Sauder Woodworking Co. v. Limbach, 86-1989
Decision Date | 17 August 1988 |
Docket Number | No. 86-1989,86-1989 |
Citation | 38 Ohio St.3d 175,527 N.E.2d 296 |
Parties | SAUDER WOODWORKING COMPANY, Appellant, v. LIMBACH, Tax Commr., Appellee. |
Court | Ohio Supreme Court |
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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