Opinion
NO. 29058
Decided July 22, 1942.
Taxation — Valuation of machinery and equipment — Assessment by Tax Commissioner affirmed by Board of Tax Appeals — Appeal to Supreme Court — Section 5611-9, General Code — Review upon record before Board of Tax Appeals — Consisting of record of proceedings and evidence before Tax Commissioner — Decision of Board of Tax Appeals not unlawful or unreasonable.
APPEAL from the Board of Tax Appeals.
This is an appeal from the decision of the Board of Tax Appeals wherein it affirmed the 1939 assessment of the appellant's property for taxation as made by the state Tax Commissioner.
The appellant corporation for several years has been engaged in manufacturing certain prophylactic products. In filing its return of taxable property as of January 1, 1939, it listed the book value of all its machinery and equipment in Schedule 2 of the return at $129,772. The only question involved in this case arises out of the valuation of its machine known as "Machine No. 5."
Two machines used in such process having become obsolete and inefficient, an experienced and qualified engineer was engaged to design and construct a new machine. Such machines could not be procured on the market, but must be specially designed and built. Operation of the plant was suspended pending the construction of such machine, actual work upon which was commenced in the spring of 1938, and on January 1, 1939, it was 87.6 per cent completed. To that date there had been charged to such machine on the company's books the sum of $88,398.43. The books disclosed an item of accumulated engineering charges in the sum of $6,964.02, most of which was due the engineer for work on the machine in question. The balance of the sum of $129,772 listed by the taxpayer as machinery and equipment under Schedule 2 represented other machinery and equipment belonging to the appellant not now in controversy. The machine in question was completed and put in operation in April 1939.
With its 1939 return, appellant filed a claim for deduction from depreciated book value of its personal property, Form 902. The Tax Commissioner reduced the valuation of appellant's equipment and machinery to $94,568, being a reduction of $35,154.
Plaintiff appealed to the Board of Tax Appeals and evidence was taken, and a record made before an examiner for the Board of Tax Appeals. Upon consideration of this record in an entry filed January 29, 1942, the Board of Tax Appeals found "that on May 9, 1940, the Tax Commissioner made an assessment against appellant for the year 1939 on a basis of a true value of its machinery and equipment of $94,568; that the appellant in filing its return for said year listed the book value of said machinery and equipment at $129,722 and filed a claim therewith for deduction from said book value in the amount of $72,696, of which amount the Tax Commissioner allowed $35,154. The board further finds that appellant is not entitled to any further deduction than that allowed by the Tax Commissioner.
"It is, therefore, ordered that the assessment heretofore made against appellant by the Tax Commissioner be and the same hereby is affirmed."
This case is before this court on appeal from the decision of the Board of Tax Appeals. Pursuant to the requirements of Section 5611-2, General Code, C.L. Bowers, auditor of Summit county, was made an appellee in the proceedings in this court.
Messrs. Gottwald, Hershey Hatch, for appellant.
Mr. Thomas J. Herbert, attorney general, and Mr. Aubrey A. Wendt, for appellee, William S. Evatt, tax commissioner.
Mr. Alva J. Russell, prosecuting attorney, for appellee, C.L. Bowers, auditor.
This case is before this court upon the record of the proceedings before the Board of Tax Appeals, and upon the evidence considered by it upon an appeal from the decision of the Tax Commissioner. From this record and this evidence it is the duty of this court, under Section 5611-2, General Code, to determine whether the decision of the Board of Tax Appeals was reasonable and lawful, or unreasonable or unlawful.
The record of the proceedings of the Board of Tax Appeals constitutes the basis for review in this court. An examination of this record discloses that it consists of the record of the proceedings before the Tax Commissioner, and the testimony of various witnesses on behalf of the taxpayer. The record as certified to the Board of Tax Appeals by the Tax Commissioner consisted of the tax reports filed by the appellant, and other miscellaneous departmental reports; also a typewritten but unsigned "report on field investigation or appraisal" which contained a recommended valuation fixed at $94,568, which valuation had been adopted by the Tax Commissioner.
It is provided in Section 5611, General Code, as follows:
"The Board of Tax Appeals may order the appeal to be heard upon the record and the evidence certified to it by the Tax Commissioner, but upon application of any interested party shall order the hearing of additional evidence; and it may make, or cause to be made, such investigation with respect to the apppeal as it may deem proper."
Section 5611-1, General Code, provides that:
"The decisions of the Board of Tax Appeals may affirm, reverse, vacate or modify the tax assessments, valuations, determinations, findings, computations or orders complained of in the appeals or applications determined by it and its decision shall become final and conclusive for the current year, unless reversed, vacated, or modified as in Section 5611-2 of the General Code of Ohio provided."
Under these sections the record certified to the Board of Tax Appeals is given full importance as if this evidence had been heard anew. There being evidence, therefore, to support the decision of the Board of Tax Appeals, the decision is neither unlawful nor unreasonable, and is therefore affirmed.
Decision affirmed.
WEYGANDT, C.J., TURNER, WILLIAMS, HART and ZIMMERMAN, JJ., concur.
BETTMAN, J., not participating.