Opinion
No. 68-526
Decided July 23, 1969.
Taxation — Listing personal property — Property used in manufacturing — Sorting, grading, washing and packaging fresh fruits and vegetables — Cutting and mixing vegetables for pre-packaged salads — Taxpayer a manufacturer, when.
APPEAL from the Board of Tax Appeals.
Appellant is an Ohio corporation engaged in an operation by which raw fresh fruits and vegetables are sorted, washed, graded and attractively packaged for ultimate retail sale.
In filing its corporation returns of taxable personal property for the years 1965 and 1966, appellant listed certain machinery, equipment, and inventory at 50 per cent of true value as property used in manufacturing, under Sections 5711.16 and 5711.22 of the Revised Code. Upon audit, it was determined that appellant was not a "manufacturer" entitled to the 50 per cent valuation under Section 5711.22, Revised Code, but was subject to assessment on 70 per cent valuation under Section 5711.15 of the Revised Code. Upon review and redetermination pursuant to Section 5711.31, Revised Code, the Tax Commissioner entered a final order adhering to the 70 per cent valuation.
Appellant appealed to the Board of Tax Appeals, which affirmed the Tax Commissioner's order. This appeal is from that decision, pursuant to Section 5717.04, Revised Code.
Messrs. Graydon, Head Ritchey, Mr. Bruce I. Petrie and Mr. Robert S. Marriott, for appellant.
Mr. Paul W. Brown, attorney general, and Mr. Jon A. Ziegler for appellee.
The decision of the Board of Tax Appeals is not unreasonable or unlawful to the extent that it holds that the appellant, which purchases, sorts, inspects, washes, grades and packages fresh fruits and vegetables for resale, is not a "manufacturer," as that term is defined in Section 5711.16, Revised Code, but must list the tangible personal property used in its business at 70 per cent of its true value.
However, to the extent that the appellant controls the ripening of fruits, cuts and mixes vegetables for pre-packaged salads, and employs additives to preserve and protect its packaged products, it is a manufacturer.
To this extent, the decision of the Board of Tax Appeals is unreasonable and unlawful, and is, therefore, reversed, and the cause is remanded to the Board of Tax Appeals for a determination of the amount of personal property which is primarily used for those purposes and is thus entitled to be listed at 50 per cent of its true value.
Decision affirmed in part and reversed in part.
MATTHIAS, O'NEILL, SCHNEIDER, HERBERT and DUNCAN, JJ., concur.
This decision was made after the death of JUSTICE ZIMMERMAN and before the appointment of a successor.
TAFT, C.J., dissents to the extent the judgment affirms the decision of the Board of Tax Appeals.