2018 Ohio 5207
Ohio2018Background
- Great Lakes Bar Control provides inspection, maintenance, and cleaning services for draft-beer dispensing systems (beer-line maintenance) to remove sediment, bacteria, and clogs.
- Technicians inspect systems, use agitation devices, inject compressed gas, and sometimes flush lines with acid or potassium rinses to disinfect and prevent buildup.
- Ohio Department of Taxation audited Great Lakes (2004–2011) and assessed sales tax, asserting the service was "building maintenance and janitorial service" because it involved cleaning tangible personal property.
- Great Lakes appealed; the Tax Commissioner upheld the assessment, and the Board of Tax Appeals (BTA) reversed, finding cleaning incidental to maintenance and nontaxable.
- The Ohio Supreme Court reviewed whether sanitizing beer lines falls within the statutory definition of taxable "building maintenance and janitorial service."
Issues
| Issue | Plaintiff's Argument (Tax Commissioner) | Defendant's Argument (Great Lakes) | Held |
|---|---|---|---|
| Whether beer-line service is a taxable "building maintenance and janitorial service" under R.C. 5739.01(B)(3)(j) | The service is "cleaning" of tangible personal property located in a building and thus taxable | The service is primarily equipment maintenance; any cleaning is incidental and not within the janitorial meaning | The Court held the service is not a "janitorial" cleaning for sales-tax purposes; BTA decision affirmed |
Key Cases Cited
- Rhodes v. New Philadelphia, 951 N.E.2d 782 (Ohio 2011) (undefined statutory terms are given their plain and ordinary meaning)
- Sharp v. Union Carbide Corp., 525 N.E.2d 1386 (Ohio 1988) (statutory interpretation principles regarding undefined words)
- Max’s of Camden Yards v. A.C. Beverage, 913 A.2d 654 (Md. Ct. Spec. App. 2006) (example noting health risks from unclean beer lines)