Summary
In A.J. Weigand, Inc. v. Bowers (1960), 171 Ohio St. 78, 12 O.O. 2d 90, 167 N.E.2d 772, the items under review were used, as here, interchangeably in the rendition of common carrier and contract carrier activities.
Summary of this case from Manfredi Motor Transit Co. v. LimbachOpinion
No. 36323
Decided June 1, 1960.
Taxation — Sales and use taxes — Exceptions — Goods purchased used in contract carrier and public utility service — Primary use — Status not changed by incidental use otherwise — Section 5739.01, Revised Code.
APPEAL from the Board of Tax Appeals.
This case involves sales and use tax assessments. During the audit period in question appellant was engaged in the business of hauling freight by motor vehicles under authority of a contract-carrier permit and also as a common carrier under a certificate of public convenience and necessity. The articles purchased during such period, involving the assessments in question, were tractors, trucks, trailers, repair parts for them, tires, batteries and other necessary items, all used directly in furnishing motor-carrier service. The equipment was used interchangeably for contract-carrier and common-carrier hauling operations. Appellant concedes that during the audit period the greater part of the revenue of appellant was for services rendered by it as a contract carrier and that the greater number of miles traversed by the equipment was in appellant's operation as a contract carrier rather than as a common carrier.
The Tax Commissioner found the purchases to be subject to the sales and use taxes and made assessments plus a penalty contingent on the date of payment.
The Board of Tax Appeals, on appeal, finding that appellant was principally engaged in operating as a contract carrier and that it was not entitled to exception from taxes on the purchases involved, affirmed the order of the Tax Commissioner.
An appeal from the decision of the Board of Tax Appeals brings the cause to this court for review.
Messrs. Sanborn, Teichmoeller Brandon, for appellant.
Mr. Mark McElroy, attorney general, Mr. Joseph D. Karam and Mr. Alvin C. Vinopal, for appellee.
The question presented is whether the dual operation engaged in by appellant entitled it to exception from sales and use taxes on purchases of equipment and materials used in both common-carrier and contract-carrier service. Appellant contends that it is serving the public; that the purchases were made for use in directly rendering a public-utility service; and that, as a holder of a certificate of public convenience and necessity, it is a motor transportation company and hence a public utility and entitled to exception from payment of the sales and use taxes under Section 5739.01, Revised Code, which provides in part:
"(E) `Retail sale' and `sales at retail' include all sales except those in which the purpose of the consumer is:
"* * *
"(2) * * * to use or consume the thing transferred * * * directly in the rendition of a public-utility service * * *."
This court is not in accord with appellant's contention. Appellant is a dually empowered trucking company, engaged as a common carrier in public-utility service and also in private-contract freight haulage, and the goods purchased were used interchangeably for excepted and nonexcepted purposes, predominately for the latter, i.e., contract-carrier haulage. At no time during the audit period did appellant operate exclusively or primarily as a common carrier. The primary use to which the purchased property is put is determinative. An incidental use otherwise will not destroy the status. Mead Corp. v. Glander, Tax Commr., 153 Ohio St. 539.
The decision of the Board of Tax Appeals is affirmed.
Decision affirmed.
WEYGANDT, C.J., ZIMMERMAN, TAFT, MATTHIAS, BELL, HERBERT and PECK, JJ., concur.