Ohio Stove Co. v. Bowers

• Decision Date: 08 February 1961
• Citation: Ohio Stove Co. v. Bowers, 171 Ohio St. 484, 172 N.E.2d 295 (Ohio 1961)
• Parties: , 14 O.O.2d 381 OHIO STOVE CO., Appellant, v. BOWERS, Tax Com'r, Appellee.
• Court: Ohio Supreme Court

Page 484

171 Ohio St. 484

172 N.E.2d 295, 14 O.O.2d 381

OHIO STOVE CO., Appellant, v.BOWERS, Tax Com'r, Appellee.

Supreme Court of Ohio.

Feb. 8, 1961.

Bricker, Evatt, Barton, Eckler & Niehoff, Columbus, for appellant.

Mark McElroy, Atty. Gen. and John J. Dilenschneider, Columbus, for appellee.

PER CURIAM.

This is an appeal from a decision of the Board of Tax Appeals affirming a sales and use tax assessment made by the Tax Commissioner upon the sale and use of certain property of appellant, the Ohio Stove Company.

The appellant is an Ohio corporation engaged in the manufacture and sale of gray iron castings.In the manufacturing process appellant uses sand molds and cores to form the castings.These molds and cores cannot be purchased on the open market and are, therefore, made by appellant on the manufacturing premises.They are so constituted that, after they are made, the molds must be used within 12 hours and the cores within two months.Such molds and cores can be used only once and after such use are destroyed, and the sand is reconditioned and used in forming new molds.

The Tax Commissioner assessed taxes on the sale and use of the machinery used by appellant to manufacture these molds and cores.

It is urged by appellant that the machinery used to manufacture the molds and cores is used directly in the production of the castings.In other words, appellant urges that the manufacture of the molds and cores is a part of the manufacture of the castings.

The test for determining whether tangible personal property is used or consumed directly in the production of tangible personal property for sale so as to have its sale or use excepted from taxation is set forth, as follows, in the syllabus of Youngstown Building Material & Fuel Co. v. Bowers, 167 Ohio St. 363, 149 N.E.2d 1:

'In determining whether tangible personal property is used or consumed directly in the production of tangible personal property for sale by manufacturing or processing, and, therefore, whether its sale or use is excepted from taxation under the provisions of subdivision (E)(2) of Section 5739.01, or subdivision (C)(2) of Section 5741.01, Revised Code, the test is not whether such property is essential to the operation of an 'integrated plant,' the test to be applied being, when does the actual manufacturing or processing activity begin and end, and is the property used or consumed during and in the manufacturing or processing period.'

Thus, the test is not whether the property is essential to the operation of the plant, but whether it is an actual part of the process of manufacture.

There is no question that the molds themselves are a part of the process of manufacturing the castings.However, to determine whether the sale or use of machinery which makes such molds is excepted from the tax, we must look to the nature of appellant's business and the product which appellant manufactures for sale.

Appellant is in the business of manufacturing gray iron castings for sale, not sand molds or cores.Although the molds and cores themselves are used directly in the process of manufacturing the castings, the manufacture of the molds and cores is not a part of the process of manufacturing the castings.However essential the machinery which makes such sand molds and...