Opinion
No. 33383
Decided November 4, 1953.
Taxation — Sales and use tax — Sections 5546-1 and 5546-25, General Code — Overhead cranes and equipment — Sale of not excepted, when — Not used directly in processing personal property for sale.
APPEAL from the Board of Tax Appeals.
This cause is here on appeal from a decision of the Board of Tax Appeals assessing sales and use taxes on the purchases by appellant of certain overhead cranes and attachments, replacement parts therefor, overhead rails on which the cranes operate, and a lift truck, used by appellant in the operation of its business of buying scrap iron and steel and sorting, processing, and selling it to steel mills.
This scrap material is purchased by appellant and delivered to its yard by railroad cars and motor trucks. After delivery, some of the scrap requires sorting, cleaning, segregating, torching, cutting, shearing, or compressing. The scrap is lifted from the cars and trucks by the cranes and equipment and transported to various storage piles, according to classification of material. The lighter scrap is transported by the cranes direct from the cars and trucks to shears for trimming to smaller size, or to an hydraulic press for bailing. After classifying, trimming, and bailing, the scrap is then moved by the cranes to stock piles or direct to cars for shipment to steel mills.
It is the contention of appellant that the cranes and equipment involved as thus used are used directly in the production of tangible personal property for sale by processing and the sale thereof to appellant is excepted from taxation, and that the Board of Tax Appeals was in error in not so holding.
Mr. Isadore Topper, Mr. Donald H. Tishman and Messrs. Gould Gould, for appellant.
Mr. C. William O'Neill, attorney general, Mr. Paul Tague, Jr., and Mr. Ralph N. Mahaffey, for appellee.
What constitutes a use or consumption of equipment directly in the production of tangible personal property for sale by processing has been fully discussed and determined in the cases of Tri-State Asphalt Corp. v. Glander, Tax Commr., 152 Ohio St. 497, 90 N.E.2d 366, and Mead Corp. v. Glander, Tax Commr., 153 Ohio St. 539, 93 N.E.2d 19.
The record in the instant case justifies the finding that the principal use of the cranes and equipment in question is to convey the scrap from the cars and trucks, in which it is delivered to appellant's yard, to processing machinery and bins or piles of classified stock and then back to railroad cars for shipment to steel mills after processing and classification. The cranes and equipment not being principally used in the actual processing but being principally used in moving the material before and after processing, this court is of the opinion that the decision of the Board of Tax Appeals is not unreasonable or unlawful, and it should be and, hereby, is affirmed.
Decision affirmed.
WEYGANDT, C.J., MIDDLETON, TAFT, HART, ZIMMERMAN and STEWART, JJ., concur.