Put-in-Bay v. Mathys (Slip Opinion)

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Put-
in-Bay v. Mathys, Slip Opinion No. 2020-Ohio-4421.]

NOTICE
This slip opinion is subject to formal revision before it is published in an
advance sheet of the Ohio Official Reports. Readers are requested to
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
South Front Street, Columbus, Ohio 43215, of any typographical or other
formal errors in the opinion, in order that corrections may be made before
the opinion is published.

SLIP OPINION NO. 2020-OHIO-4421
THE VILLAGE OF PUT-IN-BAY, APPELLEE, v. MATHYS ET AL., APPELLANTS.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as Put-in-Bay v. Mathys, Slip Opinion No. 2020-Ohio-4421.]
Village ordinance imposing tax on vehicles for hire does not violate Ohio
Constitution—Judgment affirmed.
(No. 2019-0324—Submitted March 10, 2020—Decided September 16, 2020)
APPEAL from the Court of Appeals for Ottawa County, Nos. OT-18-006 and OT-
18-007, 2019-Ohio-162.
_________________
STEWART, J.
{¶ 1} In this appeal we are asked to decide whether Section 858.01 of the
Codified Ordinances of the Village of Put-In-Bay imposes an unconstitutional tax
on motor vehicles. We hold that the ordinance does not impose an unconstitutional
tax, and thus, we affirm the judgment of the Sixth District Court of Appeals that
 SUPREME COURT OF OHIO

reversed the trial court’s dismissal of criminal charges against defendants-
appellants, Mark Mathys and Islander Inn, L.L.P.,1 alleging failure to pay the tax.
Facts and Procedural History
{¶ 2} The village of Put-in-Bay is a small municipality and vacation
destination located on South Bass Island in Lake Erie. Section 858.01 of the
Codified Ordinances of the Village of Put-In-Bay requires that owners of vehicles
that are made available for hire and use within the municipality pay a “license fee”
on those vehicles. Section 858.01 states:

(a) Owners of vehicles used for the transportation of persons
or property, for hire and for use within the Village, shall pay by June
15 of each year, an annual, nontransferable vehicle license fee for
each vehicle as follows:
(1) Buses and/or trolleys and/or self- $300.00
powered trams
(2) Tour train cars and/or towed tram $225.00
car/unit
(3) Taxicabs:
A. Motor-driven $225.00
B. Horse-driven $225.00
C. Pedicab bicycles $50.00

1. The original complaints filed in the Put-in-Bay Mayor’s Court named the defendants as “SB-
Delaware Rentals, Inc. (c/o Mark Mathys)” and “Islander Inn, L.L.P., d.b.a. Islander Inn (c/o
Timothy L. Niese Sr.).” However, the attorney for the defendants requested that the cases be
transferred to the common pleas court, and upon transfer, defendants’ counsel filed a notice of
appearance and identified Mark Mathys as his client in the SB-Delaware Rentals case and Islander
Inn as his client in the other case. Thereafter, defense counsel, the common pleas court, and the
Sixth District Court of Appeals referred to the defendant in the SB-Delaware Rentals case as Mark
Mathys.

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(4) Bicycles $15.00
(5) Motorized bicycle/mopeds $37.50

(6) Golf carts/under-speed vehicles/low- $50.00
speed vehicles
(7) Rental motor vehicles/vehicles $50.00
(b) All moneys and receipts which are derived from the
enforcement of this section shall be credited and paid into a separate
fund, which fund shall be known as the Public Service Street Repair
Fund. All moneys and receipts credited to such Fund shall be used
for the sole purpose of repairing streets, avenues, alleys and lanes
within the Village of Put-in-Bay.

{¶ 3} Subsection (c) of the ordinance requires that a “vehicle-fee paid”
document be exhibited on every vehicle that is made available for hire. A violation
of Section 858.01 is a fourth-degree misdemeanor, and “[a] separate offense shall
be deemed committed for each rental vehicle for which the vehicle license fee
provided for in Section 858.01 remains unpaid.” Put-in-Bay Codified Ordinances
858.99.
{¶ 4} Matthys and Islander Inn operate businesses that make motorized golf
carts available for rent within the village. In early 2015, the village filed separate
criminal complaints against Mathys and Islander Inn for failing to pay the annual
license fee2 on their golf carts by June 15 of the preceding year.

2. We note that municipalities are permitted to license and regulate vehicles for hire. See R.C.
715.66; see also R.C. 715.22(A) and (B). However, the Ottawa County Court of Common Pleas
has previously determined that the “license fee” referred to in Section 858.01 is not a fee imposed
pursuant to the village’s power to license and regulate vehicles for hire but is rather a tax imposed
for the purpose of generating revenue. See S.B. Carts, Inc. v. Put-In-Bay, 161 Ohio App.3d 691,
2005-Ohio-3065, 831 N.E.2d 1052, ¶ 5-7. The parties do not dispute that Section 858.01 imposes

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{¶ 5} Mathys and Islander Inn moved to dismiss the criminal complaints,
asserting that Section 858.01 violates the Ohio Constitution for two reasons. First,
citing this court’s decision in Firestone v. Cambridge, 113 Ohio St. 57, 148 N.E.
470 (1925), in which we held that “[n]o municipality in this state has power to levy
[an] excise tax [upon owners of motor vehicles residing in the municipality for the
privilege of operating the motor vehicles upon the streets, for the purpose of
creating a fund to be used for cleaning, repairing, and maintaining the streets of the
municipality] in addition to that levied by the state for similar purposes,” Mathys
and Islander Inn argued that Section 858.01 is an impermissible tax under Article
XVIII, Section 13 of the Ohio Constitution, because the General Assembly has
preempted the municipal tax by levying a similar state tax on the operation of motor
vehicles on public roads. See R.C. 4503.02 (imposing an annual state license tax
on the operation of motor vehicles on public roads and highways); see also R.C.
4504.02 (permitting counties to adopt legislation that imposes an additional $5 tax
on vehicle licenses); R.C. 4504.06 (permitting municipalities to adopt legislation
that imposes an additional $5 tax on vehicle licenses, provided the county has not
adopted such legislation under R.C. 4504.02). Second, Mathys and Islander Inn
argued that because there is not a state statute enabling expenditure of the money
derived from the municipal tax levied pursuant to Section 858.01, the ordinance
violates Article XII, Section 5a of the Ohio Constitution, which prohibits “moneys
derived from fees, excises, or license taxes related to registration, operation, or use
of vehicles on public roadways” from being expended on things other than
“statutory highway purposes.”
{¶ 6} In its opposition to the motions to dismiss, the village argued that the
doctrine of implied preemption, which we applied in Firestone, is no longer

a tax. Indeed, the parties continuously refer to Section 858.01 as a tax throughout their briefs.
Accordingly, for purposes of this appeal, we assume that Section 858.01 is a tax on vehicles for hire.

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applicable in this area of law in light of this court’s later decision in Cincinnati Bell
Tel. Co. v. Cincinnati, 81 Ohio St.3d 599, 693 N.E.2d 212 (1998). In Cincinnati
Bell, we made clear that the “taxing authority of a municipality may be preempted
or otherwise prohibited only by an express act of the General Assembly.” Id. at
syllabus. The village argued that because nothing in R.C. 4503.02, 4504.02,
4504.06, or any other statute expressly prohibits the type of tax imposed by Section
858.01—which, according to the village, is a business tax on vehicles for hire and
not a tax on the operation of motor vehicles on public roadways—Section 858.01
is not preempted by state statute. Regarding Mathys and Islander Inn’s claim that
Section 858.01 also violates Article XII, Section 5a of the Ohio Constitution, the
village directed the trial court’s attention to our decision in Garrett v. Cincinnati,
166 Ohio St. 68, 69, 139 N.E.2d 35 (1956), in which we stated that Article XII,
Section 5a is a “limitation only on the use of state-imposed fees, excise and license
taxes and is not applicable to fees imposed by municipal corporations.” The village
argued that because a municipal corporation imposes the Section 858.01 tax, the
limitations set forth in Article XII, Section 5a do not apply to it and therefore do
not render the ordinance unconstitutional.
{¶ 7} Following a hearing on the motions, the trial court entered an order
dismissing the criminal complaints on the basis that Section 858.01 is for a similar
purpose as the annual state license tax levied on the operation of motor vehicles
under R.C. 4503.02 and the local government tax permitted by R.C. 4504.02 and
4504.06. The trial court did not determine whether Section 858.01 is
unconstitutional under Article XII, Section 5a.
{¶ 8} On appeal, the Sixth District Court of Appeals reversed. In reaching
its decision that Section 858.01 was not preempted by state law and therefore did
not violate Article XVIII, Section 3 or 13 of the Ohio Constitution, the court agreed
with the village that Firestone, 113 Ohio St. 57, 148 N.E. 470, had been overruled
by Cincinnati Bell and that nothing in the General Assembly’s vehicle-taxing

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statutes expressly prohibits the type of tax imposed by the village ordinance. 2019-
Ohio-162, 131 N.E.3d 343, ¶ 13-15. Specifically, the court noted that although

R.C. 4504.06 seems similar [to Section 858.01], at first blush, by
permitting a municipal corporation to “levy an annual license tax
* * * upon the operation of motor vehicles on the public roads or
highways” at the rate of $5 per motor vehicle, this statute makes no
mention of a tax imposed on a business operating a vehicle-for-hire
company. By the plain language of Section 858.01, it applies to
businesses based on the size of their vehicle-for-hire fleets, and it is
not an annual license tax of the type contemplated in R.C. 4504.06.

(Ellipsis and emphasis sic.) Id. at ¶ 15.
{¶ 9} Having determined that Section 858.01 is not preempted by state law,
the Sixth District turned to whether the tax violates Article XII, Section 5a of the
Ohio Constitution. 2019-Ohio-162, 131 N.E.3d 343, at ¶ 16. The appellate court
agreed with the village that our holding in Garrett, 166 Ohio St. 68, 69, 139 N.E.2d
35, makes clear that Section 5a limits the use of only state-imposed fees and excise
and license taxes and noted that “because Section 858.01 is a tax imposed by a
municipality, Section 5a does not operate to limit it.” 2019-Ohio-162, 131 N.E.3d
343, at ¶ 17.
{¶ 10} Mathys and Islander Inn appealed, and we accepted the following
propositions of law:

First Proposition of Law: Because Ohio licenses vehicles for
use on all public roadways in exchange for payment of an annual
statutory tax on vehicles, no municipality in this state may levy an

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additional local tax for similar purposes—otherwise, localities could
negate or attach additional strings to statewide licenses.
Second Proposition of Law: Under Ohio Constitution Art.
XII, Section 5a, any moneys collected from taxes levied on motor
vehicles must be expended solely for a statutory purpose, therefore,
a statute—not an ordinance—must enable the expenditure, and
hence the exaction, of a vehicle tax.

(Emphasis sic.) See 155 Ohio St.3d 1455, 2019-Ohio-1759, 122 N.E.3d 216.
Analysis
{¶ 11} The two propositions of law before us assert that Section 858.01
violates the Ohio Constitution. We review constitutional challenges to state and
local legislation de novo, Cleveland v. State, 157 Ohio St.3d 330, 2019-Ohio-3820,
136 N.E.3d 466, ¶ 15 (plurality opinion), with the understanding that duly enacted
laws are afforded a strong presumption of constitutionality, Yajnik v. Akron Dept.
of Health, Hous. Div., 101 Ohio St.3d 106, 2004-Ohio-357, 802 N.E.2d 632, ¶ 16.
To overcome this presumption, the party challenging the law must prove the law
unconstitutional beyond a reasonable doubt. Id. In this case, we determine that
Mathys and Islander Inn failed to meet their burden of proof.
Preemption
{¶ 12} Article XVIII, Section 3 of the Ohio Constitution, also known as the
Home Rule Amendment, grants municipalities the authority to “exercise all powers
of local self-government.” Included within this broad grant of authority is the right
of local governments to levy taxes. State ex rel. Zielonka v. Carrel, 99 Ohio St.
220, 227, 124 N.E. 134 (1919). This right is not absolute, however. Article XVIII,
Section 13, and Article XIII, Section 6 of the Ohio Constitution enable the General
Assembly to pass laws that limit municipal taxing authority. See Gesler v.

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Worthington Income Tax Bd. of Appeals, 138 Ohio St.3d 76, 2013-Ohio-4986, 3
N.E.3d 1177, ¶ 19, 20.
{¶ 13} Multiple times over the past century, we have been asked to
determine whether various municipal taxes conflict with laws passed by the General
Assembly and are therefore invalid. In one of our earlier cases, Firestone, 113 Ohio
St. 57, 148 N.E. 470, which Mathys and Islander Inn urge us to apply here, we
stated that the General Assembly may either expressly or implicitly limit the power
of municipalities to levy taxes. Id. at 67.
{¶ 14} In Firestone, we addressed whether a municipality could, through
the enactment of a local ordinance, require automobile owners to pay a tax for the
right to use their motor vehicles on the streets of the municipality. Finding that the
General Assembly had already acted to levy an excise tax on the owners of motor
vehicles operating on public highways for the purpose of maintaining and repairing
those roads, we held that the municipality could not levy its own tax. Id. at 66-67.
In reaching this decision, we followed the syllabus in Cincinnati v. Am. Tel. & Tel.
Co., 112 Ohio St. 493, 147 N.E. 806 (1925), which states that the power to levy a
municipal tax does not extend to fields that have already been occupied by the state.
Firestone at 66. Our syllabus in Firestone states:

The assessment of an annual fee by a municipal ordinance,
upon owners of motor vehicles residing in the municipality, for the
privilege of operating such motor vehicles upon the streets thereof,
for the declared purpose of producing a fund to be used for the
cleaning, maintenance, and repair of the streets of the municipality,
to which use it is thereby appropriated, though denominated a
license fee, is an “excise tax.”
No municipality in this state has power to levy such excise
tax in addition to that levied by the state for similar purposes.

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{¶ 15} In the decades that followed our decision in Firestone, we cited the
case as an example of this court’s application of the implied-preemption doctrine.
See, e.g., E. Ohio Gas Co. v. Akron, 7 Ohio St.2d 73, 77, 218 N.E.2d 608 (1966).
But as the years passed, we also came to question the doctrine’s practicality. See
id. (observing that when applying the doctrine, the court’s language had sometimes
been “obscure, ambiguous, inconsistent and, on occasion, almost contradictory to
previous cases in stating the grounds upon which the court’s judgment was based”).
Ultimately, in Cincinnati Bell, 81 Ohio St.3d 599, 693 N.E.2d 212, we abandoned
use of the doctrine after reexamining the constitutional provisions at issue and
determining that municipal taxing authority under Article XVIII, Section 3 of the
Ohio Constitution is a power that exists coextensively with the General Assembly’s
power to limit municipal taxes under Article XVIII, Section 13, and Article XIII,
Section 6. Because the rights conferred in the constitutional provisions exist on
equal footing, we concluded that “[i]n the absence of an express statutory limitation
demonstrating the exercise, by the General Assembly, of its constitutional power,
acts of municipal taxation are valid,” even when a municipal tax occupies the same
field as a state tax. Cincinnati Bell at 606. As recently as 2013, we have adhered
to our decision in Cincinnati Bell, requiring that the General Assembly act
expressly to preempt municipal taxation in a particular field. See Gesler at ¶ 18,
20.
{¶ 16} With this background in mind, we now turn to the first proposition
of law. Mathys and Islander Inn contend that the General Assembly has acted to
limit municipal authority to tax motor vehicles by enacting its own statutory scheme
that taxes vehicle licensure and allows counties and municipalities to impose only
what Mathys and Islander Inn refer to as “piggyback” license taxes. See R.C.
4503.02 (imposing an annual state licensing tax); see also R.C. 4504.02 (allowing
an additional $5-per-vehicle county tax); R.C. 4504.06 (allowing an additional $5-

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per-vehicle municipal tax in certain circumstances). They assert that the
arrangement of an overarching state tax that allows for counties and municipalities
to “piggyback” additional taxes on that tax in $5 increments proves that “Ohio has
a singular statewide motor-vehicle licensing framework that no municipality may
intrude upon absent statutory enablement.”
{¶ 17} At bottom, Mathys and Islander Inn contend that the General
Assembly has implicitly preempted the tax imposed by Section 858.01 by imposing
a state license tax on motor vehicles. Aware that their argument is at odds with our
holding in Cincinnati Bell, Mathys and Islander Inn argue that Cincinnati Bell is
not applicable “to the situation of the licensing of motor-vehicles,” which,
according to them, “traditionally occup[ies] a special place in the law.” Mathys
and Islander Inn urge us to apply our holding in Firestone, 113 Ohio St. 57, 148
N.E. 470, instead. They assert that if we hold that Firestone was overruled by
Cincinnati Bell, then municipalities could “unilaterally create their own diverse
array of motor-vehicle licensing programs by levying local taxes,” to the effect of
requiring separate taxes to be paid and licenses to be displayed in every
municipality in Ohio simply to operate one’s vehicle on public roads. What Mathys
and Islander Inn fail to realize is that our holding in Firestone became obsolete long
before we decided Cincinnati Bell.
{¶ 18} When this court decided Firestone in 1925, the General Assembly
had yet to enact legislation permitting the additional local-government vehicle-
license taxes found in R.C. 4504.02 and 4504.06. But it had enacted legislation
imposing a statewide annual license tax, which was similar to the license tax that
the state now collects under R.C. 4503.02. See G.C. 6291 (“An annual license tax
is hereby levied upon the operation of motor vehicles on the public roads or
highways of this state, for the purpose of enforcing and paying the expense of
administering the law relative to the registration and operation of such vehicles and
of maintaining and repairing public roads and highways and streets”). Since

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nothing at the time permitted local governments to levy a tax on the operation of
motor vehicles on public roads and highways—which is what the ordinance at issue
in Firestone attempted to do—we followed our legal precedent by applying the
doctrine of implied preemption and held that the state tax preempted the local tax
by occupying the field. The holding in Firestone’s syllabus that “[n]o municipality
in this state has power to levy such excise tax in addition to that levied by the state
for similar purposes” had to do with the municipality’s attempt to levy a tax on
motor-vehicle operation and use on public roads. The law stated in the syllabus
was superseded by statute in 1967, when the General Assembly enacted R.C.
4504.02 and 4504.06, Am.Sub.H.B. No. 919, 132 Ohio Laws, Part II, 2787
(enactment of law); 132 Ohio Laws, Part I, 1546 and 1550 (text of law), which
expressly permit local governments to levy their own, albeit limited, tax on the
operation of motor vehicles on public roads.
{¶ 19} In light of these statutes, which remain in effect to this day, we find
that there is nothing left of our holding in Firestone that applies to the present case,
not even as dicta. Indeed, what remains of Firestone is nothing more than an
example of this court’s having at one time applied the doctrine of implied
preemption to determine the validity of local tax laws. As we have already
explained, this court did away with that approach when, in the syllabus of
Cincinnati Bell, 81 Ohio St.3d 599, 693 N.E.2d 212, we unequivocally stated that
“[t]he taxing authority of a municipality may be preempted or otherwise prohibited
only by an express act of the General Assembly.” (Emphasis added.)
{¶ 20} As an alternative argument, Mathys and Islander Inn assert that the
state vehicle-licensing tax scheme is itself “an express restriction on
municipalities,” since it specifies the amount municipalities may tax. On this point,
we largely agree. But as the discussion that follows demonstrates, this fact does
not affect the outcome of this case.

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{¶ 21} R.C. 4503.02 imposes an annual statewide license tax on the
operation of motor vehicles on public roads and highways. The purpose of the tax
is to enforce and pay the expense of administering laws related to the registration
and operation of motor vehicles, and, among other things, defray the costs of
maintaining and repairing state roadways. R.C. 4503.02. In addition to the
statewide license tax, the General Assembly has seen fit to allow local governments
a limited right to also impose a tax on the operation of motor vehicles on public
roads and highways, for the purpose of maintaining and repairing local roads, in
addition to other specified purposes. Specifically, R.C. 4504.02 states that county
governments may impose an additional $5 license tax on each motor vehicle
registered in the county. Likewise, R.C. 4504.06 allows municipalities to impose
a $5 license tax when the county has chosen not to impose its own tax.
{¶ 22} By restricting how local governments may go about imposing a
license tax on the operation of motor vehicles on public roads and by imposing a
cap on how much they may tax, the General Assembly has expressly limited a
municipality’s authority to tax the operation of motor vehicles. See Ohio Fin. Co.
v. Toledo, 163 Ohio St. 81, 86, 125 N.E.2d 731 (1955) (municipal taxing authority
is expressly preempted when statute expresses a clear intent to limit the
municipality’s authority to tax); Panther II Transp., Inc. v. Seville Bd. of Income
Tax Rev. 138 Ohio St.3d 495, 2014-Ohio-1011, 8 N.E.3d 904, ¶ 20 (“in the context
of Cincinnati Bell’s reasoning, the requirement of ‘an express act of restriction’
means only that the state does not preempt local taxes merely by enacting a similar
tax of its own”). But the fact that municipalities are limited in their ability to impose
a tax on the operation of a motor vehicle does not mean that the General Assembly
has prohibited all taxes involving motor vehicles. Indeed, Mathys and Islander
Inn’s arguments with regard to their first proposition of law rest on the flawed
assumption that the municipal tax imposed by Section 858.01 is the same as, or
similar to, the state license tax. It is not.

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{¶ 23} In contrast to the state vehicle-license tax imposed under R.C.
4503.02, and the additional local-government license taxes permitted by R.C.
4504.02 and 4504.06, Section 858.01 does not impose a license tax on the operation
of motor vehicles on public highways. Rather, by its plain terms, Section 858.01
imposes a business tax on rental vehicles. See Section 858.01 (“Owners of vehicles
used for the transportation of persons or property, for hire and for use within the
Village, shall pay by June 15 of each year, an annual, nontransferable vehicle
license fee for each vehicle * * *.” [Emphasis added]).
{¶ 24} Because this is a business tax, we are not persuaded by Mathys and
Islander Inn’s arguments that upholding Section 858.01 will result in a chaotic state
of local vehicle-licensing whereby every vehicle owner in Ohio will have to procure
a special license just to drive from one municipality to the next. Section 858.01’s
tax on rental vehicles does not interfere with the operation of vehicles in the village.
The “license fee” referred to in Section 858.01 does nothing to authorize or prohibit
a motor vehicle, including the rental vehicles at issue here, from being operated on
a public roadway within the village. And nothing in the ordinance requires that the
license fee be paid for vehicles that are not rented out by the owner. Put another
way, Matthys and Islander Inn may drive their golf carts in the village and may
even let others use the carts without charging for their use. But if Mathys and
Islander Inn want the privilege of renting those vehicles to others for use within the
village, they are required to pay the tax imposed by the ordinance on their rental
vehicles.
{¶ 25} Because the tax imposed by Section 858.01 is different from the state
license tax and because Mathys and Islander Inn have not pointed to any provision
of the Revised Code that expressly preempts the type of tax imposed by the
ordinance, we hold that the tax is a constitutional exercise of the municipality’s
right to tax under Article XVIII, Section 3 of the Ohio Constitution.

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Constitutionality under Article XII, Section 5a
{¶ 26} In their second proposition of law, Mathys and Islander Inn assert
that Section 858.01 is unconstitutional under Article XII, Section 5a of the Ohio
Constitution, which states:

No moneys derived from fees, excises, or license taxes
relating to registration, operation, or use of vehicles on public
highways, or to fuels used for propelling such vehicles, shall be
expended for other than costs of administering such laws, statutory
refunds and adjustments provided therein, payment of highway
obligations, costs for construction, reconstruction, maintenance and
repair of public highways and bridges and other statutory highway
purposes, expense of state enforcement of traffic laws, and
expenditures authorized for hospitalization of indigent persons
injured in motor vehicle accidents on the public highways.

{¶ 27} Mathys and Islander Inn posit that implicit within this constitutional
provision is the requirement that vehicle-license taxes may be imposed only by a
state statute or by an ordinance that is permitted by a state statute, because the taxes
collected may be expended only for statutory highway purposes. They further
reason that because the funds collected from taxes levied by a local ordinance
necessarily are expended on local purposes, or in other words, nonstatutory
purposes, any ordinance imposing a vehicle-license tax is constitutionally invalid
under Article XII, Section 5a.
{¶ 28} Again, this argument is based on a faulty assumption that the tax
imposed by Section 858.01 is for the operation or use of vehicles on public
highways. But as explained above in our preemption discussion, Section 858.01
operates as a business tax on the privilege of renting one’s vehicle as a business

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venture. Because the ordinance does not concern or otherwise place any limitations
on the operation or use of vehicles on public highways, we hold that Section 5a
does not prohibit the village tax.
Conclusion
{¶ 29} For the foregoing reasons, we find Mathys and Islander Inn’s
constitutional arguments against Section 858.01 unpersuasive. We affirm the
judgment of the Sixth District Court of Appeals and remand the matter to the
Ottawa County Court of Common Pleas for further proceedings consistent with this
decision.
Judgment affirmed
and cause remanded to trial court.
O’CONNOR, C.J., and PIPER and DONNELLY, JJ., concur.
FISCHER, J., concurs, with an opinion joined by KENNEDY and DEWINE, JJ.
ROBIN N. PIPER III, J., of the Twelfth District Court of Appeals, sitting for
FRENCH, J.
_________________
FISCHER, J., concurring.
{¶ 30} I agree with the majority opinion that Section 858.01 of the Codified
Ordinances of the Village of Put-In-Bay does not impose an unconstitutional tax
and that the judgment of the Sixth District Court of Appeals that reversed the trial
court’s dismissal of criminal charges against defendants-appellants, Mark Mathys
and Islander Inn, L.L.P., alleging failure to pay the tax should be affirmed. I write
separately because I believe that additional analysis relating to Mathys and Islander
Inn’s argument as to the application of Article XII, Section 5a of the Ohio
Constitution is necessary.
Application of Article XII, Section 5a of the Ohio Constitution
{¶ 31} The majority opinion concludes that the “license fee” created by
Section 858.01 is a business tax, because it operates as a tax on the privilege of

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renting one’s vehicle as a business venture, and thus, Article XII, Section 5a of the
Ohio Constitution does not apply to it. This analysis is too simplistic, and I would
address the arguments made by the parties.
{¶ 32} Ohioans voted to add Article XII, Section 5a to the Ohio Constitution
in 1947 after the amendment was proposed by initiative petition. Beaver
Excavating Co. v. Testa, 134 Ohio St.3d 565, 2012-Ohio-5776, 983 N.E.2d 1317,
¶ 19. The amendment reflects “the will of the state’s citizens to have money
obtained from taxes, fees, and licenses relating to the operation of motor vehicles
and motor-vehicle fuel expended exclusively for road projects, highway
improvement, and other similar costs such as the enforcement of traffic laws.” Id.,
citing Ohio Secretary of State, Proposal Submitted by Initiative Petition, Certified
Ballot Language, November 4, 1947; see 1982 Ohio Atty.Gen.Ops. No. 82-084,
1982 WL 187458. The provision was “designed to stop the diversion of tax
revenues intended for highway purposes to nonhighway-related purposes.” Beaver
Excavating Co. at ¶ 20.
{¶ 33} Article XII, Section 5a, of the Ohio Constitution states:

No moneys derived from fees, excises, or license taxes
relating to registration, operation, or use of vehicles on public
highways * * * shall be expended for other than costs of
administering such laws, statutory refunds and adjustments
provided therein, payment of highway obligations, costs for
construction, reconstruction, maintenance and repair of public
highways and bridges and other statutory highway purposes,
expense of state enforcement of traffic laws, and expenditures
authorized for hospitalization of indigent persons injured in motor
vehicle accidents on the public highways.

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Municipalities and Article XII, Section 5a
{¶ 34} In Garrett v. Cincinnati, this court noted that Article XII, Section 5a
“is a limitation only on the use of state-imposed fees, excise and license taxes and
is not applicable to fees imposed by municipal corporations.” (Emphasis added.)
166 Ohio St. 68, 69, 139 N.E.2d 35 (1956). The court in Garrett reasoned that the
use of the words “statutory” and “highway” in Article XII, Section 5a demonstrate
the intention to limit the application of the provision to state-imposed fees, excises,
and license taxes.
{¶ 35} While Garrett addressed a municipal fee, not a municipal tax, the
same logic applies in this case—Article XII, Section 5a applies to state-imposed
fees, excises, and license taxes, not those imposed by municipalities. Thus, the
“license fee” levied under Section 858.01 cannot be unconstitutional under Article
XII, Section 5a, because that section does not apply to municipalities.
Even if Article XII, Section 5a applied to municipalities,
the “license fee” imposed by Section 858.01 would not be unconstitutional
{¶ 36} Mathys and Islander Inn argue that because Article XII, Section 5a
contains no plain language limiting its application to state-imposed fees, excises,
or license taxes, it applies to municipal taxes as well. Furthermore, because Article
XII, Section 5a was added to the Constitution after this court had determined that
municipal corporations have the power to tax, see State ex rel. Zielonka v. Carrel,
99 Ohio St. 220, 227, 124 N.E.134 (1919), it could be argued that the lack of
limiting language indicates that Ohioans did not intend to limit this section’s
applicability to state action and thus it should be read broadly to include municipal
corporations. Accepting these arguments would require us to ignore the words
“statutory” and “highway” in Section 5a, which directly point to state function, as
we noted in Garrett. But even if we were to agree with Mathys and Islander Inn,
overrule Garrett, and apply Article XII, Section 5a to municipal taxes, the “license
fee” in Section 858.01 would not be unconstitutional. .

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{¶ 37} The “license fee” in Section 858.01 is an excise tax, because it is a
tax on the privilege of renting one’s vehicle as a business venture. See Saviers v.
Smith, 101 Ohio St. 132, 128 N.E. 269 (1920), syllabus. Therefore, the “license
fee” meets the first requirement in Article XII, Section 5a, as an excise tax.
{¶ 38} The next determination to be made in deciding whether Article XII,
Section 5a is applicable is whether the “license fee” is an excise tax “relating to”
the registration, operation, or use of vehicles on public highways. We have held
that “the phrase ‘relating to’ [in Article XII, Section 5a] should be construed
according to the plain and ordinary meaning given in the context of ‘political
discussions and arguments,’ in order to carry out the intention and objectives of the
people in making the Constitution, both as it was adopted and as it has been
amended.” Beaver Excavating Co., 134 Ohio St.3d 565, 2012-Ohio-5776, 983
N.E.2d 1317, at ¶ 30. The purpose of Article XII, Section 5a is to ensure that any
revenue raised from fees or taxes relating to registration, operation, or use of
vehicles on public highways, or to fuels used for propelling such vehicles is
expended only for the purposes specified in Section 5a. Id. Thus, we have
construed the phrase “relating to” in Section 5a broadly. See id. at ¶ 31-32. If we
construe “relating to” broadly, then it is quite clear that the Section 858.01 “license
fee” relates to the operation or use of vehicles on public highways. As is recognized
in the majority opinion, Section 858.01 requires Mathys and Islander Inn to pay the
excise tax in order to rent their golf carts out to other people to drive around Put-
in-Bay. Therefore, the “license fee” relates to the operation or use of vehicles on
public highways.
{¶ 39} We then must determine whether the “license fee” created by Section
858.01 is an excise tax that the revenue from which is expended for costs other than
those permitted by Article XII, Section 5a. Section 5a permits the revenue to be
expended for

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costs of administering [the law], statutory refunds and adjustments
provided therein, payment of highway obligations, costs for
construction, reconstruction, maintenance and repair of public
highways and bridges and other statutory highway purposes,
expense of state enforcement of traffic laws, and expenditures
authorized for hospitalization of indigent persons injured in motor
vehicle accidents on the public highways.

Section 858.01 specifically provides that “[a]ll moneys and receipts which are
derived from the enforcement of this section shall be credited and paid into a
separate fund” and “[a]ll moneys and receipts credited to such [f]und shall be used
for the sole purpose of repairing streets, avenues, alleys and lanes within the Village
of Put-in-Bay.” This purpose appears to be in line with the purpose indicated in
Article XII, Section 5a.
{¶ 40} Therefore, even assuming arguendo that Garrett was wrongly
decided and that Article XII, Section 5a does apply to municipalities, the “license
fee” created by Section 858.01 does not violate Article XII, Section 5a.
Conclusion
{¶ 41} Because I agree, albeit for slightly different reasons, with the
majority opinion that Section 858.01 of the Codified Ordinances of the Village of
Put-In-Bay does not impose an unconstitutional tax and that the judgment of the
Sixth District Court of Appeals that reversed the trial court’s dismissal of criminal
charges against Mathys and Islander Inn should be affirmed, I respectfully concur.
KENNEDY and DEWINE, JJ., concur in the foregoing opinion.
_________________
Walter Haverfield, L.L.P., Susan Keating Anderson, Village of Put-in-Bay
Solicitor, and Benjamin Grant Chojnacki, for appellee.
Mayle, L.L.C., Andrew R. Mayle, and Ronald J. Mayle, for appellants.

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