Vandenberg v. Butler County Bd. of Equal.

criminal act of making false statements under oath. Even
in rough-and-tumble political discourse, a charge of specific
illegal conduct by a public individual, if false and made with
actual malice, is not protected by the First Amendment and is
defamatory. Whether these accusations are false and made with
malice can only be determined by examining evidence at trial.
Neither the trial court nor this court has seen the affidavit. I
would conclude that the district court erred when it determined
prematurely that the affidavit-related allegations in publications
Nos. 3 and 4 could not succeed at trial and therefore dismissed
these claims at the pretrial stage. To this limited extent, I would
reverse the district court’s order, permit the case to proceed
solely as to the defamation claims regarding publications Nos.
3 and 4, and await the evidence.
Betty VandenBerg , appellee , V. Butler C ounty
Board of equalization, appellant.
796 N.W.2d 580
Filed April 28, 2011. 	No. S-10-783.
1. Taxation: Judgments: Appeal and Error. Appellate courts review decisions
rendered by the Tax Equalization and Review Commission for errors appearing
on the record.
2. Judgments: Appeal and Error. When reviewing a judgment for errors appearing
on the record, an appellate court’s inquiry is whether the decision conforms to
the law, is supported by competent evidence, and is neither arbitrary, capricious,
nor unreasonable.
3. Taxation: Appeal and Error. Questions of law arising during appellate review
of Tax Equalization and Review Commission decisions are reviewed de novo on
the record.
Appeal from the Tax Equalization and Review Commission.
Reversed and remanded.
Julie L. Reiter, Butler County Attorney, for appellant.
No appearance for appellee.
H eaViCan, C.J., C onnolly, gerrard, StepHan, MCC orMaCk ,
and M iller-lerMan, JJ.
vANdENBERg V. BuTLER CouNTy Bd. oF EQuAL. 	437
Cite as 281 Neb. 437
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:45 AM CST

MCC orMaCk , J.
NATuRE oF CASE
The Butler County Board of Equalization (Butler County)
appeals an order of the Tax Equalization and Review Commission
(TERC). TERC determined that the irrigation pump at issue in
this case is a fixture and should be taxed as real property. The
issue on appeal is whether the irrigation pump should be clas-
sified as a fixture and taxed as real property or a trade fixture
and taxed as personal property, as defined in Neb. Rev. Stat.
§ 77-105 (Reissue 2009). For the following reasons, we reverse
TERC’s determination.
BACkgRouNd
Betty vandenberg owns a parcel of land which she leases to
individuals who farm the land. The parcel contains an irriga-
tion well, a pump, a motor for the pump, a gear box attaching
the motor to the pump, a pipe to carry water from the pump to
a center pivot, and the center pivot, which is used to irrigate
the land. The only property at issue in this appeal is the irriga-
tion pump. The pump hangs inside a cased well and is secured
to the land with a cement cap and bolts. The county asses-
sor determined the pump was taxable as personal property.
vandenberg appealed this determination to TERC.
After a hearing, TERC reversed the assessor’s determination
and found that the pump qualified as a fixture. TERC relied, in
part, on Cook v. Beermann.1 In Cook, this court determined that
an irrigation pump in a well was a fixture included in the sale
of real property. The pump in the present case, TERC reasoned,
is like the irrigation pump in Cook and qualifies as a fixture.
TERC noted that not all fixtures are real property for purposes
of taxation.2 To determine whether the pump should be taxed
as real or personal property, TERC analyzed the applicability
of § 77-105. While § 77-103 provides that “fixtures” shall be
taxed as real property, “trade fixtures” are taxable as personal
property under § 77-105. Section 77-105 states in part: “The
term tangible personal property also includes trade fixtures,
1 Cook v. Beermann, 201 Neb. 675, 271 N.W.2d 459 (1978).
2 See Neb. Rev. Stat. § 77-103 (Reissue 2009).
438 	281 NEBRASkA REpoRTS

which means machinery and equipment, regardless of the
degree of attachment to real property, used directly in com-
mercial, manufacturing, or processing activities conducted on
real property, regardless of whether the real property is owned
or leased.” TERC noted that the pump is machinery, but is not
“used in a commercial, manufacturing or processing activity.”
Accordingly, TERC determined that the pump was a fixture
and should be taxed as real property.
Butler County appeals. No brief was filed on behalf of
vandenberg.
ASSIgNmENTS oF ERRoR
Butler County assigns that TERC erred in finding that an
irrigation pump is (1) a fixture and therefore real property for
the purposes of taxation and (2) not “machinery and equip-
ment” used directly in “commercial, manufacturing, or proc-
essing activities,” as set forth in § 77-105.
STANdARd oF REvIEW
[1-3] Appellate courts review decisions rendered by TERC
for errors appearing on the record.3 When reviewing a judgment
for errors appearing on the record, an appellate court’s inquiry
is whether the decision conforms to the law, is supported by
competent evidence, and is neither arbitrary, capricious, nor
unreasonable.4 Questions of law arising during appellate review
of TERC decisions are reviewed de novo on the record.5
ANALySIS
aMendMent to § 77-105
Section 77-105 states in full:
The term tangible personal property includes all per-
sonal property possessing a physical existence, excluding
money. The term tangible personal property also includes
trade fixtures, which means machinery and equipment,
3 Vitalix, Inc. v. Box Butte Cty. Bd. of Equal., 280 Neb. 186, 786 N.W.2d 326
(2010).
4 Id.
5 Id.
vANdENBERg V. BuTLER CouNTy Bd. oF EQuAL. 	439
Cite as 281 Neb. 437

regardless of the degree of attachment to real property,
used directly in commercial, manufacturing, or process-
ing activities conducted on real property, regardless of
whether the real property is owned or leased. The term
intangible personal property includes all other personal
property, including money.
(Emphasis supplied.) The emphasized portion above was
added by the passage of 2007 Neb. Laws, L.B. 334. The
Committee Statement on L.B. 334 gives the purpose of the
amendment:
[T]o specifically exclude trade fixtures from the defi-
nition of real property (section 77-103), and include
trade fixtures within the definition of personal property
(section 77-105). Trade fixtures would be defined as
machinery and equipment used directly in commercial,
manufacturing, or processing activities. The degree of
attachment to the real property would be irrelevant under
[the amendment].6
The Nebraska Administrative Code also defines trade fixtures:
Trade fixture shall mean an item of machinery or equip-
ment, used in commercial, manufacturing, or processing
activities. The degree of attachment shall have no influ-
ence towards classifying the machinery or equipment as
real property. Trade fixtures are items of personal prop-
erty which are placed upon or affixed to real property for
the sole purpose of carrying on a trade or business.7
Because vandenberg leases the land to farmers who utilize the
land to obtain monetary profits, Butler County argues that the
pump is a piece of machinery used in commercial activities. At
the hearing before TERC, vandenberg argued that according
to the tax code, she obtains rental income from the property,
not income from a trade or business. Based upon our de novo
review of the record, we determine that the pump in this case
qualifies as a trade fixture.
6 Committee Statement, L.B. 334, Revenue Committee, 100th Leg., 1st
Sess. (Feb. 1, 2007).
7 350 Neb. Admin. Code, ch. 10, § 001.29 (2009).
440 	281 NEBRASkA REpoRTS

The language of § 77-105 is clear: The term “tangible per-
sonal property” includes trade fixtures, which means machin-
ery and equipment, regardless of the degree of attachment to
real property, used directly in commercial, manufacturing, or
processing activities conducted on real property, regardless of
whether the real property is owned or leased. TERC correctly
determined that the pump qualifies as machinery. The statute
does not specify who must use the machinery so that it shall
be classified as a trade fixture. The language only specifies
how the machinery must be used to be classified as personal
property—such use being commercial, manufacturing, or proc-
essing activities.
It is undisputed that the parcel of land in this case is used
for farming. The Nebraska Administrative Code defines agri-
cultural land as “a parcel of land primarily used for agricultural
. . . purposes.”8 “Agricultural purposes” means “used for the
commercial production of any plant or animal product in a
raw or unprocessed state that is derived from the science and
art of agriculture.”9 Commercial production is also defined
as “agricultural and horticultural products produced for the
primary purpose of obtaining a monetary profit.”10 The pump
is used to move water from a well to a pivot system in order
to irrigate the crops produced on the parcel land. These crops
are produced for the primary purpose of obtaining a monetary
profit. Such use amounts to commercial production of agricul-
tural products, which qualifies as “commercial activity” for the
purposes of § 77-105.
Whether vandenberg 	personally 	engages 	in 	commercial
activities on the land is irrelevant. The statutory language
clearly focuses on the activity being conducted on the land,
not who is conducting that activity. The pump is used directly
in commercial activity conducted on the property. The pump
meets the requirements provided in § 77-105, and therefore,
8 350 Neb. Admin. Code, ch. 14, § 002.05 (2009).
9 350 Neb. Admin. Code, ch. 10, § 001.05F (2009).
10 350 Neb. Admin. Code, ch. 14, § 002.58 (2009).
vANdENBERg V. BuTLER CouNTy Bd. oF EQuAL. 	441
Cite as 281 Neb. 437

it should be classified as a trade fixture and taxed as per-
sonal property.
appliCaBility of tHree -part teSt
Butler County argues that the three-part test for determin-
ing whether a fixture is real or personal property, discussed in
Cook11 and later approved in Northern Natural Gas Co. v. State
Bd. of Equal.,12 was superseded by the amendment to § 77-105.
The test was articulated in Northern Natural Gas Co.:
To determine whether an item constitutes a fixture, this
court looks at three factors: (1) actual annexation to the
realty, or something appurtenant thereto, (2) appropriation
to the use or purpose of that part of the realty with which
it is connected, and (3) the intention of the party making
the annexation to make the article a permanent accession
to the freehold.13
The three-part test was appropriately applied in Cook and
remains appropriate for determinations of whether fixtures
should be encompassed 	by 	land 	sale 	contracts. However,
§ 77-105 clearly controls the issue of classifications of fixtures
for taxation purposes. Accordingly, the three-part test does not
apply to taxation determinations of this nature. To the extent
that Northern Natural Gas Co.14 holds to the contrary, it is
expressly overruled.
CoNCLuSIoN
For the foregoing reasons, we reverse TERC’s determination
and remand the cause for further proceedings consistent with
this opinion.
reVerSed and reManded.
WrigHt, J., not participating.
11 Cook v. Beermann, supra note 1.
12 Northern Natural Gas Co. v. State Bd. of Equal., 232 Neb. 806, 443
N.W.2d 249 (1989), disapproved on other grounds, MAPCO Ammonia
Pipeline v. State Bd. of Equal., 238 Neb. 565, 471 N.W.2d 734 (1991).
13 Id. at 817, 443 N.W.2d at 257.
14 Northern Natural Gas Co. v. State Bd. of Equal., supra note 12.
442 	281 NEBRASkA REpoRTS