General Motors Corp. v. Kosydar

Paul W. Brown, J.,

concurring. I concur in the judgment* of reversal, but for reasons other than those stated in the majority opinion.

Under the circumstances of this case, the sale in question is within the exception contained in E. C. 5739.01(E) in that “the purpose of the consumer is * * * to use or consume the thing transferred directly in the production of tangible personal property for sale by manufacturing.”

*149Under R. C. 5739.01(E), the purpose of'the consumer is controlling, and I find no language in the statute that requires the Tax Commissioner, or the Board of Tax Appeals, to look beyond the purpose of the consumer.

An excepted purpose must exist at the time of the sale in order to make it an excepted sale. The character and identity of the user is immaterial as long as no other sale occurs, and may not become apparent until the performance of the manufacturing process for which the tooling is designed is commenced. When the manufacturing process has commenced, it is immaterial, for the purpose of the exception, whether General Motors employs an individual on the payroll of one of its divisions to use the tool or employs an independent outside corporation for the same purpose. Only one sale has occurred, and whether the sale is within the exception of the statute is determined by the consumer’s purpose at the time the sale—not by the nature of a contractual arrangement between the consumer and the agent using the tool, whether corporate or individual.*

Since the use of the tooling by the supplier was for and on behalf of General Motors, and as its corporate agent, I conclude that there was no sale by General Motors, and that both the holding and the use of the patterns, jigs, dies, or drawings were such that R. C. 5701.03 applies so as to execpt those items from the statutory definition of personal property. I would reverse the decision of the Board of Tax Appeals in its entirety.

Zinc Engravers v. Bowers (1958), 168 Ohio St. 43, supports appellant’s position rather than that of the appellee, for there the court held that the consumer did have the purpose of retailing when it purchased the engravings, and allowed an exception from taxation upon the basis that they were used directly in making retail sales in spite of the fact that the use was actually by a third party. There was only one sale and the undeniable purpose of the consumer at the time of the sale was to use the property directly in making retail sales.

Apex Powder Corp. v. Peck (1954), 162 Ohio St. 189, 191; supports this holding and contains the following:
“* * * The statutory words only require that such consumer must have a ‘purpose * * * to use * * * the thing transferred directly in the production of tangible personal property for sale.’ ”