Accel, Inc. v. Testa

Summary

The Supreme Court of Ohio affirmed the Board of Tax Appeals' decision concerning a consumer-use-tax assessment against Accel, Inc. The court held that Accel's preparation of gift sets could qualify as assembling, despite also involving packaging, and that certain employment-services transactions qualified for the permanent-assignment exemption. The court also rejected the tax commissioner's argument that the Board of Tax Appeals owed deference to the commissioner's factual findings.

Holdings

1. The BTA reviews the Tax Commissioner's determinations de novo as to both facts and law and owes no deference to the Commissioner's factual findings beyond requiring the taxpayer to prove by a preponderance of the evidence that those findings are incorrect.
2. Accel's preparation of gift sets could reasonably be found to involve assembling or assembly under R.C. 5739.02(B)(42)(a) and R.C. 5739.01(R), even though the operations also involved packaging.
3. The BTA reasonably and lawfully found that employees supplied by Resource Staffing were assigned to Accel on a permanent basis under R.C. 5739.01(JJ)(3), notwithstanding the absence of express permanent-assignment language in the overarching employment-services contract.
4. Accel failed to establish that the personnel supplied by Manpower were assigned on a permanent basis, and the BTA did not abuse its discretion in denying the exemption for those transactions.
5. R.C. 5703.58(B) did not bar the assessment because the statute became effective after the Tax Commissioner issued the assessment.
6. Any error in admitting the parties' expert reports or testimony was harmless because the BTA's decision did not rely on that evidence.

Questions Presented

1. Whether the BTA owed deference to the Tax Commissioner's factual findings or instead reviewed those findings de novo.
2. Whether Accel's preparation of gift sets constituted assembling or assembly qualifying for the sales-and-use-tax exemption under R.C. 5739.02(B)(42)(a) and R.C. 5739.01(R), despite also involving packaging.
3. Whether the materials used in Accel's gift sets qualified for exemption under the manufacturing-operation provisions of R.C. 5739.01(S).
4. Whether employment-services transactions involving Resource Staffing employees qualified for the permanent-assignment exemption under R.C. 5739.01(JJ)(3).
5. Whether transactions involving Manpower employees qualified for that exemption.
6. Whether R.C. 5703.58(B) barred the assessment because some tax was due before January 1, 2008.
7. Whether the BTA abused its discretion in admitting or considering the parties' expert testimony and reports.

Disposition

affirmed