dissenting.
{¶ 30} I dissent from the holding that a vehicle owner who receives “goodwill repairs” is a “consumer” for use-tax purposes. I would affirm the Board of Tax Appeals (“BTA”) based on Gen. Motors Corp. v. Wilkins, 102 Ohio St.3d 33, 2004-Ohio-1869, 806 N.E.2d 517.
{¶ 31} A “consumer” for purposes of use tax is “any person who has purchased tangible personal property or has been provided a service for storage, use, or other consumption or benefit in this state. ‘Consumer’ does not include a person who receives, without charge, tangible personal property or a service.” (Emphasis added.) R.C. 5741.01(F). In this case, the payments for goodwill repairs by DaimlerChrysler Corporation (“DCC”) are more than simply payments for repairs performed after the warranty period. They are payments for property and services provided to the owner without charge, and are made for the benefit of DCC in that they help retain the customer’s loyalty and goodwill.
{¶ 32} In Gen. Motors, we affirmed the use-tax assessments upheld by the BTA against General Motors Corporation (“GM”) for amounts that GM, the manufacturer, had paid its Ohio dealers for parts and services to repair motor vehicles under the company’s warranty and special-policy repair programs even though GM claimed, as DCC does here, that it was not the consumer. Without overruling Gen. Motors, the majority allows DCC to escape assessment of the use tax by holding that DCC is not the consumer with respect to goodwill repairs.
{¶ 33} The majority artificially limits Gen. Motors to apply only to warranty repairs on the faulty basis that GM was the consumer in that case only because it received the benefit of fulfilling a warranty contract. But Gen. Motors had a broader application by its own terms. There, we rejected GM’s argument that “the motor vehicle owner is the consumer because he or she paid for the repairs when they [sic] paid for the warranty or repair programs as part of the purchase price of the motor vehicle.” (Emphasis added.) Id., 102 Ohio St.3d 33, 2004-Ohio-1869, 806 N.E.2d 517, ¶ 64. We recognized that the vehicle owner received those repair parts and services without charge, whether by warranty or not, and thus could not be a “consumer” for assessment of use tax. Id. at ¶ 65.
Jones Day and Charles M. Steines, for appellant. Marc Dann, Attorney General, and Barton A. Hubbard and Sophia Hussain, Assistant Attorneys General, for appellee.(¶ 34} The important fact to consider is whether the vehicle owner pays for the repairs. The majority acknowledges that DCC does not separately charge for goodwill repairs within a vehicle’s overall price. In an illogical leap, however, the majority remarks that “it is fair to view the portion of the price of the car that covers the cost of goodwill repairs as a ‘charge’ for those repairs under R.C. 5741.01(F).” Majority opinion at ¶ 12. But even if DCC builds the anticipated cost of goodwill repairs into the vehicle price, there is nothing in the record to show that the car owners are made aware by DCC or the car dealers of the possibility that they might receive free parts and services pursuant to the goodwill-repair program.
{¶ 35} Therefore, goodwill repairs, which by definition are made without charge to customers, are made at the company’s discretion. Yet DCC receives a benefit for these repairs in the form of its customers’ satisfaction. That benefit is similar to, rather than distinct from, GM’s benefit of fulfñling contractual obligations through warranty repairs. In other cases in which companies provided items free of charge to enhance the companies’ marketing efforts, customer-satisfaction goals, or similar business purposes, we held that the companies were subject to use tax for the items. See, e.g., Internatl. Thomson Publishing v. Tracy (1997), 79 Ohio St.3d 415, 683 N.E.2d 1091.
{¶ 36} I conclude that this matter is resolved by Gen. Motors Corp. v. Wilkins, 102 Ohio St.3d 33, 2004-Ohio-1869, 806 N.E.2d 517.
{¶ 37} Because DCC is the consumer for purposes of its goodwill-repair program, I dissent and would affirm the BTA’s decision.
Cupp, J., concurs in the foregoing opinion.