The sole issue presented herein is whether the decision of the Board of Tax Appeals (“BTA”) holding that the transfer of the 12 trailers is subject to the Ohio sales tax is unreasonable or unlawful.
Appellant urges two grounds for reversal of the BTA’s decision: (1) there was no “sale” subject to tax within Ohio; and (2) imposition of a sales tax under the facts of this case would contravene Clause 3, Section 8, Article I of the Constitution of the United States — the Commerce Clause.
Appellant contends that before the Ohio sales tax may apply there must first be a “sale” in Ohio; i.e., there must be a transaction by which title or possession of tangible personal property is transferred for a consideration in Ohio. Stated simply, appellant argues that neither of the statutory definitions of “sale” apply in this cause. First, appellant maintains that since the 12 trailers were already in its possession on March 15, 1976, there was no “transfer” of possession in Ohio. Second, according to appellant the only basis for imposing a sales tax would, thus, be on the transfer of title and this event occurred, not in Ohio, but in Michigan.1
R.C. Chapter 5739 provides the legislative mandate for the sales tax. R.C. 5739.02 provides for an excise tax on retail sales in Ohio. According to R.C. 5739.01(B), a sale includes all transactions in which title or possession or both, of tangible personal property, is transferred. Because PPG already had possession of the trailers, the sale occurred in Ohio only if the transfer of title transpired in Ohio.2
R.C. 1302.42 helps in determining when and where the titles were *214transferred. On these facts, R.C. 1302.42(A) governs this determination. It states “* * * title to goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed on by the parties.”3 The parties agreed that the title would be transferred in Michigan. Although the contract of sale is not included in the record, the Board to Tax Appeals’ decision concluded that the Fruehauf Corporation, the seller, had contractually bound itself to transfer title to the semi-trailers. This conclusion is supported by the stipulation of the parties that “[t]itles to the trailers were transferred from Fruehauf to PPG in the state of Michigan.” The parties agreed to transfer title in Michigan and, thus, R.C. 1302.42(A) controls.
Because neither possession nor title was transferred in Ohio, the sale did not occur within the state. Pursuant to R.C. 5739.02, which allows for an excise tax on retail sales in Ohio, the tax was improperly levied on these out-of-state trailers. Only those sales made within the state can be taxed, but not those sales outside its borders.
Inasmuch as the transaction at issue did not occur in Ohio, the BTA unreasonably and unlawfully upheld the commissioner’s assessment on appellant’s trailers. In reversing the BTA on statutory grounds we find it unnecessary to address appellant’s constitutional contentions.
For the reasons hereinbefore stated, the decision of the BTA is reversed.
Decision reversed.
Celebrezze, C.J., W. Brown, Sweeney, Hot,mes and C. Brown, JJ., concur. Locher and Krupansky, JJ., dissent.In oral argument, both parties stated that a sales tax had been paid in Michigan on the March 1976 sale.
The sale was a separate transaction, not contemplated in the prior lease. Delivery at the time of the lease cannot be equated with transfer of possession at the sale. Therefore, there was no transfer of possession that R.C. 5739.01(B) requires for a sale.
The language of R.C. 5739.01(B) clearly requires a transfer of title or possession and does not make a sale dependent upon the situs of the signing of a contract.