Craftsman Type, Inc. v. Lindley, 82-1665

• Decision Date: 27 July 1983
• Docket Number: No. 82-1665,82-1665
• Citation: 6 Ohio St.3d 82,451 N.E.2d 768
• Parties: , 6 O.B.R. 122 CRAFTSMAN TYPE, INC., Appellant, v. LINDLEY, Tax Commr., Appellee.
• Court: Ohio Supreme Court

Page 82

6 Ohio St.3d 82

451 N.E.2d 768, 6 O.B.R. 122

CRAFTSMAN TYPE, INC., Appellant, v. LINDLEY, Tax Commr., Appellee.

No. 82-1665.

Supreme Court of Ohio.

July 27, 1983.

Syllabus by the Court

Reliance solely upon the principle of expressio unius est exclusio alterius in construing R.C. 5739.01(B) is insufficient to overcome the presumption of taxability embodied in R.C. 5739.02 and shield a transaction from imposition of sales taxes.

Appellant, Craftsman Type, Inc., is a corporation engaged in the typesetting business whose primary customers are advertising agencies. Appellant's clients furnish it with layouts, i.e., sketches or rough drafts of written matter, which appellant converts into finished, highly stylized reproduction proofs. The customers then purchase the proofs from appellant for eventual use in the reproduction of printed material.

Appellee, Tax Commissioner of Ohio, levied a sales tax assessment against appellant based on its traffic in reproduction proofs during a three-year period ending December 31, 1977. Appellant objected to the assessment, contending that the transactions were tax exempt, that errors had been committed in calculating the amount of the tax liability and that the tax, in several instances, had already been paid. Upon review, appellee allowed some of the objections but, after adjusting the tax bill to reflect the allowances, otherwise upheld the original assessment.

Appellant subsequently appealed the assessment, as modified, to the Board of Tax Appeals which affirmed appellee's order. The cause is now before this court on an appeal as of right.

Cross & Turner and Emerson R. Keck, Dayton, for appellant.

Anthony J. Celebrezze, Jr., Atty. Gen., and James C. Sauer, Asst. Atty. Gen., for appellee.

LOCHER, Justice.

Appellant's rationale for seeking the reversal of the Board of Tax Appeals' decision is tripartite. First, appellant asserts that the operation of the principle of expressio unius est exclusio alterius (expression of one thing implies exclusion of another) removes the transfer of reproduction proofs from the definition of taxable "sales" set forth in R.C. 5739.01(B). Secondly, appellant argues that no tax liability has accrued as its customers purchase the proofs exclusively for uses specifically designated in R.C. 5739.01(E) as tax exempt. Finally, appellant contends that the transactions represent the rendition of non-taxable personal or professional services in which the tangible personal property transferred, i.e., the proofs, is inconsequential. R.C. 5739.01(B). For the following reasons, we dismiss each of appellant's claims.

R.C. 5739.01(B) provided at the time of the assessment herein, in pertinent part:

" 'Sales' and 'selling' include all transactions by which title or possession, or both, of tangible personal property, is or is to be transferred, or a license to use or consume tangible personal property is or is to be granted; * * * and include all transactions by which printed, imprinted, overprinted, lithographic, multilithic, blueprinted, photostatic, or other productions or reproductions of written or graphic matter are or are to be furnished or transferred; for a consideration in any manner, whether absolutely or conditionally, whether for a price or rental, in money or by exchange, and by any means whatsoever; * * *."

Relying upon the principle expressio unius est exclusio alterius, appellant urges that the General Assembly's failure to expressly include transactions in which reproduction proofs are to be transferred or furnished with those explicitly delineated as taxable in R.C. 5739.01(B) evinces the General Assembly's intent to exclude the former from taxation. Appellant, however, not only improperly construes "includ[ing]" as it is used in the statute, but also ignores the presumption of taxability found in R.C. 5739.02.

Both the common and general statutory usage of the word "including" significantly discredit the providence of applying the doctrine of expressio unius est exclusio alterius to the instant action. Indeed, earlier this year, we rejected an interpretation of "including" identical to that presently advanced by appellant. In In re Hartman (1983), 2 Ohio St.3d 154, 156, 443 N.E.2d 516, this court stated: " 'Including' is a word of expansion rather than one of limitation or restriction." Therefore, the omission of transactions involving reproduction proofs from the chronicle of transfers following "includ[ing]" in R.C. 5739.01(B) cannot reasonably be read as a concerted attempt by the General Assembly to exclude such transfers from imposition of the sales tax.

More importantly, however, R.C. 5739.02 renders the principle of expressio unius est exclusio alterius completely inapposite in the present context. The statute reads in pertinent part:

"For the purpose of the proper administration of sections 5739.01 to 5739.31 of the Revised Code, and to prevent the evasion of the tax, it is presumed that all sales made in this state are subject to the tax until the contrary is established."

Thus, the statute requires that a vendor overcome the presumption that the transfers in which he has engaged are taxable in order to avoid an assessment. Appellant's unsupported pronouncement that the General Assembly's failure specifically to provide for the taxability of the subject transactions precludes the levying of a sales tax assessment thereon hardly constitutes the probative evidence of non-taxability necessary to negate the presumption. Indeed, as this court stated in paragraph two of the syllabus in National Tube Co. v. Glander (1952), 157 Ohio St. 407, 105 N.E.2d 648 : "Statutes relating to exemption or exception from taxation are to be strictly construed, and one claiming such exemption or exception must affirmatively establish his right thereto." See, also, May Company v. Lindley (1982), 1 Ohio St.3d 6, 9, 437 N.E.2d 295; Cooperative Pure Milk Assn. v. Kosydar (1976), 45 Ohio St.2d 23, 24, 340 N.E.2d 408 . Appellant has in no way met its burden.

We thus hold that reliance solely upon the principle of expressio unius est exclusio alterius in construing R.C. 5739.01(B) is insufficient to overcome the presumption of taxability embodied in R.C. 5739.02 and shield a transaction from imposition of sales taxes.

For similar reasons appellant's contention that the transfers of reproduction proofs are exempt from sales taxation under R.C. 5739.01(E) ¹ must also fail. First, appellant, in contravention of R.C. 5739.03(B), ² did not timely secure the required certificates from its customers to support its claimed exemptions. Appellant responds, however, that such failure is, under the latter provisions of R.C. 5739.03(B), excused because its clients, particularly the advertising agencies, in purchasing reproduction proofs, are never subject to sales tax since the use to which they put the proofs is tax exempt.

This court would most willingly accept appellant's argument had appellant adduced, within the period permitted under R.C. 5739.03(B), sufficient proof that its customers' purchases of the subject goods were always tax...