The opinion
[This decision has been published in Ohio Official Reports at 96 Ohio St.3d 375.]
KELLEYS ISLAND CADDY SHACK, INC., APPELLANT, v. ZAINO, TAX COMMR.,
APPELLEE.
[Cite as Kelleys Island Caddy Shack, Inc. v. Zaino, 2002-Ohio-4930.]
Taxation—Sales tax—Resort-area tax—R.C. 5739.101 does not violate the
Uniformity Clause, Section 26, Article II of the Ohio Constitution—Tax on
transporting persons or property to or from village of Kellys Island is
constitutional.
(No. 2001-1102—Submitted June 5, 2002—Decided October 2, 2002.)
APPEAL from the Board of Tax Appeals, No. 2000-B-819.
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COOK, J.
{¶1} In Am.Sub.H.B. No. 327, 145 Ohio Laws, Part III, 5409, 5410-5411, the
General Assembly enacted R.C. 5739.101, which permits a municipal corporation or
township to declare itself to be a “resort area” if it meets certain statutory criteria. As
a resort area, the legislative authority of the municipal corporation or township may
levy an excise tax on vendors for the privilege of making sales in, or transporting
persons or property to or from, the municipality or township. R.C. 5739.101(B).
Finding that it met the statutory criteria, the village of Kelleys Island declared itself
to be a resort area and levied the resort-area tax.
{¶2} Appellant, Kelleys Island Caddy Shack, Inc. (“Caddy Shack”), a vendor
in the village of Kelleys Island, paid the resort-area tax and filed a refund request
with the Tax Commissioner under R.C. 5739.104, contending that R.C. 5739.101
violated the Uniformity Clause of Section 26, Article II of the Ohio Constitution. The
Tax Commissioner denied the request for refund, and Caddy Shack appealed to the
BTA. Because the Board of Tax Appeals (“BTA”) does not have jurisdiction to
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declare statutes unconstitutional, it affirmed the Tax Commissioner. See Cleveland
Gear Co. v. Limbach (1988), 35 Ohio St.3d 229, 231, 520 N.E.2d 188.
{¶3} The matter is now before the court upon an appeal as of right.
{¶4} For the reasons that follow we find that R.C. 5739.101 does not violate
Section 26, Article II of the Ohio Constitution.
{¶5} R.C. 5739.101(A) sets forth the following three criteria that must be met
for a municipal corporation or township to declare itself a resort area:
{¶6} “(1) According to statistics published by the federal government based
on data compiled during the most recent decennial census of the United States, at
least sixty-two per cent of total housing units in the municipal corporation or
township are classified as ‘for seasonal, recreational, or occasional use’;
{¶7} “(2) Entertainment and recreational facilities are provided within the
municipal corporation or township that are primarily intended to provide seasonal
leisure time activities for persons other than permanent residents of the municipal
corporation or township;
{¶8} “(3) The municipal corporation or township experiences seasonal peaks
of employment and demand for government services as a direct result of the seasonal
population increase.”
{¶9} According to Caddy Shack, based on the 1990 Census of Population and
Housing issued by the United States Department of Commerce, a total of three
municipalities and townships in Ohio meet the 62 percent seasonal-housing
requirement set forth in R.C. 5739.101(A)(1): the village of Kelleys Island (Erie
County) and the village and the township of Put-in-Bay (Ottawa County).
{¶10} Caddy Shack contends that R.C. 5739.101 violates the Uniformity
Clause of the Ohio Constitution, which requires that “[a]ll laws, of a general nature,
shall have a uniform operation throughout the State * * *.” When we consider the
constitutionality of this or other legislation passed by the General Assembly, we
presume it to be constitutional and will not declare it to be unconstitutional unless it
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“appear[s] beyond a reasonable doubt that the legislation and constitutional
provisions are clearly incompatible.” State ex rel. Dickman v. Defenbacher (1955),
164 Ohio St. 142, 57 O.O. 134, 128 N.E.2d 59, paragraph one of the syllabus.
{¶11} In order to determine the constitutionality of legislation under Section
26, Article II of the Ohio Constitution, we must answer two questions: “(1) whether
the statute is a law of a general or special nature, and (2) whether the statute operates
uniformly throughout the state.” Desenco, Inc. v. Akron (1999), 84 Ohio St.3d 535,
541, 706 N.E.2d 323.
{¶12} The subject matter of R.C. 5739.101 is an excise tax. “Historically, tax
statutes have been viewed by this court to be of a general nature.” State ex rel.
Zupancic v. Limbach (1991), 58 Ohio St.3d 130, 138, 568 N.E.2d 1206; see, also,
State ex rel. Wilson v. Lewis (1906), 74 Ohio St. 403, 78 N.E. 523 (“That taxation as
the subject of legislation is of a general nature is established by a uniform course of
decisions”). Thus, in accordance with well-established precedent, we consider R.C.
5739.101 to be of a general nature.
{¶13} We next determine whether the resort-area tax legislation operates
uniformly throughout the state. We have described the uniformity required by
Section 26, Article II as follows:
{¶14} “This section of the constitution requires that laws of a general nature
shall have not only an operation, but a uniform operation throughout the state. * * *
[T]hat is, [a] law must operate uniformly on the named subject-matter in every part
of the state, and when it does that it complies with this section of the constitution.”
State v. Nelson (1894), 52 Ohio St. 88, 98, 39 N.E. 22.
{¶15} Uniformity does not require that the statute actually have current
application in every county. “If a law is sufficiently general in its terms to
comprehend all localities, persons, and things, it is not defeated and rendered void
because there are certain localities in the state where conditions are such that there is
no person or thing to which the law can be applied.” State ex rel. Stanton v. Powell
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(1924), 109 Ohio St. 383, 386-387, 142 N.E. 401. As we explained in State ex rel.
Wirsch v. Spellmire (1902), 67 Ohio St. 77, 86, 65 N.E. 619, “ ‘[u]niform operation
throughout the state’ means universal operation as to territory; it takes in the whole
state. And, as to persons and things, it means universal operation as to all persons
and things in the same condition or category. When a law is available in every part
of the state as to all persons and things in the same condition or category, it is of
uniform operation throughout the state.”
{¶16} In State ex rel. Zupancic v. Limbach (1991), 58 Ohio St.3d 130, 568
N.E.2d 1206, the statute in question applied a special property-tax distribution
formula to power plants with an initial equipment cost exceeding $1 billion. At the
time, there was only one power plant in the state with equipment costing more than
$1 billion. Nevertheless, we stated that “a statute is deemed to be uniform despite
applying to only one case so long as its terms are uniform and it may apply to cases
similarly situated in the future.” Id. at 138, 568 N.E.2d 1206.
{¶17} Here, although there are only three areas in the state that currently
qualify for resort-area status under R.C. 5739.101(A)(1), there are no limitations or
restrictions to prevent other municipal corporations or townships from qualifying in
the future. The terms of R.C. 5739.101 are uniformly applicable to all qualifying
municipal corporations or townships in the state and to all the vendors therein.
{¶18} The current resort-area tax replaced an “island” tax, Am.Sub.H.B. No.
15, 140 Ohio Laws, Part I, 1461, 1462, which violated Section 26, Article II of the
Ohio Constitution. Put-In-Bay Island Taxing Dist. Auth. v. Colonial, Inc. (1992), 65
Ohio St.3d 449, 605 N.E.2d 21. Caddy Shack would have us decide this case the
same way we decided Put-In-Bay. The statutory scheme at issue in this case,
however, differs from the one at issue in Put-In-Bay.
{¶19} The tax in Put-In-Bay was an excise tax levied on vendors engaged in
making sales on “islands” in Ohio. Because the tax in Put-In-Bay applied only to
islands, its application was limited to a finite number of locations in the state. That
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geographic limitation offended the Uniformity Clause. In contrast to the limited island
legislation in Put-In-Bay, the current resort-area legislation is open-ended. Because it
is possible for any municipality or township throughout the state to become a resort
area in the future, given a sufficient change in circumstances, we cannot say beyond a
reasonable doubt that R.C. 5739.101 is clearly incompatible with Section 26, Article II
of the Ohio Constitution. Accordingly, we hold that the resort-area legislation is
constitutional.
Decision affirmed.
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY and LUNDBERG
STRATTON, JJ., concur.
PFEIFER, J., dissents.
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PFEIFER, J., dissenting.
{¶20} I dissent because I believe that the majority’s decision may be the
first cut in an eventual whittling away of the Uniformity Clause. While we can
conceive of a way that vendors in communities other than Put-in-Bay and Kelleys
Island might some day be subject to the resort tax, the reality is that the vendors on
the islands are the only targets of this tax, just as they were in Put-In-Bay Island
Taxing Dist. Auth. v. Colonial, Inc. (1992), 65 Ohio St.3d 449, 605 N.E.2d 21.
Perhaps the majority believes that this court should have found that the island tax
in Put-In-Bay satisfied the Uniformity Clause, since another ice age might yet
produce another Lake Erie island that would be subject to the tax. It’s conceivable.
{¶21} In my mind, the resort tax is the island tax in different words. The
framers of the Ohio Constitution included the Uniformity Clause for a reason. It
should not be undone by legislation by thesaurus.
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Michael J. Yemc, Jr. and John L. Alden, for appellant.
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Betty D. Montgomery, Attorney General, and James C. Sauer, Assistant
Attorney General, for appellee.
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