Joslyn Mfg. & Supply Co. v. Bowers
| Decision Date | 04 May 1960 |
| Docket Number | No. 36171,36171 |
| Citation | 170 Ohio St. 575,167 N.E.2d 349 |
| Parties | , 11 O.O.2d 420 JOSLYN MFG. & SUPPLY CO., Appellee, v. BOWERS, Tax Com'r, Appellant. |
| Court | Ohio Supreme Court |
Syllabus by the Court.
Personal property held in Ohio pending shipment directly to customers is not held 'for storage only' within the meaning of Section 5701.08, Revised Code, and is subject to taxation as property used in business in Ohio regardless of whether such shipment upon order by customers is to points inside or outside Ohio.
This cause was presented to the Board of Tax Appeals on a stipulation of facts entered into by counsel for the respective parties and which included the following:
'1. The appellant, Joslyn Manufacturing & Supply Co., an Illinois corporation has a place of business at 2036 Dana Avenue in Cincinnati, Ohio, at which it holds pole-line hardware (outside electrical construction material) consisting of such items as nuts, bolts, rods, braces, clevises, insulators, and the like, the average dollar value of the inventory of such items being $235,340 as determined by the Tax Commissioner.
'2. All items are shipped from a point of origin outside Ohio and are held at the Cincinnati place of business, without being processed, manufactured or treated in any way by the appellant. The only items which are treated to any extent by the appellant are fir cross-arms. 50.63% (exclusive of fir cross-arms) of the average dollar amount of $235,340 is shipped to various points outside Ohio, within the states of Kentucky, Tennessee, West Virginia, Indiana and Virginia.
'3. The items which are shipped to points outside of Ohio are done so upon order by customers of the appellant and are shipped directly to such customers from appellant's place of business in Cincinnati, Ohio.'
Based upon the facts incorporated in the stipulation, the Tax Commissioner found the subject property to be subject to the Ohio personal property tax. Upon appeal by the taxpayer to the Board of Tax Appeals, the final order of the Tax Commissioner was reversed, and the matter is before this court pursuant to the perfecting of an appeal by the Tax Commissioner.
Carlton S. Dargusch, Carlton S. Dargusch, Jr., and Jack H. Bertsch, Columbus, for appellee.
Mark McElroy, Atty. Gen., and Robert J. Kosydar, Toledo, for appellant.
As stated in the entry of the Board of Tax Appeals, the single question presented is 'whether personal property which is manufactured outside Ohio, shipped into this state where it is held without further processing, and remains here until it is shipped upon order to customers outside Ohio, is being held in Ohio 'for storage only' and, therefore, subject to the exception set forth in Section 5701.08, Revised Code, and thus is not 'used in business' in Ohio.' The portion of the Revised Code section referred to and with which we are here concerned reads as follows:
'* * * merchandise or agricultural products shipped from outside of this state and held in this state in a warehouse or a place of storage for storage only and for shipment outside of this state are not used in business in this state.'
In the present case, if the subject property is in this state 'for storage only,' it is not subject to the tax, but if it is 'used in business' in Ohio, the tax applies.
In four cases, this court has had this language of the statute before it * and has made determinations as to whether certain items of personal property were held 'for storage only' or were 'used in business.'
The first of those cases is General Cigar Co., Inc. v. Peck, 159 Ohio St. 152, 111 N.E.2d 265, which concerned the application of the tax to certain tobaccos held by the taxpayer and later incorporated by it into manufactured tobacco products subsequently offered for sale. This tobacco was held to be not subject to the tax because it was 'held in a storage warehouse therein for storage only' under the provisions of the statute then in effect. The second case, which specifically followed the General Cigar case, is B. F. Goodrich Co. v. Peck, 161 Ohio St. 202, 118 N.E.2d 525, 527. In that case, as in the General Cigar case, the subject property 'was apparently held by [the taxpayer] for use in its manufacturing operations both in and out of Ohio,' although it is stated in the opinion that the taxpayer 'was holding some of it for sale' and, in the syllabus, mention is made of the fact that the taxpayer might at some subsequent time 'sell it or to use it.' Such possible future sale was not a primary consideration in the case, emphasis being on the observation 'that property is never placed in storage by its owner unless the owner intends to use it in some way later on.' It was concluded that the subject property was held 'for storage only' and thus not subject to the tax.
The third and fourth cases, Grinnell Corp. v. Bowers, 167 Ohio St. 267, 147 N.E.2d 657, ...
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