In 2005, DirecTV purchased a facility in New Hampton to use an uplink facility, and for monitoring and operating the satellites and for the storage of spare parts and equipment. DirecTV performed a variety of improvements, including the adding two types of equipment to the facility: antennas and batteries.
The antennas, which are used either to transmit television content or to monitor and operate the satellites, are installed in concrete pads containing the wiring that runs to the facility. The antennas take about a week to install and about five days to uninstall, and could be used in another DirectTV facility.
The batteries, which are about the size of a car battery, are part of part of an emergency backup system if the power goes out. They are stored on steel racks, are easily removable, and could be used in another DirecTV facility.
In 2007, DirecTV filed for an abatement, which was denied. On appeal, the superior court ruled that because the antennas and batteries were fixtures, they were taxable.
Taxable real estate includes fixtures, which are “items of personalty that have lost their character as personalty and have become part of the realty.” The following factors are used to analyze whether an item is a fixture: the item’s nature and use; the intent of the party making the annexation; the degree and extent to which the item is specially adapted to the realty; the degree and extent of the item’s annexation to the realty; and the relationship between the realty’s owner and the person claiming the item.
The New Hampshire Supreme Court determined that the trial court improperly focused on the nature of DirecTV’s business, determining that the antennas and batteries were fixtures because they were essential to the business operation. Instead, the analysis should have focused on the equipment’s relationship with the real estate.
Although the antennas were inserted into cement pads in the ground, the Court determined that DirecTV’s antennas were “readily removable and transportable without affecting the utility of the underlying land, the buildings, or the equipment itself.” The antennas can be removed with ease and used elsewhere, and the property from which they were removed would remain usable.
Similarly, the Court determined that the batteries were not fixtures because they were not affixed to the building and could be easily removed from the steels racks they were stored on. Like the antennas, the batteries could be removed without impairing the building’s function.
As a result, the Court held that the antennas and batteries were personal property as opposed to fixtures, and, therefore, were no taxable real estate.