Featured Chrome Extensions:

Casey IRACs are produced by an AI that analyzes the opinion’s content to construct its analysis. While we strive for accuracy, the output may not be flawless. For a complete and precise understanding, please refer to the linked opinions above.

Keywords

statuteappealburden of proof
statuteappeallevy

Related Cases

Metropolitan Associates v. City of Milwaukee, 332 Wis.2d 85, 2011 WI 20, 796 N.W.2d 717
View Case »
Lanning v. Pilcher, 16 So.3d 294, 34 Fla. L. Weekly D1727
View Case »
Microsoft Corp. v. Franchise Tax Bd., 39 Cal.4th 750, 139 P.3d 1169, 47 Cal.Rptr.3d 216, 06 Cal. Daily Op. Serv. 7586, 2006 Daily Journal D.A.R. 10,843
View Case »
Appeal of Marple Springfield Center, Inc., 530 Pa. 122, 607 A.2d 708
View Case »
Federated Dept. Stores, Inc. v. Kosydar, 45 Ohio St.2d 1, 340 N.E.2d 840, 74 O.O.2d 1
View Case »
Justia Law Link
LexisNexis Link
Westlaw Link
CourtListener Link
Oyez Link

National Tube Co. v. Glander, 157 Ohio St. 407, 105 N.E.2d 648, 47 O.O. 313

Facts

The National Tube Company sought a refund of sales and use taxes paid on machinery used in its manufacturing of steel pipe and tubular products. The machinery in question included two Hulett ore unloaders and an ore bridge, which were used to unload iron ore and limestone from ships and distribute it over storage areas. The company argued that these machines were essential to its manufacturing process and thus should be exempt from taxation under relevant statutes.

The machinery and equipment involved consist of two Hulett ore unloaders, with parts therefor, and an ore bridge.

Issue

Whether the use of ore unloaders and an ore bridge by the National Tube Company qualifies for exemption from sales and use taxes under Ohio law.

The ultimate question to be answered by this court is whether on the record such decision by the board is unreasonable or unlawful.

Rule

Under Sections 5546-1 and 5546-25 of the General Code, tangible personal property is exempt from sales and use taxes only if it is used or consumed directly in the production of tangible personal property for sale by manufacturing, processing, or refining.

Under Sections 5546-1 and 5546-25, General Code, levying, respectively, sales and use taxes, the presumption obtains that every sale or use of tangible personal property in this state is taxable.

Analysis

The court analyzed the functions of the ore unloaders and the ore bridge, determining that they were used in preliminary and preparatory operations rather than in the actual manufacturing or processing of products. The court noted that the machinery did not transform the materials into a different state or form, which is a requirement for tax exemption. The court referenced previous cases to support its conclusion that the burden of proof lies with the claimant to establish entitlement to tax exemptions.

Through these initial movements, no apparent change takes place in the original materials, and by the described operations no actual manufacturing or processing of the materials into finished form ready for sale begins.

Conclusion

The Supreme Court affirmed the Board of Tax Appeals' decision, concluding that the machinery in question was not exempt from taxation as it was not used directly in the production of tangible personal property for sale.

We are of the opinion that the decision of the board herein can not be denoted as either unreasonable or unlawful, and the same is affirmed.

Who won?

The Board of Tax Appeals prevailed because the court found that the National Tube Company failed to demonstrate that its machinery was used directly in manufacturing or processing, as required for tax exemption.

The Board of Tax Appeals was justified in finding that the Hulett ore unloaders and the ore bridge are employed in operations preliminary and preparatory to manufacturing or processing, and are not used or consumed directly in producing tangible personal property for sale by manufacturing or processing within the contemplation of the applicable statutes.

You must be