Jackson Iron & Steel Co. v. Glander
| Decision Date | 16 December 1950 |
| Docket Number | No. 32171,32171 |
| Citation | 96 N.E.2d 21,154 Ohio St. 369 |
| Parties | , 43 O.O. 255 JACKSON IRON & STEEL CO. v. GLANDER, Tax Com'r. |
| Court | Ohio Supreme Court |
Syllabus by the Court.
Sections 5546-1 and 5546-25, General 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.
A decision was rendered by the Board of Tax Appeals affirming with modifications and order of the Tax Commissioner imposing taxes on the purchase and use of certain mining machinery and equipment by The Jackson Iron & Steel Company for use in the production of coal in mines owned by it, which coal is subsequently used and consummed by the company in the manufacture of pig iron for sale.
The claim for exception from taxation is not based on the theory that the machinery and equipment purchased is used directly in the mining of coal, but on the theory that the exception obtains and should be applied because the coal mined with the machinery and equipment is used directly in the production of pig iron.
An appeal from the decision of the Board of Tax Appeals brings the controversy to this court for determination.
Bricker, Marburger, Evatt & Barton, Columbus, for appellant.
Herbert S. Duffy, Atty, Gen., W. H. Annat, Columbus, and Hugh A. Sherer, Asst.Atty.Gen., for appellee.
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.
Section 5546-1, General Code, relating to 'sales,' and § 5546-25, General Code, relating to 'use,' as they pertain to the instant case, except from taxation only those sales where 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.
The precise question now before the court is whether machinery and equipment purchased for use in mining coal, which coal is not sold but is later used in the production of pig iron, are used directly in the production of tangible personal property, within the contemplation of the exceptions referred to above.
This court has had occasion to decide a number of cases involving the Ohio sales and use tax acts and the exceptions thereto. Most of these cases have been cited and commented upon by counsel in their briefs and upon oral argument, and it would seem in order to summarize briefly the holdings heretofore made.
In Saunders Mills, Inc., v. Evatt, Tax Com'r 139 Ohio St. 277, 39 N.E.2d 526, it was held that the purchase of motor trucks by a company to transport alfalfa over the public roads from fields leased by the company to plants of the company, where such alfalfa was converted into meal, was subject to taxation for the reason that such trucks were engaged solely in the transportation of alfalfa to dehydrating plaints where the actual processing of the alfalfa into meal began.
In Bailey v. Evatt, Tax Com'r, 142 Ohio St. 616, 53 N.E.2d 812, it was held that the purchases of equipment used in stripping the soil from natural gravel deposits was excepted from taxation because such equipment was used directly in mining.
In France Co. v. Evatt, Tax Com'r, 143 Ohio St. 455, 458, 55 N.E.2d 652, 654, a majority of the court was of the opinion that the purchase of dump cars, movable tracks, etc., used in the transportation of crushed-stone products from a stone crushing and screening plant to yards adjacent thereto for draining, cleansing, blending and reassembling, was excepted from taxation, on the basis that these movements were part of a continuous process to prepare the product for delivery, and that the product was not completed and ready for purchasers until such operations had ended.
In Dye Coal Co. v. Evatt, Tax Com'r, 144 Ohio St. 233, 58 N.E.2d 653, the holding was that the purchase of automobile trucks by a mining company for use in hauling coal from the pits to a tipple where such coal was cleaned and graded for shipment, was excepted from taxation, for the reason that such use was a part of mining.
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...* * *.' See, also, W. E. Anderson & Sons Co. v. Glander (1951), 154 Ohio St. 561, 97 N.E.2d 29. In Jackson Iron & Steel Co. v. Glander (1950), 154 Ohio St. 369, 373, 96 N.E.2d 21, 23, we reviewed nine prior decisions in the area of direct use exception and gleaned from them a general '* * *......
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