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DirecTV, Inc. v. Town of New Hampton

Supreme Court of New Hampshire

May 26, 2017

DirecTV, INC.

          Argued: February 16, 2017

          Sulloway & Hollis, P.L.L.C., of Concord (Margaret H. Nelson and Jay Surdukowski on the brief, and Ms. Nelson orally), for the plaintiff.

          Mitchell Municipal Group, P.A., of Laconia (Judith E. Whitelaw and Walter L. Mitchell on the brief, and Ms. Whitelaw orally), for the defendant.

          Law Office of Joshua L. Gordon, of Concord (Joshua L. Gordon on the brief), for New Hampshire Association of Broadcasters, as amicus curiae.

          Devine, Millimet & Branch PA, of Manchester (Daniel E. Will on the brief), for Satellite Broadcasting & Communications Association, as amicus curiae.

          BASSETT, J.

         The plaintiff, DirecTV, Inc. (DirecTV), appeals the decision of the Superior Court (O'Neill, J.) denying a petition for property tax abatement for the tax years 2007, 2008, and 2009. The property at issue is located in New Hampton and is used by DirecTV as a satellite uplink facility. On appeal, DirecTV argues that the trial court erred when it (1) ruled that satellite antennas and batteries used to provide backup power constitute fixtures, and (2) determined the value of the property. Because we conclude that the antennas and batteries are not fixtures - and, therefore, are not taxable as real estate - we reverse the decision of the trial court on that issue, vacate its decision on the valuation of the property, and remand for further proceedings consistent with this opinion.

         The trial court found, or the record supports, the following facts. DirecTV is a national provider of satellite television service. In 2005, it purchased the property at issue: an approximately 21 acre parcel, on which is built a 46, 000 square-foot building. Prior to the purchase, the building was used as a woolen mill facility, and contained a small office, an area for light manufacturing, a loading dock, and warehouse space. DirecTV intended to use the property as a satellite uplink facility, from which it would transmit television content to its satellites. The satellites, in turn, would transmit that content to customers' receivers.

         In selecting the property as the site of its new facility, DirecTV was primarily motivated by the property's geographic location. In order to transmit content to the satellites, which revolve in geosynchronous orbit around the earth, the uplink facility was required to be stationed somewhere within a designated geographical area in the Northeast. The designated area included the New Hampton property, parts of other New England states, as well as upstate New York. However, neither the land nor the building in New Hampton possessed any additional characteristics that were necessary for the operation of the uplink facility. As Leon Stanger, an engineer and consultant for DirecTV, testified at the 2011 hearing, it is "relatively easy to adapt" a building to an uplink facility.

         During the year following its purchase of the property, DirecTV made various improvements to the land and to the building. In addition to using the property as an uplink facility, DirecTV uses the property for monitoring and operating the satellites, and for the storage of spare parts and equipment. Overall, as improved, about one-third of the building is used for DirecTV's satellite operations, while two-thirds is used as a warehouse.

         Relevant for purposes of this appeal are two types of specialized equipment that DirecTV uses at the property: satellite antennas and batteries. Because the parties' dispute turns on the nature of these items, we discuss their characteristics and the circumstances surrounding their installation in more detail.

         There are six antennas at issue in this case, three of which have 13-meter dishes, and three of which have 9-meter dishes. The 13-meter antennas are used to transmit television content to the satellites, while the 9-meter antennas are used in monitoring and operating the satellites. Each antenna consists of, among other components, a stanchion, a dish, internal tracking mechanisms and electronics, motors, conduit systems, and "de-icers."

         To install these antennas, DirecTV poured concrete pads. The pads are three to four feet deep. Conduits for electrical wiring were placed in the concrete pads and run underground from the antennas to the facility. Trucks then transported the antennas to the property, where they were removed by crane, assembled, and bolted onto the pads. It took approximately one week to assemble each antenna structure, and several additional weeks to configure and install the wiring running between the antenna and the facility.

         The process of disassembly is "straightforward": an antenna can be removed in approximately five days. Removal of the antennas would not affect the utility of the land or the building itself. DirecTV has ...

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