Opinion
No. 36783
Decided April 19, 1961.
`Taxation — Sales tax — Items used or consumed directly in making retail sales — Function of Board of Tax Appeals — Court will not substitute its judgment for that of board — Questions of fact — Decision affirmed where not unreasonable or unlawful.
APPEAL from the Board of Tax Appeals.
White Castle System, Inc., appellee herein, operates a chain of restaurants selling principally hamburgers but also coffee, doughnuts, fish sandwiches and desserts for consumption both on and off the premises where sold. In the operation of its restaurants, it purchases for distribution two kinds of booklets, one of which is called a "cutout booklet." The top of this booklet is cut out in the shape of a castle skyline corresponding to the architecture of appellee's restaurants. This booklet is approximately 3/14 by 5/12 inches and consists of 18 pages containing pictures of hamburgers and of hamburgers being served in various ways, reading matter concerning the reataurants and the food served, and addresses of the various White Castle restaurants for the convenience of transient customers. Copies of this booklet are available, free of charge, at the various restaurants and are sometimes mailed to residents in certain areas, together with a coupon offering a special price on hamburgers.
The other booklet, of the same size and with the same skyline cutout, is a bridge score pad and tally card. The cover bears a picture of a White Castle restaurant and a tray of hamburgers. The inside pages are printed on one side for use as a score pad for a card game, and at the top of each printed page appears the slogan, "Buy 'em by the `Sack.'" This booklet was designed to promote the sale of hamburgers for consumption off the premises by members of bridge clubs and other gatherings. Copies of this booklet are distributed by appellee's district offices where hamburgers can be ordered in quantity lots.
These booklets are distributed by appellee for the purpose of advertising and promoting sales of its food products.
The Tax Commissioner made a sales tax assessment on the purchases, by appellee, of the above-described booklets.
The Board of Tax Appeals, on appeal, held that the purchases of these booklets were excepted from the sales tax on the ground that the booklets were used or consumed "directly in making retail sales," under authority of Section 5739.01, Revised Code, which provides in part:
"As used in Sections 5739.01 to 5739.31, inclusive, of the Revised Code:
"* * *
"(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 making retail sales * * *."
An appeal by the Tax Commissioner from the decision of the Board of Tax Appeals brings the cause to this court for review.
Messrs. Wright, Harlor, Morris, Arnold Glander, for appellee.
Mr. Mark McElroy, attorney general, and Mr. Stewart R. Jaffy, for appellant.
The Board of Tax Appeals, as an administrative appellate board, has, in its decision, applied to the factual situation in this cause certain rules laid down by this court in construing the above-quoted section and has arrived at the conclusion above stated. It is not the function of this court to substitute its judgment for that of the Board of Tax Appeals on such factual issues but only to determine from an examination of the record whether the decision reached by the board is unreasonable or unlawful.
From an examination of the entire record, this court is unable to find that the decision of the Board of Tax Appeals is unreasonable or unlawful. The decision is, therefore, affirmed.
Decision affirmed.
WEYGANDT, C.J., TAFT, MATTHIAS and O'NEILL, JJ., concur.
HERBERT, J., not participating.