City Blue Printing Co. v. Bowers, 34061
| Decision Date | 02 March 1955 |
| Docket Number | No. 34061,34061 |
| Parties | , 56 O.O. 3 The CITY BLUE PRINTING CO., Appellant, v. BOWERS, Tax Com'r, Appellee. |
| Court | Ohio Supreme Court |
Syllabus by the Court
One engaged in the business of producing by photostating, blueprinting, Ozaliding and other similar processes copies of documents, drawings, photographs, prints, etc., the price thereof charged to the customer being largely dependent on the quantity of copies ordered and the type of processing used in their production, is a vendor, and the purchases of the materials he consumes and uses in his business are not subject to sales and use taxes under Sections 5546-2 and 5546-26, General Code, Sections 5739.02 and 5741.02, Revised Code.
The City Blue Printing Company, appellant herein, is an Ohio corporation located in the city of Cleveland. It is engaged in the business of producing by photostating, blueprinting, Ozaliding and other processes not involved herein copies of documents, drawings, photographs, prints, etc., furnished it by its customers for such purpose.
On a determination that appellant's activities constituted the rendition of personal services and did not represent sales, the Tax Commissioner, applying his Rule No. 101, made a substantial assessment of sales and use taxes against appellant, based upon items purchased by it for consumption in its business during the period beginning July 1, 1947, and ending June 30, 1951. Obviously, no sales or use taxes were paid by appellant as to such items. The theory upon which the Tax Commissioner proceeded was that appellant was the end consumer of such items and thus is amenable to the taxes imposed.
On appeal, the Board of Tax Appeals, one member dissenting, affirmed the order of the Tax Commissioner, and thereupon appellant exercised the right of appeal accorded it by statute and brought the cause to this court for determination.
Thompson, Hine & Flory, Frank E. Bubna, William J. Vesely, Cleveland and Clark, Hunker, Adelman & Marku, Canton, for appellant.
C. William O'Neill, Atty. Gen., and Jack H. Bertsch, Columbus, for appellee.
Both the Tax Commissioner in making the assessment and the board in affirming the assessment order followed the Tax Commissioner's Rule No. 101, which recites in part:
'Where printed pictures are made from developed negatives and sold to a customer, the sale is one of tangible personal property and is subject to the tax.
'Sales of portraits, frames, camera films and other articles by photographers or photo-finishers to purchasers for use are sales at retail and taxable.'
Upon the application of such rule it was determined that appellant in producing copies of the articles furnished it by its customers was engaged in the rendition of a service, and, hence, that it was the consumer of the items used for such purposes and is amenable to the sales and use taxes.
Appellant contends that Rule No. 101, as applied to it, is arbitrary, unsound and contrary to law, for the reason that the transfers by it to its customers of blueprint, photostatic and Ozalid copies for a money consideration constituted a 'sale' within the meaning and intent of the Ohio sales and use tax acts.
The assessment against appellant was levied under the provisions of Sections 5546-2 and 5546-26, General Code, Sections 5739.02 and 5741.02, Revised Code.
Section 5546-2, General Code, provides:
'* * * an excise tax is hereby levied on each retail sale made in this state of tangible personal property * * *.'
And Section 5546-26, General Code, reads:
'* * * an excise tax is hereby levied on the storage, use, or other consumption in this state of tangible personal property purchased * * * for storage, use, or other consumption in this state * * *.'
Then, Section 5546-1, General Code, Section 5739.01, Revised Code, defines 'retail sale' as including all sales excepting those in which the purpose of the consumer is '(b) to incorporate the thing transferred as a material or a part, into tangible personal property to be produced for sale by manufacturing, assembling, processing or refining, or to use or consume the thing transferred directly in the production of tangible personal property for sale by manufacturing, processing * * *.'
Likewise, Section 5546-25, General Code, Section...
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