Ruling on Permanently Moored Maming Vessel

In an unpublished decision, the U.S. Court of Appeals for the Fifth Circuit ruled that a gaming vessel is tangible personal property for purposes of Mississippi tax law. In the instant case, a shipyard converted a barge into a gaming vessel. After the work was completed and the shipyard was paid, the shipyard filed for bankruptcy under Chapter 11 of the Bankruptcy Code. The Mississippi State Tax Commission asserted that taxes should be paid on monies received for work on the gaming vessel. Under Mississippi law, taxes are due on a percentage of monies earned with certain exceptions. One of the exceptions relates to constructing, repairing, or adding to personal property. The district court held that, since the gaming vessel was permanently moored, it became an extension of the land and, thus, the work was taxable. The appellate court reversed, ruling that the gaming vessel did not lose its identity as tangible personal property when it was permanently moored. In the Matter of Superior Boat Works, Inc., No. 04-60296 (5th Cir., February 16, 2005) (HK Law)