Pipeline Assessment and Taxation

April 19, 2024

To: Assessors
Municipal Clerks and Treasurers
County Clerks, Treasurers, Real Property Listers, and Register of Deeds

The Wisconsin Department of Revenue (DOR), State and Local Finance Division is providing information on the local assessment of pipelines. Assessors should complete the following steps to determine assessment jurisdiction, taxability, and listing and valuation.

  1. Determine Assessment Jurisdiction – State or Local
    • Refer to your 2023 property assessment data to identify locally assessed pipelines
    • If you're unsure if the pipeline is currently state assessed – contact DOR's Manufacturing & Utility Bureau district office at utility@wisconsin.gov
    • If the pipeline company:
      • Is state-assessed – no action is required by local assessors
      • Is not under state assessment – continue to step 2
  2. Determine Taxability – Real or Personal Property

    Apply state law and case law to determine whether a pipeline is taxable real property or exempt personal property.

    • State law
      • Real property is defined in sec. 70.03, Wis. Stats.
        • Sec. 70.17(3), Wis. Stats., requires real property assessment for manufactured and mobile homes, not otherwise exempt from taxation under sec. 66.0435 (3); buildings, improvements, and fixtures on leased lands; buildings, improvements, and fixtures on exempt lands; buildings, improvements, and fixtures on forest croplands; and buildings, improvements, and fixtures on managed forest lands
      • Personal property is defined in sec. 70.04, Wis. Stats.
    • Case law
      • Provides a three-factor test to determine real property – see pages 18-2 to 18-7 of the 2024 Wisconsin Property Assessment Manual (WPAM)
      • Actual physical annexation to the real estate – is the pipeline:
        • A permanent addition to or betterment of real property? A permanent attachment or annexation to land? (ex: sidewalks, tunnels, watermain access, drains, sewers, and septic systems)
        • Attached to a foundation of a structure, and/or built into a structure?
      • Adaptation to the use or purpose to which the realty is devoted:
        • Is the pipeline and property in question adapted to the same purpose of the real property?
      • Intention on the part of the person creating the annexation to make the item a permanent part of the realty:
        • Would the average person under similar circumstances intend to make the pipeline permanent? The "intent" is judged by how the pipeline is adapted to the principal use of the land and buildings.
        • Is the objective and presumed intent, of an ordinary person, that the pipeline and integrated equipment are permanent parts of the real property?
    • Determination
      • If personal property, the pipeline is exempt
      • If real property, continue to step 3. Note: If the locally assessed pipeline property is determined to be real property, it must be included on the 2024 real estate assessment roll.
  3. List and Value
    • Contact the property owners – explain the assessment and taxation options
    • Contact the County Real Property Lister (RPL) – to determine which listing option below is most appropriate
    • Listing Option A – list and value the total pipeline property within the municipality
      • Coordinate with the County RPL and pipeline property owner to complete the Buildings, Fixtures and Improvements (BFI) recording document and use an abbreviated legal description for recording with the Register of Deeds
      • Ensure your municipal attorney approves documentation, if needed
      • This option is only recommended when the taxing jurisdictions are the same throughout the entire municipality, meaning there is one technical college, school district and special district
    • Listing Option B – list and value the pipeline separately on a new parcel
      • Review existing recorded information:
        • Example: recorded leases and easements may already exist with a legal description and allow for creation of a tax parcel
        • Contact the County RPL who can determine if an existing description on a recorded document is adequate for parcel creation
        • If the RPL confirms an adequate existing legal description, use the Buildings, Fixtures and Improvements (BFI) recording document to cite and attach the existing recorded description for recording with the Register of Deeds
      • State law provide a variety of ways to create a separate parcel if an existing legal description is not available – certain processes are a land division (certified survey map) and others are not (metes and bounds description) – see pages 18-10 to 18-12 of the WPAM
        • Sec. 706.05(2m(b)3, Wis. Stats., allows abbreviated legal description for descriptions of property under sec. 70.17 (3),Wis. Stats.
        • A recommended abbreviated description contains town, range, section, quarter section, quarter-quarter, or government lot number and reference to the land parcel number/document where the improvement is located
      • Separate tax bills for the year when separate parcels are created is possible
    • Listing Option C – list and value the pipeline with the land parcel where each portion of the pipeline is located
      • Update the existing parcel's real property listing and valuation to include the land and all buildings, improvements, fixtures and rights and privileges appertaining thereto. Including the pipeline located on the parcel.
      • Note: Based on feedback, this is the least preferred option as it may be burdensome for property owners to attain reimbursement from the applicable pipeline company
    • Listing Option D – compel parcel creation. If contact with the pipeline owner is unsuccessful and the landowner seeks a separate assessment and tax bill without the pipeline, the municipality may consider compelling parcel creation through the assessor's plat law, sec. 70.27, Wis. Stats.
      • Assessor plat process is a municipal process completed by authority given to the municipality by state law
      • The municipality initially pays for the plat, however, the law allows the municipality to subsequently collect that cost from each property subject to the plat as a special assessment under 66.0703
      • See the Assessor Plats manual for process information
    • Value
      • Sec. 70.32, Wis. Stats., provides the valuation standard for real property
      • See the WPAM for additional information: Chapter 9 Real Property Valuation and Chapter 13 Commercial Property Valuation

Resources

Questions?

  • Property assessment – bapdor@wisconsin.gov
  • State-assessed pipelines – utility@wisconsin.gov
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