Sauder Woodworking Co. v. Limbach, 86-1989

Decision Date17 August 1988
Docket NumberNo. 86-1989,86-1989
Citation38 Ohio St.3d 175,527 N.E.2d 296
PartiesSAUDER WOODWORKING COMPANY, Appellant, v. LIMBACH, Tax Commr., Appellee.
CourtOhio Supreme Court

MOYER, C.J., and HOLMES, DOUGLAS and HERBERT R. BROWN, JJ., concur.

SWEENEY, LOCHER and WRIGHT, JJ., dissent.

WRIGHT, Justice, dissenting.

In my view, the packaging material falls under the "sale-for-resale" exception in R.C. 5739.01(E)(1) and in the direct manufacturing exception in R.C. 5739.01(E)(2).

R.C. 5739.01(E)(1) provides an exception to the sales tax where the purpose of the sale is to "resell the thing transferred * * *." The record indicates appellant's accounting system classified both packaging costs and raw material expenses separately. Although the consumer is not charged for each sale separately, the fact remains that the sales price consists of two charges. Appellee's argument that the sales tax exception does not apply unless the seller includes two separate sales is hypertechnical, and fails to recognize the realities of modern marketing.

I would also find R.C. 5739.01(E)(2) applicable in the case before us. This section provides an exception to the sales tax for the purchase of material used directly in manufacturing or assembling the product. The packaging of the separate component parts was obviously necessary to avoid breakage and destruction. The packaging was a necessary and inherent part of the product. Although I would not find packaging material for...

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6 cases
  • Accel, Inc. v. Testa
    • United States
    • Ohio Supreme Court
    • December 6, 2017
    ...the type of change of form that characterizes manufacturing per se. 2015 WL 44106005 at *4, citing Sauder Woodworking Co. v. Limbach , 38 Ohio St.3d 175, 177, 527 N.E.2d 296 (1988). The BTA also specifically found that Accel's activities did not constitute "packaging." Id. at *3. {¶ 19} Und......
  • House of Lloyd, Inc. v. Director of Revenue, State of Mo.
    • United States
    • Missouri Supreme Court
    • February 25, 1992
    ...sells was complete prior to those items being sorted and placed in the cardboard boxes for shipping. See Sauder Woodworking Co. v. Limbach, 38 Ohio St.3d 175, 527 N.E.2d 296, 297 (1988). Appellant claims that the demonstrator kit is a "product" with its own identity, having a utility and va......
  • State v. Melvin Bonnell
    • United States
    • Ohio Court of Appeals
    • October 5, 1989
  • Walker's Inc. D/B/A Walker's Quality Cleaners v. Farr
    • United States
    • Tennessee Court of Appeals
    • September 7, 2010
    ...or form’ from that in which it originally existed, does not constitute ‘processing.’ ” Id. (citing Sauder Woodworking Co. v. Limbach, 38 Ohio St.3d 175, 527 N.E.2d 296, 297 (1988)). Adopting these principles, the Beare Co. Court concluded that blast freezing food products qualified as “proc......
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