Opinion
No. 36539
Decided December 14, 1960.
Taxation — Sales tax — "Price" construed — Section 5739.01 (H), Revised Code — Sale of motor vehicles — "Delivery and handling" charge — Part of sales price, when.
APPEAL from the Board of Tax Appeals.
This case is here on appeal from a decision of the Board of Tax Appeals affirming a final order of the Tax Commissioner assessing a sales tax plus penalty on sales of motor vehicles by the appellant for the audit period from March 1, 1957, through June 30, 1958.
It appears from the record that appellant was in the business of selling new and used motor vehicles. In selling such vehicles it listed a charge on each invoice rendered to a purchaser of $15 for a new car and $10 for a used car. This charge, designated on the invoice as "D H," was for handling and delivery of the car to the customer, purportedly being such services as adjusting the carburetor, valves and doors, and road testing. No parts were included. The labor covered by the charge was performed before delivery of the car to the purchaser. In computing its sales tax, appellant did not include this "D H" item as a part of the total price paid by a customer for a car. This "D H" charge was not the actual cost for services rendered on a particular car being sold nor was it based on the actual experience of appellant but it was an average computed from the experience of Spitzer dealers throughout the country. The charge was not carried on appellant's records as a labor charge but was kept as a separate item. No sale of a vehicle was made by appellant without this charge.
The Tax Commissioner included this "D H" item as part of the sale price in computing the sales tax.
Messrs. Myers, Horan Ashenbach, for appellant.
Mr. Mark McElroy, attorney general, and Mr. Robert J. Kosydar, for appellee.
The first two sentences of subdivision (H) of Section 5739.01, Revised Code (126 Ohio Laws, 157), then read:
"(H) `Price' means the aggregate value in money of any thing paid * * * by a consumer to a vendor in the complete performance of a retail sale, without any deduction on account of the cost of the property sold, cost of materials used, labor or service cost, interest or discount paid, or allowed after the sale is consummated, or any other expense. Price does not include the consideration received for labor or services used in installing, applying, remodeling, or repairing the property sold if the consideration for such services is separately stated from the consideration received or to be received for the tangible personal property transferred in the retail sale."
Appellant contends that the "D H" charge was for labor only, was separately indicated on all customers invoices, was not carried as a part of the sales price, was not a part of the sales price as defined by Section 5739.01 (H), Revised Code, and should not have been considered in determining the sales tax.
Appellee contends that the appellant was not installing, applying, remodeling or repairing property sold when it performed the services for the "D H" charge but was, prior to selling, merely preparing its merchandise for sale, and nothing more, and that the charge was not a deductible labor charge within the meaning of Section 5739.01 (H), Revised Code. Appellant owned the property when the "D H" service was being performed.
The Board of Tax Appeals concluded that appellant, in its operation of selling new and used cars, was not an installer, applier, remodeler, or repairman and, therefore, was not conducting that particular type of operation which would permit it to calculate sales tax in the manner it did during the audit period in question; that it did not qualify under any one of the exceptions noted in the second sentence of Section 5739.01 (H), Revised Code; and that it could not compute the "price" of its vehicles being sold, under the terms of that sentence, but must compute the "price" on the basis of the provisions of the first sentence of paragraph (H) of that section.
This court cannot say from an examination of the record that the decision of the Board of Tax Appeals is unreasonable or unlawful, and it is, therefore, affirmed.
Decision affirmed.
WEYGANDT, C.J., ZIMMERMAN, TAFT, MATTHIAS, BELL and HERBERT, JJ., concur.
O'NEILL, J., not participating.