The function of this court is to review the board’s decision to determine if it is reasonable and lawful. See Citizens Financial Corp. v. Porterfield (1971),
Since two distinct appeals are submitted for review, we will treat eаch separately.
I.
In case No. 76-1266, the taxpayer contends that its purchases of “point of sale supplies” are not subjected to the state excise tax on retail sales for the reason that such purchases are statutorily excepted from the definition of retail sales.
Determination of this issue requires an analysis of the statutory definition of “retail sale” and the lеgislated exceptions thereto. R. C. 5739.01 reads, in pertinent part:
“(E) ‘Retail sale’ and ‘sales at retail’ include all sales except those in which the purpose of the consumer is:
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“(2) * * * [T]o use or consume the thing transferred * * directly in making retail sales * * ■
The phrase “making retail sales” was defined by the General Assembly in R. C. 5739.01 (P), which became effective September 1,1967.
“(P) ‘Making retail sales’ means the effecting of transactions wherein one party is obligated to pay the price and the other party is obligated to transfer title to or possession of the item sold, but it does not include, the delivery of items thereafter nor the preliminary acts of promoting or soliciting thе retail sales.” (Emphasis added.)
Rule TX-15-11, Rules of the Tax Commissioner, was changed in 1967 to read, in part, as follows:
“Tangible personal property which is to be used or*189 consumed directly in making retail sales'mаy, when purchased by a person engaged in maldng retail sales, be purchased under a claim of exemption. Articles subject to such claim include show cases, equipment and shelves used to display merchandise for sale'; store furniture and fixtures ; supplies and equipment used in consummating retail sales; аnd equipment for use or consumption in storing or preserving goods and merchandise in the sales area.” (Emphasis added.)
Whether an item of tangible personal property is used to promote or solicit, as opposed to consummate, retail sаles is a question of fact to be decided by the board.' The board concluded that “it appears clear that the matеrials in issue have a primary use in the promoting or soliciting of retail sales.”
R. C. 5739.01 was amended, effective November 21, 1973, to read аs follows:
“(P) ‘Making retail sales’ means the effecting of transactions wherein one party is obligated to pay the price and the other party is obligated to transfer title to or possession of the item sold, but it does not include the delivery of items thereafter nor the preliminary acts of promoting or soliciting the retail sales, other than the distributing of printed matter which displays or desсribes and prices the item offered for sale.” (Emphasis denotes added language.)'
The commissioner asserts that this change conclusively demonstrates that printed mattеr which displays or describes and prices an item for sale is, in fact, material used in the preliminary acts of promoting or soliсiting retail sales. Otherwise, there would have been ho need for the amendment. Unfortunately for the taxpayer, this amendment to It. C. 5739.01 (P) did nоt become effective until well subsequent to> the audit period. The board determined that the “point of sale supplies” were subject to sales taxes because they were used to promote or solicit retail sales, and thus not excepted under the provisions of R. C. 5739.01(E) and (P), then in effect.
Upon examination of the record before the board, we conclude that this detеrmination by the board is not un
n.
In case No. 76-1272, the commissioner appeals the portion of the board’s decision that the taxрayer’s purchases of paper used to make mailing labels together with parts for the necessary machinery are nоt subject to the excise tax on retail sales.
This review concerns the scope and interpretation of E. C. 5739.02(B) (15)
“The tax does not apply to the following:
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“(15) Sales to рersons engaged in any of the activities mentioned in division (E) (2) of Section 5739.01 of the Eevised Code, of packages, including material and parts therefor, and of machinery, equipment, and material for use in packaging tangible personal property рroduced for sale, or sold at retail. Packages include bags, baskets, cartons, crates, boxes, cans, bottles, bindings, wrapрings, and other similar devices and containers, and ‘packaging’ means placing therein.”
In construing this subdivision, we must consider that a presumption exists that every sale or use of tangible personal property in this state is taxable. Moreover, “laws relating to exemption from taxation are to be strictly construed, and one claiming exemption must affirmatively establish his right thereto.” National Tube Co. v. Glander (1952),
In Emery Industries v. Kosydar (1975),
The commissioner argues that the mailing labels and machinery do not meet the statutory definition of “package” and thus may not be excepted under R. C. 5739.02(B) (15), and cites Customer Beverage Packers v. Kosydar (1973),
Cases concerning this packaging exception must be decided on their individual facts. As we stated in Cole National, supra, at page 338: “Although Custom Beverage Packers [supra] sets forth an essential characteristic of a package, it does not provide the sole criterion for making such a determination. * * * In fact, we limited Custom Beverage Packers to its facts * *
Upon careful examination of the record, we find that the board’s detеrmination was reasonable and lawful. There was sufficient probative evidence for the board to conclude that the рurchase of paper used for mailing labels and the purchase of parts or equipment for machinery used to produce mailing labels are excepted from taxation pursuant to R. C. 5739.02(B) (15).
Therefore, the decision of the board is affirmed.
Decision affirmed.
Present R. C. 5739.02(B) (15) was numbered R. C. 5789.02(B) (16) during the audit period.