„5„903(g)€to€mean€that€theÏ15%€valuation€provisions€were€not€to€become€operative€until€tax€year€beginning€January€1,€1994Ïand€for€years€prior€CIP€was€reportable€at€100%€of€cost,€including€tax€year€1993,€ð ðalthough€omittedÍor€under€assessed€CIP€[could]€not€be€back€assessed€for€those€years€.€.€.€.ðð€œ›ÌÌà àAs€heretofore€set€forth,€Appellees€admit€that€prior€to€May€17,€1993,€there€were€noÏstatutes,€regulations€or€administrative€rules€specifically€defining€or€addressing€CIP€property.€ÏThey,€however,€deny€there€were€no€ð ðdirectivesðð€regarding€the€matter€prior€to€this€time.€€They€relyÏspecifically€on€T.C.A.€ðð€67„5„901€which€concerns€the€ð ðclassificationðð€of€all€tangible€personalÏproperty€for€purposes€of€taxation€to€include€ð ðtangible€personal€property€which€is€not€in€use.ðð€€TheÏstatute€provides€that€such€property€is€to€be€classified€according€to€its€immediate€and€most€suitableÏeconomic€use€taking€into€account€certain€identified€factors.€€They€further€rely€upon€ðð€67„5„903(b)Ïwhich€provides€that€business€taxpayers€are€to€report€for€assessment€tangible€personal€propertyÏð ðused,€or€held€for€use,€in€the€taxpayersðð€business€or€profession.ðð€€Appellees€maintain€that€theÏforegoing€statutes€along€with€Art.€2,€ðð€28€of€the€state€constitution,€providing€that€ð ðall€property,Ïreal,€personal€or€mixed€shall€be€subject€to€taxation€.€.€.€.ðð,€€lend€clear€indication€that€CIP€wasÏsubject€to€taxation€œin€1993.›€€Appellees€further€assert€that€the€instructions€issued€to€taxpayers€for€taxÏyear€1993€did€not€change€existing€law€but€were€merely€utilized€to€clarify€the€status€of€œthe›€œlaw€as€itÏthen€existed.›€€They€state€that€the€schedule€on€which€taxpayers€were€to€report€their€tangible€personalÏproperty€did€not€identify€a€specific€category€in€which€€to€list€CIP€property.€€Therefore,€theÏinstructions€to€taxpayers€merely€identified€the€category€in€which€CIP€property€was€to€be€included.ÌÌà àIn€òòò òSherwood€Co.€v.€œClaryóóó ó,›€734€S.W.2d€318€(Tenn.€1987),€our€supreme€courtÏconfronted€the€issue€of€the€constitutionality€of€T.C.A.€ðð€67„5„901(3)(A)€with€respect€to€theÏassessment€of€non„business€tangible€personal€property.€€Therein,€œthe›€court€addressed€the€fact€thatÏArt.€œ2,›€ðð€28€€was€ð ðextensively€revised€by€an€amendment€adopted€in€1972.ðð€€òòò òSherwood€Co.óóó ó,€734ÏS.W.2d€at€320.€€The€court€stated:€ÌÌÓÓà8 à[T]he€Tennessee€Constitution€prior€to€the€amendment€prohibitedÍclassification€for€tax€purposes€of€property€according€to€its€use.€€ItÏrequired€all€property€to€be€taxed,€except€for€certain€exceptions€orÏexemptions€which€the€Legislature€might€authorize,€and€mandatedÏthat€all€property€should€be€taxed€according€to€its€value€so€that€taxesÏwould€be€equal€and€uniform€throughout€the€state€.€.€.€.ÌÌà8 àà àAll€of€this€was€changed€by€the€1972€amendment,€whichÏmade€all€property€in€the€state€subject€to€the€taxing€power€of€theÏLegislature€but€authorized€classifications€of€real€property€and€ofÏtangible€and€intangible€personal€property.€€With€œrespect›€to€realÏproperty€and€tangible€personal€property€the€amendment€provided€forÏfixed€ratios€of€assessment€to€value€in€each€classification€and€requiredÏthat€every€taxing€authority€apply€the€same€tax€rate€to€all€propertyÏwithin€its€jurisdiction.ÌÌÌÌÓÓòòò òIdóóó ó.ÌÌà àUpon€concluding€that€the€statute€did€not€violate€€the€equal€protection€clause€of€theÏFourteenth€Amendment,€the€court€held:ÌÌÓÓà8 àà àThe€general€assembly€concluded€that€no€appreciable€revenueÏcould€be€obtained€by€an€attempt€to€tax€household€goods€and€chattelsÏor€other€nonbusiness€tangible€personal€property.ÌÌà8 àà àIn€our€opinion€the€general€assembly€was€not€constitutionallyÏrequired€to€attempt€to€administer€and€maintain€an€impractical€systemÏof€taxation,€and€it€was€given€very€broad€discretion€with€respect€toÏdetermining€the€value€and€definition€of€property€in€each€of€theÏauthorized€classifications€or€subclassifications.ÌÌà8 àà àAs€previously€stated,€the€earlier€constitutional€mandate€thatÏall€property€be€taxed€was€repealed€by€this€amendment.€€Instead€allÏproperty€was€made€subject€to€the€taxing€power,€but€the€amendmentÏdid€not€compel€or€mandate€that€the€general€assembly€exhaust€thatÏpower.€€It€gave€general€directions€concerning€classifications€andÏassessment€ratios,€and€if€the€general€assembly€exercised€its€taxingÏpower€through€the€use€of€these€classifications,€the€ratios€ofÏassessment€to€value€were€required€to€be€used.ÌÌÌÌÓÓòòò òIdóóó ó.€at€321„22.ÌÌà àIn€œthe€present›€case,€the€legislature€chose€for€the€first€time€to€specifically€addressÏCIP€property€by€the€enactment€of€ðð€67„5„903(g).€€As€the€legislature€has€chosen€to€specificallyÏaddress€this€particular€kind€of€property€by€the€enactment€of€subsection€(g),€we€cannot€conclude€thatÏthe€meaning€of€CIP€property€œequates€merely›€to€property€that€is€ð ðheld€for€use.ððœ× ƒA ××  ×›€€In€this€respect,€weÏnote€that€Board€rule€0600„5„.01€as€amended€defines€CIP€property€as€ð ðtangible€personal€propertyÏwhich€as€of€the€assessment€date€is€undergoing€construction,€assembly,€or€installation€prior€to€beingÏcommitted€to€use.ðð€€Certainly,€this€definition€is€more€limiting€in€nature€than€that€which€merelyÏdescribes€property€ð ðheld€for€use.ðð€ÌÌà àT.C.A.€ðð€67„5„1302(d)€provides€as€follows:ÌÌÓÓà8 àà àThe€commission€shall€recognize€specific€valuation€forÏconstruction„in„process€(ð ðCIPðð)€tangible€personal€property€in€aÏmanner€consistent€with€that€provided€for€locally€assessed€propertyÏunder€ðð€67„5„903(g)(1).ÌÌà8 àà àThe€state€board€of€equalization€is€directed€to€prepare€andÏadopt€rules€and€regulations€for€the€administration€and€taxation€ofÏCIP€pursuant€to€this€section€and€ðð€67„5„903,€and€communicate€suchÏrules€and€regulations€to€taxpayers€to€ensure€accurate€and€timelyÏcompliance€by€taxpayers.ÌÌÓÓœThe›€record€makes€clear,€and€there€is€really€no€dispute,€that€the€Board€first€adopted€rules€specificallyÏdefining€CIP€property,€as€well€as€setting€forth€a€standard€for€valuation,€by€amendment€to€its€formerÏrules€which€became€effective€October€31,€œ1994.€We€conclude€that€although€CIP€was€certainlyÏsubject€to€the€taxing€power€of€the€legislature€prior€to€and€including€tax€year€1993,€it€was€not€theÏlegislatureððs€intent€that€it€be€so€taxed€until€its€enactment€of€subsection€(g).›ÌÌà àWe€note€that€in€answering€the€Boardððs€question€regarding€the€assessment€status€ofÍCIP€for€tax€year€1993€in€light€of€the€legislatureððs€enactment€of€Public€Chapter€323,€the€attorneyÏgeneral,€upon€interpreting€the€statute,€agreed€that€for€tax€year€1993€CIP€should€be€assessed€atÏ100%€of€cost.€€The€attorney€general€reasons€that€since€CIP€is€not€expressly€made€exempt€fromÏtaxation€and€since€it€is€a€species€of€tangible€personal€property,€it€must€be€taxable.€€The€attorneyÏgeneralððs€opinion€further€states:€ð ð[t]he€report€of€the€tax€study€committee€makes€clear€the€legislativeÏintent.€€The€legislature€was€well€aware€that€the€Act€would€allow€no€back€assessments€while€alsoÏlimiting€refunds€to€pending€claims.€€The€legislature€was€likewise€well€aware€that€before€theÏeffective€date€of€the€Act,€CIP€was€reportable€at€100%€of€œcost.ðð›€We€emphasize€here€that€theÏlegislatureððs€awareness€of€the€Boardððs€assessment€of€certain€tangible€personal€property€does€notÏnecessarily€indicate€either€legislative€approval€or€proper€authorization.€ÌÌà àThe€statute€in€question€does€not€address€assessments€of€CIP€property€prior€toÏJanuary€1,€1994,€but€only€back€assessments.€€As€it€expressly€voids€all€back€assessments€prior€toÏJanuary€1,€1994,€œwe€agree€with€Kelloggððs€position›€that€the€Boardððs€assessment€of€Kelloggððs€CIPÏproperty€is€likewise€void.€We€hold€that€Appellees€were€without€proper€authority€to€assess€suchÏproperty€until€January€1,€1994,€in€accordance€with€the€statutory€mandate€of€ðð€67„5„903(g).€€PublicÏChapter€323€expressly€states,€in€part,€ð ð[f]or€the€purpose€of€developing,€promulgating,€andÏcommunicating€rules€and€regulations,€this€act€shall€take€effect€upon€becoming€a€law,€the€publicÏwelfare€requiring€it.€€For€all€other€purposes,€including€assessments,€it€shall€take€effect€at€theÏbeginning€of€the€assessment€year€beginning€after€this€act€becomes€a€law,€the€public€welfareÏrequiring€it.ððÌÌà àWe€do€not€believe€our€decision€runs€counter€to€any€of€the€statutory€provisionsÏregarding€the€taxation€of€property.€€We€are€aware€that€under€T.C.A.€Ô€9Ôðð€Ô€5Ô67„5„101,€ð ð[a]ll€property,Ïreal€and€personal,€shall€be€assessed€for€taxation€.€.€.€except€such€as€is€declared€exempt€.€.€.,€orÏunless€otherwise€provided.ðð€€However,€the€real€issue€here€clearly€concerns€the€timing€at€whichÍproperty€identified€as€CIP€is€to€be€assessed€and€not€whether€it€is€to€be€taxed.€€For€the€reasonsÏherein€expressed,€we€hold€that€such€property€could€not€properly€be€assessed€earlier€than€the€time€atÏwhich€it€was€completed€and€placed€in€service€until€the€legislatureððs€enactment€of€Ô€9Ôðð€Ô€5Ô67„5„903(g)Ïwhich€specifically€provides€for€a€different€œtime€(by€acknowledging€for€the€first€time€a€separate€andÏdistinct€category€of€personal€property€identified€as€CIP).›ÌÌà à€The€judgment€of€the€trial€court€is€hereby€reversed€and€this€cause€remanded€theretoÏfor€further€necessary€proceedings.€€Costs€are€assessed€against€the€appellees,€for€which€executionÏmay€issue€if€œnecessary.ÌÌÓÓà àà àà àà àà àà àà àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ïóóà àà àà àà àà àà àà àFARMER,€J.ÌÌÌÌCONCUR:ÌÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌCRAWFORD,€P.J.,€W.S.ÌÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌHIGHERS,€J.›ÌÌ