Opinion
No. 79-822
Decided January 16, 1980.
Taxation — Severance tax — "Severer," construed.
APPEAL from the Board of Tax Appeals.
The Tax Commissioner, appellant herein, levied an assessment for excise taxes against appellees, Charles R. Young and Surface Mining, Inc., under R.C. 5749.02 as the "severer[s]" of natural resources. Young was assessed $2,581.85, including a penalty and interest, and Surface Mining was assessed $5,293.78, penalty and interest inclusive.
Young is the president and sole shareholder of Surface Mining, Inc.
Appellees extracted coal for the Cravat Coal Co. (hereinafter Cravat) under an agreement pursuant to which Cravat paid a fee to appellees based on the number of tons of coal extracted. Appellees removed whatever earth covered the coal seams located on land either owned or leased by Cravat, extracted the coal from the ground, and then loaded the coal into Cravat-owned trucks. Cravat assigned the areas to be stripped by appellees and had a foreman to supervise the operation. Appellees employed their own employees to do the work and a supervisor to oversee the employees. Cravat held the severance license mandated by R.C. 5749.04 and handled the sale of the coal.
On appeal, the Tax Commissioner's final order assessing the severance tax against appellees was reversed by the Board of Tax Appeals. The board found that appellees were not "severers" within the meaning of R.C. 5749.01(H) and 5749.02, as construed in N G Constr., Inc., v. Lindley (1978), 56 Ohio St.2d 415.
R.C. 5749.01(H) states:
"`Severer' means any person who actually removes the natural resources from the soil or water in this state."
R.C. 5749.02 provides, in relevant part:
"For the purpose of providing revenue with which to meet the environmental management needs of this state and the reclamation of land affected by mining, an excise tax is hereby levied on the privilege of engaging in the severance of natural resources from the soil or water of this state. Such tax shall be imposed upon the severer***."
The cause is now before this court upon an appeal as of right.
Mr. John W. Wheeler, for appellees.
Mr. William J. Brown, attorney general, and Mr. Charles M. Steines, for appellant.
According to statutory requisites, this court's responsibility in an appeal from a decision of the Board of Tax Appeals is to determine if that decision is reasonable and lawful. If so, such decision must be affirmed by this court. R.C. 5717.04. Recently, we were faced with the same responsibility in N. C. Constr. v. Lindley, supra. In that case we determined that the board decision holding N G Construction, Inc., a company remarkably similar in its operation to appellees in the instant cause, liable for the R.C. 5749.02 severance tax was unreasonable.
We held, at page 417, "***that the R F Coal Company, the owner of the coal and contractor for its excavation, is the person who actually severed the coal" for R.C. 5749.02 purposes of imposing the excise tax.
Based on our decision in N G Constr., v. Lindley, the Board of Tax Appeals felt constrained to find appellees not liable for the tax. We are in agreement with the board's determination. N G Constr. is controlling in this matter. The factual pattern in the present case is nearly identical to that in N G Constr. Therefore, this court is of the opinion that the board decision is both reasonable and lawful.
Accordingly, the decision of the Board of Tax Appeals is affirmed.
Decision affirmed.
HERBERT, W. BROWN, SWEENEY, LOCHER and HOLMES, JJ., concur.
CELEBREZZE, C.J., concurs for the reasons stated in his concurring opinion in N G Constr., Inc., v. Lindley (1978), 56 Ohio St.2d 415, 419.
P. BROWN, J., not participating.