Rowitz v. McClain
| Decision Date | 31 December 2019 |
| Docket Number | No. 18AP-193, No. 18AP-192, No. 18AP-194,No. 18AP-191,18AP-191 |
| Parties | Stephanie ROWITZ, Appellant-Appellant, v. [Jeff MCCLAIN], Tax Commissioner of Ohio, Appellee-Appellee. Jamie Weisbarth, Appellant-Appellant, v. [Jeff McClain], Tax Commissioner of Ohio, Appellee-Appellee. Madison Weisbarth, Appellant-Appellant, v. [Jeff McClain], Tax Commissioner of Ohio, Appellee-Appellee. McKenna Weisbarth, Appellant-Appellant, v. [Jeff McClain], Tax Commissioner of Ohio, Appellee-Appellee. |
| Court | Ohio Court of Appeals |
DECISION
BEATTY BLUNT, J.
{¶ 1} Appellants in this consolidated action appeal a decision from the Ohio Board of Tax Appeals ("BTA") affirming the Tax Commissioner's decision denying their applications for a refund of sales taxes they paid for purchasing feminine hygiene products.
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} Appellants Stephanie Rowitz, McKenna Weisbarth, Madison Weisbarth, and Jamie Weisbarth filed applications for refunds of sales tax they paid for feminine hygiene products, such as tampons and menstrual pads, to appellee Ohio Tax Commissioner Jeff McClain ("Commissioner") on May 20, 2016. They included receipts for each of their purchases with their applications.
{¶ 3} Their claims for refunds were denied. In the denial letter, the Ohio Department of Taxation found that "[a] thorough review of R.C. 5739.02 reveals that there is not an applicable exemption." (July 22, 2016 Letter.)
{¶ 4} Appellants filed an appeal with the Commissioner on August 9, 2016. Appellants submitted a letter from Dr. Edwina Simmons, who purported to provide an expert opinion. In that letter, Dr. Simmons stated "[m]enstrual products are not a Luxury for women and [t]herefore do not qualify for a Luxury Tax." (Attachment to Appellants' October 27, 2016 letter.) Dr. Simmons said that feminine hygiene products are necessary to protect furniture, floors, and clothing from blood-borne illnesses.
{¶ 5} The Commissioner issued his final determination and denied the applications on December 16, 2016. In his decision, the Commissioner found the Department of Taxation is "without power to exercise any jurisdiction beyond that conferred by statute" such that he could not address appellants' constitutional arguments. Addressing the taxability of feminine hygiene products solely under Ohio's statutory scheme, the Commissioner found that feminine hygiene products do not fit within the definition of a drug, prosthetic device, durable medical equipment, or mobility enhancing equipment.1 The Commissioner determined the products are not "drugs" because they "are not compounds or substances." (Dec. 16, 2016 Final Determination at 4.) They are not "durable medical equipment" because they "are worn in or on the body." (Dec. 16, 2016 Final Determination at 4.) They are not "prosthetic devices" because "they do not artificially replace a missing portion of the body or prevent or correct a physical deformity or malfunction, or support a weak or deformed portion of the body." (Dec. 16, 2016 Final Determination at 4-5.) Rather, the Commissioner found that "menstruation is a normal bodily function, ‘necessary for continued reproduction and continuation of the human species.’ " (Dec. 16, 2016 Final Determination at 5, quoting unidentified documentation provided by appellants.)
{¶ 6} The Commissioner went on to find that:
[F]eminine menstrual products are not dispensed pursuant to a prescription as required under the exemptions set forth in R.C. 5739.02(B)(18) and (19). Hence, sales of such products cannot be exempt in any case, regardless of whether they meet the definitions of drugs, prosthetic devices, [or] durable medical equipment * * *.
(Dec. 16, 2016 Final Determination at 5.)
{¶ 7} Appellants appealed the Commissioner's decision to the BTA.
{¶ 8} On February 20, 2018, the BTA issued its Decision and Order affirming the Final Determination of the Commissioner. The BTA found that appellants failed to meet their burden to show they are entitled to an exemption. Specifically, "the provisions in R.C. 5739.01(FFF) through (JJJ) relate to an exemption in R.C. 5739.02(B)(18)-(19) for items meeting such definitions that are provided under a prescription." (Feb. 20, 2018 Decision at 2.)
{¶ 9} Appellants appealed this decision.2 In addition to appealing the BTA's determination that the products are not exempt from taxation under Ohio law, appellants also raise two constitutional arguments. First, they argue that the taxation of feminine hygiene products violates the federal and state Equal Protection Clauses. Second, they argue that Ohio's sales tax law, to the extent it requires taxation of feminine hygiene products, is preempted by federal law.
II. ASSIGNMENTS OF ERROR
{¶ 10} Appellants submit the following assignments of error:
III. STANDARD OF REVIEW
{¶ 11} In reviewing a decision of the BTA, appellate courts must determine whether the decision is "reasonable and lawful." Accel, Inc. v. Testa , 152 Ohio St.3d 262, 2017-Ohio-8798, 95 N.E.3d 345, ¶ 11, citing Satullo v. Wilkins , 111 Ohio St.3d 399, 2006-Ohio-5856, ¶ 14 ; Witt Co. v. Hamilton Cty. Bd. of Revision , 61 Ohio St.3d 155, 157, 573 N.E.2d 661 (1991) ; Miracit Dev. Corp. v. Zaino , 10th Dist. No. 04AP-322, 2005-Ohio-1021, 2005 WL 564073, ¶ 7. The court may not "substitute its judgment for that of the BTA on factual issues." Miracit Dev. Corp. at ¶ 7, citing Bethesda Healthcare, Inc. v. Wilkins , 101 Ohio St.3d 420, 2004-Ohio-1749, 806 N.E.2d 142, ¶ 18. Rather, the court must affirm the BTA's factual findings " ‘if they are supported by reliable and probative evidence,’ " and the court " ‘afford[s] deference to the BTA's determination of the credibility of witnesses and its weighing of the evidence subject only to an abuse-of-discretion review on appeal.’ " Accel, Inc. at ¶ 16, quoting HealthSouth Corp. v. Testa , 132 Ohio St.3d 55, 2012-Ohio-1871, 969 N.E.2d 232, ¶ 10 ; see also Miracit Dev. Corp. at ¶ 7 (), citing Bethesda Healthcare ; Hawthorn Mellody, Inc. v. Lindley , 65 Ohio St.2d 47, 417 N.E.2d 1257 (1981), syllabus.
{¶ 12} Nonetheless, an appellate court " ‘will not hesitate to reverse a BTA decision that is based on an incorrect legal conclusion.’ " Accel, Inc. at ¶ 11, quoting Satullo at ¶ 14 ; see also Gahanna-Jefferson Local School Dist. Bd. of Edn. v. Zaino , 93 Ohio St.3d 231, 232, 754 N.E.2d 789 (2001). "Thus, legal conclusions are reviewed de novo." Summer Rays, Inc. v. Testa , 10th Dist., 2017-Ohio-7901, 98 N.E.3d 935, ¶ 10, citing Terraza 8, L.L.C. v. Franklin Cty. Bd. of Revision , 150 Ohio St.3d 527, 2017-Ohio-4415, 83 N.E.3d 916, ¶ 7.
IV. LEGAL ANALYSIS
A. Taxation of feminine hygiene products does not violate the Equal Protection Clauses of the United States and Ohio Constitutions—Assignment of Error 1.
{¶ 13} Appellants first argue that taxing feminine hygiene products violates the Equal Protection Clauses of the Ohio and United States Constitution. The BTA correctly determined that it does not have authority to adjudicate constitutional questions. See generally Cleveland Gear Co. v. Limbach , 35 Ohio St.3d 229, 520 N.E.2d 188 (1988), paragraph three of the syllabus ("The question of whether a tax statute is unconstitutional when applied to a particular state of facts must be raised in the notice of appeal to the Board of Tax Appeals, and the Board of Tax Appeals must receive evidence concerning this question if presented, even though the Board of Tax Appeals may not declare the statute unconstitutional."); MCI Telecommunications Corp. v. Limbach , 68 Ohio St.3d 195, 625 N.E.2d 597 (1994) ; S. S. Kresge Co. v. Bowers , 170 Ohio St. 405, 166 N.E.2d 139 (1960), syllabus ("The Board of Tax Appeals of Ohio is an administrative agency and is without jurisdiction to determine the constitutional validity of a statute."). Under R.C. 5717.04,3 appellants properly appealed their decision from the BTA to this court. See also Stines v. Limbach , 61 Ohio App.3d 461, 573 N.E.2d 131 (10th Dist.1988) ; Brown v. Levin , 10th Dist. No. 11AP-349, 2012-Ohio-5768, 2012 WL 6062851, ¶ 22.
{¶ 14} The Fourteenth Amendment to the United States Constitution provides that "[n]o State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws." Similarly, Article I, Section 2 Ohio Constitution states that "Simply stated, the Equal...
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