RUMPKE CONTAINER SERVICE, INC., ET AL., APPELLANTS, v. ZAINO, TAX COMMR., APPELLEE.
No. 00-2120
Supreme Court of Ohio
February 27, 2002
94 Ohio St.3d 304 | 2002-Ohio-792
Submitted October 30, 2001. Appeal from the Board of Tax Appeals, Nos. 98-M-1254 and 98-M-1257 through 98-M-1264.
Taxation—Sales tax on purchases of trucks, truck parts, and containers that are placed on the trucks for hauling waste materials by company in the business of collecting and transporting waste, refuse, and trash from customers’ commercial, construction, and industrial sites for disposal in its landfills—Exemptions—R.C. 5739.02(B)(32)—Board of Tax Appeals’ denial of applications for refund and reassessment of sales and use taxes from 1988 to 1996 affirmed—Private waste hauling company is not engaged in highway transportation of other’s property for hire.
LUNDBERG STRATTON, J.
{¶ 1} Appellant Rumpke Container Service, Inc. (“Rumpke”) has filed applications for refund and reassessment of sales and use taxes. Additional appellants Rumpke Iron Works, Inc., Marathon Equipment Company, Hershell McIntosh and Gary Patton, d.b.a. Arcanum Container and Repair, Environmental Steel Products, Inc., Miami Valley International Trucks, Inc., Truck & Parts of Tampa, Inc., and Tri-State Ford Truck Sales, Inc., have filed applications on Rumpke’s behalf for refund of the sales and use taxes that Rumpke paid on purchases.
{¶ 2} Rumpke is in the business of collecting and transporting waste, refuse, and trash from customers’ commercial, construction, and industrial sites for disposal in its landfills. The various refund and reassessment applications concern Rumpke’s purchases of trucks, truck parts, and containers that are placed on the trucks for hauling waste materials, during various audit periods from 1988 to 1996.
{¶ 4} The Board of Tax Appeals rejected Rumpke’s applications for refund on the basis that it failed to establish that it held certificates or permits from either the Interstate Commerce Commission or the Public Utilities Commission of Ohio to transport property and, therefore, it was not providing a transportation service for hire.
{¶ 5} This cause is now before the court upon an appeal as of right.
{¶ 6} While both sales and use taxes are at issue, we will discuss only the sales tax provisions because
{¶ 7} Rumpke contends that its purchases of trucks and truck parts are exempt under
{¶ 8}
“(32) The sale, lease, repair, and maintenance of, parts for, or items attached to or incorporated in, motor vehicles that are primarily used for transporting tangible personal property by a person engaged in highway transportation for hire.”
{¶ 9} The term “highway transportation for hire” used in
“(Z) ‘Highway transportation for hire’ means the transportation of personal property belonging to others for consideration by any of the following:
“(1) The holder of a permit or certificate issued by this state or the United States authorizing the holder to engage in transportation of personal property belonging to others for consideration over or on highways, roadways, streets, or any similar public thoroughfare;
“(2) A person who engages in the transportation of personal property belonging to others for consideration over or on highways, roadways, streets, or any similar public thoroughfare but who could not have engaged in such transportation on December 11, 1985, unless the person was the holder of a permit or certificate of the types described in division (Z)(1) of this section;
“(3) A person who leases a motor vehicle to and operates it for a person described by division (Z)(1) or (2) of this section.”
{¶ 10} Rumpke
{¶ 11} The USDOT identification number had its origin in the Motor Carrier Safety Act of 1984. P.L. 98-554, 98 Stat. Part 3, 2829, 2832. Section 206 of the Act directed the United States Secretary of Transportation to issue regulations pertaining to commercial motor vehicle safety. P.L. 98-554, 98 Stat. 2829, 2834. One of the regulations issued by the Federal Highway Administration of the Department of Transportation was
{¶ 12} In discussing the USDOT number in a notice of proposed rulemaking, issued prior to the adoption of the USDOT number requirement in
“The ID number serves to provide positive unique identification of the entity and distinguishes among entities having the same or similar names or trade names. This would be especially beneficial in coordinating violation data generated by State and local government officials. It would serve to authenticate the offender and prevent the violations from being recorded against an innocent carrier.” 52 F.R. 26278, 26283, July 13, 1987.
{¶ 13} In a
{¶ 14} Thus the history and purpose of
{¶ 15} In the alternative, Rumpke contends that the permit it received from the Hamilton County General Health District to collect and haul garbage is a permit issued by the state within the meaning of
{¶ 16} The basis for Rumpke’s contention that the permit it received from the Hamilton County General Health District is a permit issued by the state is our decision in Johnson’s Markets, Inc. v. New Carlisle Dept. of Health (1991), 58 Ohio St.3d 28, 33, 567 N.E.2d 1018, 1023-1024, wherein the court stated: “Health districts, and the boards formed thereunder, are state agencies.” Thus, Rumpke concludes that since it has a permit from a state agency, it has met the requirements of
“The public utilities commission shall: “(A) Supervise and regulate each motor transportation company;
“* * *
“(H) Supervise and regulate motor transportation companies in all other matters affecting the relationship between such companies and the public to the exclusion of all local authorities, except as provided in this section and
section 4921.05 of the Revised Code [relating to passengers].”
{¶ 17} A board of health of a city or general health district may “provide for the inspection and abatement of nuisances dangerous to public health or comfort, and may take such steps as are necessary to protect the public health and to prevent disease.”
{¶ 18} While Inland Refuse Transfer Co. v. Limbach (1990), 53 Ohio St.3d 10, 558 N.E.2d 42, considered only statutes prior to the change in the law that enacted the present
{¶ 19} Even if Rumpke were deemed to have a permit or certificate within the meaning of
{¶ 20} In Interstate Commerce Comm. v. Browning-Ferris Industries, Inc. (N.D.Ala.1981), 529 F.Supp. 287, Browning-Ferris was transporting waste between states and the Interstate Commerce Commission (“ICC”) claimed jurisdiction. A federal statute gave the ICC jurisdiction over the interstate transportation of “property” by motor carrier. The question presented to the court was whether the waste being transported was “property.” As in the tax statute under consideration here, the Interstate Commerce Act did not define the term “property.” After reviewing past decisions of the ICC, the court determined that waste was not property within the meaning of the ICC regulations. The ICC cases that had held waste not to be property explained that the persons who were getting rid of the waste were not concerned with any beneficial ownership and they did not select the destination to which it was taken. In another case relied on by the court in Browning-Ferris, the ICC stated that waste possessed a negative property value and, therefore, excluded waste with no recycling potential from being classified as “property.”
{¶ 21} The evidence in this case established that the waste goes to a landfill and is not recycled. Rumpke’s customers are not given any documentation showing where the waste is being taken. A witness from the Ohio Environmental Protection Agency testified that a generator of solid waste, distinguished from hazardous waste or infectious waste, has no ongoing environmental liability once the solid waste is picked up by the hauler. In addition, the Public Utilities Commission of Ohio has stated in Ohio Adm.Code 4901-5-30(A)(2) that “ ‘[w]aste’ is not included in the term ‘property’ as used in Chapter 4921. and 4923. of the Revised Code when defining transportation for hire subject to regulation by the commission.” Therefore, the issue of the definition of “waste” has already been resolved by both case law and Administrative Code definition, to which we must give deference.
{¶ 22} After reviewing the foregoing we believe that the waste being transported by Rumpke is not “personal property belonging to others” within the meaning of
{¶ 23}
Decision affirmed.
MOYER, C.J., DOUGLAS and RESNICK, JJ., concur.
PFEIFER, J., concurs in judgment only.
COOK, J., concurs in judgment.
F.E. SWEENEY, J., dissents and would reverse the decision of the Board of Tax Appeals.
PFEIFER, J., concurring in judgment only.
{¶ 24} I concur in the majority’s determination that Rumpke does not have a permit or certificate within the meaning of
{¶ 25} Common sense suggests that the same property that exposes you to liability if a pile of it falls on someone walking past your house does not cease to be property simply because a waste disposal company picks it up. If it did, incriminating evidence, e.g., documents, shredded or otherwise, could be too easily discarded.
{¶ 26} Waste does not cease to exist when it is picked up by a waste disposal company. It remains the responsibility of the person discarding it, whether hazardous, infectious, or not; therefore, it retains its nature as property.
{¶ 27} Accordingly, I concur in judgment only.
Taft, Stettinius & Hollister, L.L.P., and Stephen M. Nechemias, for appellants.
Betty D. Montgomery, Attorney General, and Barton A. Hubbard, Assistant Attorney General, for appellee.