Benken v. Porterfield, 68-474

• Decision Date: 21 May 1969
• Docket Number: No. 68-474,68-474
• Citation: 18 Ohio St.2d 133,247 N.E.2d 749
• Parties: , 47 O.O.2d 287 BENKEN et al., d. b. a. H. J. Benken, Florist, Appellants, v. PORTERFIELD, Tax Commr., Appellee.
• Court: Ohio Supreme Court

Page 133

18 Ohio St.2d 133

247 N.E.2d 749, 47 O.O.2d 287

BENKEN et al., d. b. a. H. J. Benken, Florist, Appellants, v. PORTERFIELD, Tax Commr., Appellee.

No. 68-474.

Supreme Court of Ohio.

May 21, 1969.

Syllabus by the Court

Under the provisions of Section 5711.22, Revised Code, the business of planting, cultivating, harvesting and selling flowers and vegetables, indoors in greenhouses, or outdoors in lath houses or planting beds in the ground, with substances being added to the soil to aid and protect the growing process, is agriculture. Machinery and equipment used in such activity shall be listed and assessed at 50 per cent of its value in money.

R. W. Benken and W. J. Wahl, doing business as H. J. Benken, Florist, appellants herein, are engaged in the business of planting, Cultivating, harvesting and selling flowers and vegetables. The business is located next to residential homes in Silverton, Ohio, on ten acres of land. One acre is leased to the United States Department of Agriculture, three and three-quarter acres are occupied by greenhouses, lath houses and planting beds. Tomatoes, mangoes and cucumbers are grown in the ground on a three-quarter acre plot. The remaining acreage is occupied by a residence, a retail sales area, a parking lot and vacant land. The plants are grown indoors, in six air-conditioned greenhouses, and outdoors in lath houses and several planting beds. Appellants also pasture five head of cattle, sell the caves, and use the manure as a soil additive.

Appellants' vegetable and floral plants usually are grown in soil improved by the addition of manure, peat moss, perlite and fertilizers.

Appellant's machinery and equipment used in the conduct of this business were listed in their 1967 personal property tax return, in Schedule 2, at 50 per cent of the property's alleged true monetary value. The Tax Commissioner determined that appellants' machinery and equipment were not used in agriculture and reclassified and assessed it at 70 per cent of its true value. Upon appeal, the Board of Tax Appeals affirmed the order of the Tax Commissioner.

The cause is before this court upon appeal as a matter of right.

Carlton S. Dargusch, Jr., Roger F. Day, Columbus, and Stanley Aronoff, Cincinnati, for appellants.

Paul W. Brown, Atty. Gen., and Jon A. Ziegler, Columbus, for appellee.

DUNCAN, Judge.

Section 5711.22, Revised Code, as in effect on January 1, 1967, in pertinent part provides:

'Except as otherwise provided, personal property shall be listed and assessed at seventy per cent of its true value in money * * *.

'* * *

'(C) Personal property, used in business, shall be listed and assessed at fifty per cent of its true value in money on the day that it is required to be listed or on the days or at the time that it is required to be estimated on the average basis as follows:

'* * * '(1) * * * all engines, machinery, tools, implements, and domestic animals used in agriculture * * *

'* * *

'(4) Agricultural products on farms * * *.'

Appellants contend that the machinery and equipment listed for personal property taxation is 'used in agriculture,' and is taxable at the 50 per cent rate set forth in Section 5711.22(C), Revised Code.

The Board of Tax Appeals, in its decision in the instant case, applied the definition of 'agriculture' set forth in the board's decision in the case Yoder Bros. Inc. v. Bowers, 169 Ohio St. 211, 158 N.E.2d 518, wherein this court affirmed the board's decision. That definition is as follows:

'The term 'agriculture' as it is employed in Revised Code Section 5711.22, is the art or science and labor of cultivating the ground, the planting, care of, and the harvesting of crops, under natural conditions in large quantities and in large fields on farms in this state, that are consumable by man or beast, or are useful or saleable in the open market, and the rearing, use of, feeding and management of livestock. Such crops include grains of all kinds, the products of pastures and meadows, and forage crops for winter consumption, fruits, vegetables, milk and dairy products, wool, meats, poultry, eggs, maple syrup, timber, and such crops as tobacco, flax and kindred products. It contemplates and includes all labor and products that are usually grown outdoors on farms in Ohio. It does not include those products that are produced by artifical means in greenhouses or ohter inclosed places and structures, hatcheries, nurseries and market gardeners who do not engage in general farming.

'Revised Code Section 5711.2i also classified 'agricultural products on farms' only, as entitled to a 50% classification. It does not go further and include the crops or products of greenhouses which could have been included. We think this limitation is significant of the fact that the Legislature, in classifying 'all engines, machinery, tools, implements and domestic animals used in agriculture' at a 50 per cent returnable valuation, had in mind only the implements, machines, crops and products of general farming in this state, and not those specialized activities that man has devised in recent years and that may be pursued on city lots and small tracts of suburban land.'

In the Yoder Bros. case, supra, the judges of this court being unable to agree upon a judgment, one judge not participating the decision of the Board of Tax Appeals was affirmed under the provisions of Section 2, Article IV, Ohio Constitution. Therefore, the board's definition of 'agriculture' presently enjoys tacit approval. In view of the demonstrated difference of opinions concerning this matter, we believe it necessary to review the use of the word 'agriculture,' in Section 5711.22, Revised Code.

Section 5388, General Code, predecessor of Section 5711.22, Revised Code, was enacted in 1931. (114 Ohio Laws 714, 720.) This court, in Eastern Machinery Co. v. Peck, 160 Ohio St. 144, 146, 114 N.E.2d 55, 57, noted the recommendation of the Senate committee, which stated the purpose of the amendment was 'to equalize the taxes of manufacture and agriculture, so that additional wealth may be developed in this state * * * to assist Ohio business in competition with other states * * *.' See, also, Bailey v. Evatt, 142 Ohio St. 616, 53 N.E.2d 812.

The parties herein do not contest the general purpose of the legislation, but appellee...