General Motors Corp., Fisher Body Division v. Bowers

• Decision Date: 24 June 1959
• Docket Number: No. 35913,35913
• Parties: , 8 O.O.2d 373 GENERAL MOTORS CORP., FISHER BODY DIVISION, Appellant, v. BOWERS, Tax Commr., Appellee.
• Court: Ohio Supreme Court

Page 361

169 Ohio St. 361

159 N.E.2d 739, 8 O.O.2d 373

GENERAL MOTORS CORP., FISHER BODY DIVISION, Appellant, v. BOWERS, Tax Commr., Appellee.

No. 35913.

Supreme Court of Ohio.

June 24, 1959.

Syllabus by the Court

1. Under the provisions of Sections 5739.01, 5739.02, 5741.01 and 5741.02, Revised Code, sales and use taxes are not assessable when the purpose of the consumer is to use or consume the thing transferred directly in the production of tangible personal property for sale by manufacturing or processing.

2. Such sales and use tax exceptions are not applicable to tools purchased and used for the manufacture of other tools which in turn are later used directly in the manufacture of automobile body panels.

On May 1, 1958, the Tax Commissioner of Ohio levied a tangible personal property sales and use tax assessment against the appellant herein, the General Motors Corporation, Fisher Body Division, in the sum of $112,497.

On an appeal to the Board of Tax Appeals, the order of the Tax Commissioner was affirmed.

An appeal has now been perfected to this court.

Henry M. Hogan, Donald K. Barnes, Detroit, Mich., and George, Greek, King & McMahon, Columbus, for appellant.

Mark McElroy, Atty. Gen., and John M. Tobin, Columbus, for appellee.

WEYGANDT, Chief Justice.

The assessment is for the latter part of 1955, all of 1956 and part of 1957 on the use and sale of certain machine tools and equipment bought and used by the appellant for the building, maintaining and repairing of dies, fixtures and other parts of metal working presses. The function of these presses is to stamp automobile body panels.

The single question here presented is whether, under the provisions of Sections 5739.01 and 5741.01, Revised Code, 'the purpose of the consumer is * * * to use or consume the thing transferred directly in the production of tangible personal property for sale by manufacturing, processing, refining, or mining * * *.' (Italics supplied.)

The controlling facts are not in dispute, and most of them are stipulated. None of this personal property was utilized in the actual production of body stampings. None of the dies and fixtures produced by the use of this property was produced for sale. None of this property was used as much as 50 per cent of the time solely in the repair and maintenance of dies, fixtures and presses. In its opinion the Board of Tax Appeals summarized the facts as follows:

'These newly fabricated dies and fixtures do not have the character of repairs or maintenance tools. When they are installed in the presses after their fabrication they have their designated work to do in the fabrication of automobile body parts or panels out of sheet metal. The fixtures, socalled, are apparently, devices for holding the sheet metal in place while the dies activated by power transmitted to it by other parts in the presses give form to the automobile body parts or panels and stamp the same out of the sheet metal. While these dies and fixtures may need repair and maintenance from time to time, they are not in and of themselves repairs or maintenance tools of the presses or of any other parts therein. Moreover, the dies and fixtures here under consideration were fabricated by the appellant and were not purchased by it; and no sales tax or use taxes were assessed on and with respect to the acquisition and use of such dies and fixtures, and, of course, no such taxes are included in the assessment complained of in this appeal.'

The appellant, the appellee and the Board of Tax Appeals all city the decision of this court in the case of the Jackson Iron & Steel Co. v. Glander, 154 Ohio St. 369, 96 N.E.2d 21. The appellant seeks to distinguish it while the appellee and the Board of Tax Appeals consider it controlling here. This court concurs in the latter view.

The single paragraph of the syllabus in the Jackson case, supra, reads as follows:

'Sections 5546-1 and 5546-25, General Code [now Sections 5739.01 and 5741.01, Revised Code], except from taxation sales of articles where the purpose of the consumer is to use or consume the article transferred directly in the production of tangible personal property for sale by manufacturing, processing or mining. The purchase of machinery and equipment for use in mining coal, which coal is not sold but is used in the production of pig iron for sale, does not come within the exceptions of the above statutes.'

And in the opinion by Zimmerman, J., appears the following cogent rationale:

'By the language employed in §§ 5546-1 and 5546-2, General Code, the obvious intent of the General Assembly was to impose an excise tax on every retail sale made in the state of Ohio of tangible personal property, with certain specified exceptions.

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