Hawthorn Mellody, Inc. v. Lindley

Clifford F. Brown, J.,

concurring in part and dissenting in part.

I concur in the judgment affirming that part of the Board of Tax Appeals’ decision excepting from sales taxation the refrigerant tank, two Muller tanks and the case conveyor system, but I dissent from the reversal of the board’s decision which excepted from sales taxation the intercorporate transfers of equipment.

It is my view that these intercorporate transfers of equipment are excepted from sales taxation under the controlling *57authority of our recent decision in IBEC Industries v. Lindley (1980), 62 Ohio St. 2d 279. There, we held, at page 282, that the transfer of all corporate assets and liabilities from one corporate division to a wholly owned subsidiary of the same corporation was not a taxable “sale” for “consideration,” but was “ * * * merely a shifting of assets by a corporation from one division to another” which did not subject the transfer to taxation. In the cause sub judice, no money or other property was ever transferred to the transferor corporation to discharge its accounts receivable from the transferee corporation. These intercorporate transfers did not create the passing of actual “consideration” from one corporate entity to another.

The treatment accorded these intercorporate transfers excepting them from sales taxation should be identical to the sales tax exception accorded IBEC Industries, supra, and in Roberts, Inc., v. Kosydar (1975), 42 Ohio St. 2d 495. See, also Kloepfers v. Peck (1953), 158 Ohio St. 577. Although factually distinguishable, the rationale of Roberts Inc., supra, is applicable and supports the same result contained in IBEC Industries, supra. Roberts involved bookkeeping entries reflecting transfers of equipment from a partnership to a corporation wholly owned by such partners and is analogous to the transfer among the corporate entities in the case sub judice, wherein the corporate subsidiaries are wholly owned by the parent corporation.

Holmes, J., concurs in the foregoing concurring and dissenting opinion.