DeNoon v. Limbach

Douglas, J.,

concurring. I concur in the judgment of the majority. Arguably, the chalk and lumber crayons should be excepted from tax because their use occurs while the manufacturing process is taking place. This point is not even contested in appellant’s brief which contains no discussion or explanation as to why appellant Tax Commissioner thinks the chalk and crayons should be taxed.

With regard to the other items in question — the high lifts, the Barko crane, the lumber carts, fuel and spare parts — I strongly agree with the majority that these items should not be excepted from taxation as items used or consumed directly in the production of tangible personal property for sale by manufacturing or processing. I write separately only to express, once again, my concern for the piecemeal dismantling of the Tax Code.

It is understandable how the BTA came to the decision it rendered in this case. In attempting to follow the decision of a majority of this court in Southwestern Portland Cement Co. v. Limbach (1988), 35 Ohio St. 3d 196, 519 N.E. 2d 831, the BTA found all the items in question excepted from taxation. If the equipment used in the quarrying operation, reviewed in Southwestern Portland Cement Co., is excepted from taxation even though the business involved was the manufacture of cement and no change in state or form of the limestone took place until much later in the operation, then it is easy to see how the BTA, in applying the rule set down in Southwestern Portland Cement Co. to the facts of that case, could come to the decision it did in the case at bar.

Even though it requires us to reverse the BTA (which thought it was relying on and following a previous decision of this court), it is both comforting and commendable to see us returning to what appears to be a clear definition of “manufacturing” and “processing” as set forth in R.C. 5739.01(R). It is not difficult to see how any one of us, including the BTA, could go astray when cases such as Mead Corp. v. Glander (1950), 153 Ohio St. 539, 42 O.O. 24, 93 N.E. 2d *3919; Youngstown Bldg. Material & Fuel Co. v. Bowers (1958), 167 Ohio St. 363, 5 O.O. 2d 3, 149 N.E. 2d 1; Ohio Ferro-Alloys Corp. v. Kosydar (1973), 34 Ohio St. 2d 113, 63 O.O. 2d 195, 296 N.E. 2d 533; Gressel v. Kosydar (1973), 34 Ohio St. 2d 206, 63 O.O. 2d 314, 297 N.E. 2d 532; Interlake v. Kosydar (1975), 42 Ohio St. 2d 457, 71 O.O. 2d 436, 330 N.E. 2d 444; Semac Industries v. Collins (1976), 48 Ohio St. 2d 4, 2 O.O. 3d 2, 354 N.E. 2d 922; Standard Pressed Steel Co. v. Lindley (1980), 62 Ohio St. 2d 268, 16 O.O. 3d 318, 405 N.E. 2d 281; Southwestern Portland Cement Co. v. Lindley (1981), 67 Ohio St. 2d 417, 21 O.O. 3d 261, 424 N.E. 2d 304; OAMCO v. Lindley (1986), 27 Ohio St. 3d 7, 27 OBR 427, 500 N.E. 2d 1379; and Southwestern Portland Cement Co. v. Limbach (1988), supra, are attempted to be reconciled.

It is the mandate of this court that “ ‘[statutes relating to the exemption or exception from sales or use taxes are to be strictly construed.’ ” Philips Industries, Inc. v. Limbach (1988), 37 Ohio St. 3d 100, 101, 524 N.E. 2d 161, 161-162. See, also, Celina Mut. Ins. Co. v. Bowers (1965), 5 Ohio St. 2d 12, 15, 34 O.O. 2d 7, 9, 213 N.E. 2d 175, 178; General Mills, Inc. v. Limbach (1988), 35 Ohio St. 3d 256, 258, 520 N.E. 2d 218, 219. If we would just consistently follow this mandate, there would be less confusion (and fewer appeals) for taxpayers, the commissioner, the bar and the bench.

Sweeney, J., concurs in the foregoing concurring opinion. Holmes, J., dissenting. I totally agree with the Board of Tax Appeals’ decision and would therefore affirm. Wright, J., concurs in the foregoing dissenting opinion.