For the reasons that follow, we affirm the decision of the BTA.
OsAir formerly conducted business under the name of Osborne Brothers Welding Supply, Inc. In Osborne Bros. Welding Supply, Inc. v. Limbach *505(1988), 40 Ohio St.3d 175, 532 N.E.2d 739, we affirmed the appellate court, which held similar transactions taxable.
The instant appeal bears a strong similarity to Osborne Bros., supra. The appellant is the same party as in Osborne Bros., except that its name has been changed. Essentially the same propositions of law were raised as in the prior case. The same sales agreement appears to have been used, and, insofar as the record reflects, the same practices were employed by appellant in its business.
As to OsAir’s first contention — that the demurrage charges are a nontaxable penalty — OsAir’s Gas Shipper agreement specifically requires payment of a charge of sixteen cents per day per cylinder beyond a specified free period for failure to return cylinders as agreed. The BTA was correct in finding that OsAir failed to establish that the charges were a penalty and not a charge paid in exchange for use of the cylinders. See Osborne Bros., supra. Thus, we reject OsAir’s first contention.
Likewise, as in Osborne Bros., we reject OsAir’s second contention — that the charges are exempt from taxation pursuant to R.C. 5739.02(B)(11) — for the reason that “[t]he cylinder is not the method of transporting the industrial gas; it is merely the container in which the purchased gas is placed.” Id. at 178, 532 N.E.2d at 742.
OsAir’s third contention — that the charges are exempt from taxation under R.C. 5739.02(B)(15) — requires more scrutiny. We did not consider this claim in Osborne Bros., because the issue was not properly presented to us. Now, it is.
Former R.C. 5739.02(B)(15) provided at the time of the audit period that the tax does not apply to “sales * * * of packages * * * and material for use in packaging tangible personal property produced for sale, or sold at retail. Packages include * * * other similar devices and containers * * *.” OsAir argues that cylinders used to hold the gas which it sells to customers are packages, and under the plain language of the statute, the packaging exemption applies. We disagree.
R.C. 5739.02 levies a tax on “each retail sale made in this state.” R.C. 5739.03 provides that the tax “shall be paid by the consumer to the vendor.” It is axiomatic that a provision creating an exemption from taxation must be strictly construed and that exemption is the exception to the rule. Am. Soc. for Metals v. Limbach (1991), 59 Ohio St.3d 38, 40, 569 N.E.2d 1065, 1067.
The exemption for packages is available to the consumer (OsAir’s customer) and not to the vendor (OsAir), and the record does not disclose that OsAir’s customers executed exemption certificates, as required, at the time of purport*506ed nontaxable sales. Further, the BTA correctly found that OsAir did not present evidence to show that OsAir’s customers acquired the cylinders “for use in packaging tangible personal property produced for sale, or sold at retail.”
The decision of the BTA, that the subject transactions were taxable, is reasonable and lawful, and it is affirmed.
Decision affirmed.
Moyer, C.J., A.W. Sweeney, Douglas, Resnick and F.E. Sweeney, JJ., concur. Wright and Pfeifer, JJ., dissent.