Can a set of functionally linked things be subject to real property tax?

What was the case about?

SAC's ruling

However, the SAC did not share the arguments raised by tax authorities or the PAC in Łódź in this dispute. It held that it was inadmissible to apply the concept of technical and utility link among constructions for tax law purposes in order to classify a complex of constructions as one structure which must be taxed as a whole at the tax rate applicable to structures.

The SAC believes that, for the purpose of tax law, complex structures should be considered in reference to the civil law understanding of a thing as a physically separate tangible object. According to the SAC's ruling, all tangible constructions which are sufficiently specific and separate must be identified for real property tax purposes so as to determine the taxable base for each of those constructions. Once the constructions are identified, it must be established whether the individual constructions are buildings or structures and then the appropriate real property tax rate must be applied to each of them.

Moreover, the SAC pointed out that the functional link established among a number of constructions to achieve a business purpose does not trigger the existence of a single item subject to tax under the Local Taxes and Fees Act. There is simply no justification for this view in the Local Taxes and Fees Act. The statute does not specify the functional link among constructions as the criterion identifying the item subject to real property tax.

Ultimately, the SAC explained that for real property tax purposes it was first necessary to identify process line components that are separate tangible objects and then to assess whether each of those components can be considered a construction. The next step is to establish whether a given construction is a structure or a building and then to apply an appropriate real property tax rate.