Roxane Laboratories, Inc. v. Tracy

Mar 4, 1996
No. 94-1242
Versions:75 Ohio St. 3d 125
661 N.E.2d 1011

Lead Opinion

Francis E. Sweeney, Sr., J.

In this case, we are asked to construe former R.C. 5733.052(B). This statute provided, in relevant part: “A combination of net income may also be made at the election of any two or more taxpayers each having income, other than dividend or distribution income, from sources within Ohio, provided the ownership or control requirements contained in the preceding division are satisfied and such combination is elected in a timely report which sets forth such information as the commissioner requires. * * * ”1 (Emphasis added.) (140 Ohio Laws, Part I, 2635.)

The issue before this court is whether a combined report is deemed timely filed where one of the corporations has complied with all of the franchise tax report deadlines but where the second corporation has not. We hold that compliance with the filing deadlines by one corporation satisfies R.C. 5733.052(B)’s requirement of making an election in a timely report and that such an election is permissible. Since Roxane satisfied the requirements of R.C. 5733.052(A) and (B), and since it filed a timely report, we reverse the decision of the BTA.

In this case, the BTA acknowledged that Roxane complied with all filing deadlines, but nevertheless affirmed the commissioner’s ruling that Roxane’s *127election was invalid. The BTA determined that R.C. 5733.052(B) requires each corporation that elects to combine net income to make its own timely election. Since Henley did not timely file its 1987 franchise tax report, the BTA ruled that this precludes both Henley and Roxane from filing on a combined basis.

We believe that the BTA misconstrued R.C. 5733.052(B) and ignored the plain language of the statute which requires that where taxpayers elect to combine their net income they must do so “in a timely report.” (Emphasis added.) Contrary to BTA’s interpretation, the statute does not state that there must be two timely reports filed in order for there to be a valid combination of net income for franchise tax purposes.

The principles of statutory construction require courts to first look at the specific language contained in the statute, and, if the language is unambiguous, to then apply the clear meaning of the words used. Provident Bank v. Wood (1973), 36 Ohio St.2d 101, 105-106, 65 O.O.2d 296, 298, 304 N.E.2d 378, 381. Furthermore, “[s]trict construction of taxing statutes is required, and any doubt must be resolved in favor of the citizen upon whom or the property upon which the burden is sought to be imposed.” Gulf Oil Corp. v. Kosydar (1975), 44 Ohio St.2d 208, 73 O.O.2d 507, 339 N.E.2d 820, paragraph one of the syllabus.

R.C. 1.42 also provides that “[wjords and phrases shall be read in context and construed according to the rules of grammar and common usage. * * * ” In conformity with this rule, we have previously construed the word “a ” to mean any. State ex rel. Roberts v. Snyder (1948), 149 Ohio St. 333, 336, 37 O.O. 34, 35, 78 N.E.2d 716, 718. Similarly, Black’s Law Dictionary (6 Ed.1990) 1, defines “a” as “one” or “any.” (Emphasis added.) Thus, in applying the rules of statutory construction and in considering the clear meaning of the words as written, we find that the filing of one timely report by only one of the corporate taxpayers satisfies the requirements of R.C. 5733.052(B).

Consequently, Roxane should have been permitted to combine its net income with Henley’s, since Roxane filed a timely report, and its refund claims should have been allowed.

Accordingly, we reverse the decision of the BTA.

Decision reversed.

Douglas, Resnick and Pfeifer, JJ., concur. Moyer, C.J., O’Neill and Cook, JJ., dissent. Joseph E. O’Neill, J., of the Seventh Appellate District, sitting for Wright, J.

Notes

. The BTA apparently found that appellant satisfied the ownership and control requirements of R.C. 5733.052(A). Therefore, this is not at issue in this case.



Dissenting Opinion

Cook, J.,

dissenting. I agree with the BTA’s decision that the plain language of R.C. 5733.052(B) requires that each taxpayer seeking to combine its net income with another taxpayer’s file a timely report setting forth that information. R.C. *1285733.052(B) states that “[a] combination of net income may also be made at the election of any two or more taxpayers * * * in a timely report.” It is undisputed that Henley did not make an election, in a timely report, to combine its net income with that of Roxane. As a result of Henley’s failure to make that election in a timely report, neither it nor Roxane is part of a valid combination. Accordingly, I dissent and would affirm the decision of the BTA.

Moyer, C.J., and O’Neill, J., concur in the foregoing dissenting opinion.