LAKEFRONT LINES, INC., APPELLANT, v. TRACY, TAX COMMR., APPELLEE.
No. 95-1216
SUPREME COURT OF OHIO
June 26, 1996
75 Ohio St.3d 627 | 1996-Ohio-50
Submitted February 1, 1996. APPEAL from the Board of Tax Appeals, Nos. 93-H-1125, 93-H-1126, 94-H-69, 94-H-70, 94-H-71 and 94-H-72.
{¶ 1} Lakefront Lines, Inc., appellant, carries passengers in its charter coach business. The engine that рowers the coach bus also runs an air conditioning compressor that cools the passenger compartment for the comfort оf Lakefront‘s passengers. The compressor is mounted near the engine compartment and is driven by two high-horsepower belts that take pоwer from the binary cylinder or directly from the crankshaft of the coach engine. The air conditioning equipment also acts as a defrostеr because it dehumidifies the vehicle in winter or summer.
{¶ 2} Lakefront purchases fuel to run the buses. Operating the air conditioning equipment increases fuel consumption for the bus. Lakefront also consumes fuel while running its buses at idle. The buses spend considerable time off the road while its passengers are out of the buses visiting tour sites. Lakefront idles the engines to operate the air conditioning equipment to maintain a comfortable temperature for the return of the passengers.
{¶ 3}
{¶ 4} At the BTA, Lakefront presented tests and a study attempting to establish the amount of fuel consumed under typical conditions in operating air conditioning equipment and idling its buses. Lakefront did not present any evidence measuring how much fuel it actually consumed in these two activities during the refund period.
{¶ 5} Nevertheless, the BTA affirmed the commissioner‘s order. First, the BTA ruled that Lakefront had not raised the issue of the exemption of “idling time” in its applications for refund or in its appeals to the BTA. Thus, the BTA declined jurisdiction over this issue.
{¶ 6} Without deciding whether Lakefront could claim exemption for the fuel consumed in air conditioning the buses, the BTA found that Lakefront had not met its burden of proof. The BTA questioned the tests and study Lakefront presented. It concluded that the tests and study only approximated the fuel consumed and did not accurately measure it.
{¶ 7} The cause is now before this court upon an appeal as of right.
Leonard A. Carlson, for appellant.
Betty D. Montgomery, Attorney General, and Janyce C. Katz, Assistant Attorney Generaly, for appellee.
Per Curiam.
{¶ 9} First, as to raising the issue of idling consumption, Lakefront supported some of its applications for refund with calculations that included refund amounts for fuel used while the buses were idling. Furthermore, in paragraphs 11 and 12 of its notices of appeal to the BTA, Lakеfront claims that the commissioner failed to distinguish between fuel used to propel the motor vehicle and fuel used to operate the motor vehicle while stationary. Lakefront thus set forth its claim for refund for idling in its applications and specified the commissioner‘s denial of this as error under
{¶ 10} Next, as to the merits of the exemption,
“Any person who uses any motor vehicle fuеl, on which the tax imposed by section 5735.05 of the Revised Code has been paid, for * * * any purpose other than the propulsion of motor vеhicles upon highways * * * of this state, shall be reimbursed in the amount of the tax so paid on such motor vehicle fuel as provided in this section * * *.”
{¶ 11} Lakefront relies for support on Shafer v. Glander (1950), 153 Ohio St. 483, 41 O.O. 490, 92 N.E.2d 601. In Shafer, the cоurt exempted fuel consumed by highway builders to propel vehicles used to build and repair highways. The
“The use of diesel oil is exempt from the excise tax except where such oil is used for the purpose of generating pоwer for the driving or propulsion of motor vehicles on the public highways.” (Emphasis added.)
{¶ 12} After declaring this refund provision to be an exemption, the Shafer court then aрplied an inappropriate principle in analyzing the exemption. It declared that “[a]ny ambiguity in a law imposing a tax shall be resolved in favor of the taxpayer.” Id., paragraph three of the syllabus.
{¶ 13} However, we apply this interpretive principle when an ambiguous statute defines a subject of taxation. Zalud Oldsmobile, Inc. v. Limbach (1994), 68 Ohio St.3d 516, 628 N.E. 2d 1382. For statutes that exempt items from taxation, the type of statute at issue in Shafer and here, we strictly apply the statute against the exemption. Vought Industries, Inc. v. Tracy (1995), 72 Ohio St.3d 261, 264, 648 N.E. 2d 1364, 1366. “[T]axation is the rule, and exemption is the exception. Since the reduction depends on legislative grace, the statute must clearly exprеss the exemption, Cleveland v. Bd. of Tax Appeals (1950), 153 Ohio St. 97, 99-100, 41 O.O. 176, 178, 91 N.E.2d 480, 482, paragraph one of the syllabus, and a taxpayer must show his entitlement to it, Natl. Tube Co. v. Glander (1952), 157 Ohio St. 407, 47 O.O. 313, 105 N.E.2d 648, paragraph two of the syllabus.” Ares, Inc. v. Limbach (1990), 51 Ohio St.3d 102, 104, 554 N.E.2d 1310, 1312. See, also, Kroger Co. v. Lindley (1978), 56 Ohio St.2d 138, 141, 10 O.O.3d, 319, 320, 382 N.E.2d 1359, 1361, which also calls the
{¶ 14} The Shafer court concluded that the General Assembly, in levying this tax on the use of motor fuel, intended “to distribute the cost of road cоnstruction and repair equitably among those persons using the privilege of driving motor
{¶ 15} While both terms connote, as the Shafer court stated, “forward movement,” id., these terms have more comprehensive meanings. Webster‘s Third New International Dictionary of the English Language (1986) 1820, defines “propulsion” as “2: the action of driving forward or ahead: action or procеss of propelling.”
{¶ 16} This same dictionary defines “propel” as “2: to impel forward or onward: push ahead by imparting motion: give motive powеr to: drive onward.”
{¶ 17} Of particular interest to us is this dictionary‘s definition, id. at 1817, of “drive“: ”vt * * * 2 * * * c: to operate the controls of (a locomotive) or to opеrate the mechanism and controls and direct the course of (as a motor vehicle or speedboat) * * * vi * * * 5 * * * b: to operate and steer a motor vehicle.” (Emphasis added.)
{¶ 18} Thus, these definitions mean morе than providing forward motion to a vehicle. They mean to operate and steer a motor vehicle. Included in operating the buses at issue is running their air conditioning equipment and idling the buses for the comfort of the passengers. Therefore, we hold that
{¶ 19} Accordingly, we affirm the decision of the BTA.
Decision affirmed.
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER AND COOK, JJ., concur.
WRIGHT, J., not participating.