Summary
In Abex the court found, at page 17, that "the notice of appeal clearly specifie[d] the actions and findings of the Tax Commissioner the appellant questions * * *."
Summary of this case from Mid American Machine Tools, Inc. v. LindleyOpinion
No. 73-122
Decided June 27, 1973.
Appeal — From Tax Commissioner to Board of Tax Appeals — Procedure — R.C. 5717.02 — Notice — Specification of errors complained of — Sufficient compliance, when — Taxation.
APPEAL from the Board of Tax Appeals.
Appellant is a diversified manufacturing company, with operations in several Ohio counties. In its inter-county corporation personal property tax returns for 1968 and 1969, appellant used the following procedure to determine the true value of its personal property.
First, the book cost of each item was segregated according to year of acquisition. Second, the book cost (adjusted by a "true-value claim") was depreciated at a rate of five percent for all assets acquired new and at a rate of ten percent for all assets acquired used. No equipment was depreciated below 20 percent of its cost. This procedure is known as the "302 computation."
The appellee revised this 302 computation by applying a five percent depreciation rate for all machinery and equipment, including that acquired used, and, on November 1, 1971, issued final assessments reflecting these revisions.
On December 1, 1971, appellant filed the following letter with the Board of Tax Appeals, which docketed the letter as a notice of appeal:
"We are in receipt of your notices (18) dated November 1, 1971 (copies attached), wherein an increase in the assessed valuations has been indicated for our properties located within Ohio for the taxation years 1968 and 1969. These increased assessments are predicated upon the application of an annual depreciation rate of 5% for machinery and equipment as set forth by the commissioner in his true value computation. On this basis the useful life would extend over a twenty year period.
"Respectfully, we protest this increase and request that the commissioner's findings be reviewed so as to take into account the detailed study compiled by the taxpayer and previously submitted to the state of Ohio, Department of Taxation. This historical study covering the ten year period from 1960 to 1970 conclusively demonstrates by use of a detailed analysis, the actual expected useful life of machinery and equipment used by the taxpayer in Ohio.
"The following conclusions may be drawn from this study:
"a) A total value — cost per book — of $2.6 million have been disposed by these divisions during these ten years.
"b) The approximate average age at time of disposal for this machinery and equipment was for the following divisions: Denison — 7.8 years and Engineered Products — 7.6 years.
"The reasons for this high turnover and short life of our equipment, as shown by this study, is primarily due to the special equipment used in our production. Letters from our works managers with a catalogue of our products and photographs of our equipment have also been previously submitted to the Department of Taxation.
"In view of the above and the previously submitted documentation, Abex Corporation petitions the board that an increased rate of depreciation be applied and that the additional assessments as proposed by the commissioner be recinded [ sic]." That letter was signed by appellant's vice president and comptroller, who was not an attorney.
The Board of Tax Appeals conducted a hearing regarding the matter on May 25, 1972, at which appellant presented evidence in support of its position. Appellee called no witnesses.
The Board of Tax Appeals dismissed the appeal by entry dated January 11, 1973, "as of its own motion," finding "that it is without jurisdiction to hear this purported appeal."
Further facts necessary to the decision of this cause are discussed in the opinion.
Messrs. Alexander, Ebinger, Holschuh, Fisher McAlister, Mr. Lloyd E. Fisher, Jr., and Mr. Thomas P. Michael, for appellant.
Mr. William J. Brown, attorney general, and Mr. Dwight C. Pettay, Jr., for appellee.
The basis for the dismissal by the Board of Tax Appeals was that the December 1, 1971, letter failed to comply with the mandatory requirements of R.C. 5717.02; and that, therefore, the board lacked jurisdiction of the matter. The board found that:
"* * * an appellant must strictly pursue its [R.C. 5717.02] mandatory requirements if he would confer jurisdiction upon the Board of Tax Appeals to review his cause; among which is that he `shall * * * specify the error or errors therein complained of' in his notice of appeal."
The board further noted that it "* * * has consistently disregarded all errors set forth in argument and briefs save and except such error or errors as are specified in the notice of appeal." The board then found that "the appellant is now interjecting other later claimed errors which are not complained of in their notice of appeal to this board, and held decisive of the cause then under review."
In support of its dismissal, the board quotes from two decisions by this court which required that notices of appeal to the board must specify the errors complained of. American Restaurant Lunch Co. v. Glander (1946), 147 Ohio St. 147; Queen City Valves v. Peck (1954), 161 Ohio St. 579.
While the majority of this court agrees that the notice of appeal must specify the errors complained of, that majority is of the view that appellant has sufficiently complied with that requirement.
The primary issue which appellant sought to bring before the Board of Tax Appeals was whether the appellee applied the correct rate in depreciating equipment acquired used. In this connection, it is noted that appellant's letter apprised the board and the appellee that appellant protested the increased valuation of its property predicated upon the application of an annual depreciation rate of five percent. Furthermore, the last paragraph of that letter indicated the relief sought — a rescission of the appellee's additional assessment.
In determining whether those averments are specific complaints of error, this court looks to American Restaurant Lunch Co. and Queen City Valves, supra.
In American Restaurant Lunch Co., the notice merely alleged that "* * * the decision of the Tax Commissioner is contrary to law; that it is unreasonable and unlawful; that it is not sustained by the evidence and is contrary to the evidence and that the said decision is against the weight of the evidence; that the assessment fixed by the Tax Commissioner is excessive, contrary to law and the evidence."
While that notice of appeal certainly advanced a substantial number of legal propositions, it in no way indicated what actions or findings of the Tax Commissioner were contrary to law or contrary to the evidence.
The notice of appeal in Queen City Valves was similarly phrased. That is, it essentially alleged that the Tax Commissioner's findings were unlawful and against the weight of the evidence, without in any manner indicating specifically what actions were unlawful or what findings were against the weight of the evidence. See, also, Lawson Milk Co. v. Bowers (1961), 171 Ohio St. 418; Richter Transfer Co. v. Bowers (1962), 174 Ohio St. 113.
Here, the notice of appeal clearly specifies the actions and findings of the Tax Commissioner the appellant questions, which actions and findings involved application of a five percent depreciation rate to certain property. Although the letter does not state that the appellee's findings were "contrary to law," or "against the weight of the evidence," the second paragraph is, in effect, an assertion that the appellee's findings were against the weight of the evidence.
As Zimmerman, J., noted in Queen City Valves: "This court has no disposition to be hypertechnical and to deny the right of appeal on captious grounds * * *." Although appellant's letter could certainly have been more aptly phrased, the majority of this court believes that it constituted a sufficient notice of appeal to meet the requirements of R.C. 5717.02.
For the foregoing reasons, this court holds that the dismissal of appellant's appeal was unreasonable and unlawful. The decision of the Board of Tax Appeals, dismissing appellant's appeal, is reversed and the cause is remanded to that board for a decision upon the merits.
Decision reversed.
O'NEILL, C.J., STERN, CELEBREZZE, W. BROWN and P. BROWN, JJ., concur.
HERBERT and CORRIGAN, JJ., dissent.