The opinion
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Great Lakes Bar Control, Inc. v. Testa, Slip Opinion No. 2018-Ohio-5207.]
NOTICE
This slip opinion is subject to formal revision before it is published in an
advance sheet of the Ohio Official Reports. Readers are requested to
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
South Front Street, Columbus, Ohio 43215, of any typographical or other
formal errors in the opinion, in order that corrections may be made before
the opinion is published.
SLIP OPINION NO. 2018-OHIO-5207
GREAT LAKES BAR CONTROL, INC., APPELLEE, v. TESTA, TAX COMMR.,
APPELLANT.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as Great Lakes Bar Control, Inc. v. Testa, Slip Opinion No.
2018-Ohio-5207.]
Taxation—Sales tax on “building maintenance and janitorial services” under R.C.
5739.01(B)(3)(j)—Appellee’s beer-line service is not a “building
maintenance and janitorial service” within meaning of R.C. 5739.01(II)—
Board of Tax Appeals’ decision reversing tax commissioner’s assessment
affirmed.
(No. 2017-0655—Submitted September 11, 2018—Decided December 27, 2018.)
APPEAL from the Board of Tax Appeals, No. 2016-34.
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SUPREME COURT OF OHIO
DEWINE, J.
{¶ 1} Does the cleaning of beer-tap lines constitute a “building maintenance
and janitorial service”? If the answer is yes, then the service is subject to Ohio’s
sales tax. We conclude, though, that the answer is no—the service is not taxable.
Background
{¶ 2} This case comes to us by way of an appeal by the tax commissioner
from a decision of the Board of Tax Appeals (“BTA”). Great Lakes Bar Control,
Inc., provides services related to selling, installing, and servicing beer-dispensing
systems. Over time, draft-beer systems tend to accumulate sediment such as bacteria
and yeast that can clog lines and taps—and give beer a bad taste. To address this
concern, Great Lakes provides a beer-line maintenance service to remove any
buildup of unwanted sediment and prevent the lines from becoming blocked.
{¶ 3} The beer-line maintenance service is performed by Great Lakes’ draft
technicians. Draft technicians begin with a preliminary inspection to ensure that the
system is functioning properly. The technicians rely in part on an electronic device
that agitates the beer in the lines to prevent it from becoming stagnant. If necessary,
a draft technician injects compressed gas into the system to remove sediment from
the lines. During some visits, a draft technician performs the additional task of
flushing the entire system with an acid or potassium rinse to prevent the growth of
bacteria.
{¶ 4} Following a tax audit for the period from July 1, 2004, through June 30,
2011, the Ohio Department of Taxation determined that the beer-line service
involved “cleaning * * * tangible personal property,” see R.C. 5739.01(II), and was
therefore subject to the sales tax as a “building maintenance and janitorial service”
under R.C. 5739.01(B)(3)(j). Great Lakes had not collected sales tax from its
customers during the audit period and was assessed $102,347.91 for the tax with
interest and a penalty.
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January Term, 2018
{¶ 5} Great Lakes challenged the assessment on the grounds that the beer-
line service does not fit within the statutory definition of a “building maintenance
and janitorial service.” The tax commissioner rejected Great Lakes’ argument, and
Great Lakes appealed to the BTA.
{¶ 6} The BTA reversed the tax commissioner’s decision, concluding that
because Great Lakes’ beer-line service was primarily a maintenance service, any
cleaning was merely incidental to that maintenance and was therefore not subject
to the tax.
Analysis
{¶ 7} The question before us is whether Great Lakes’ beer-line service is
subject to the sales tax. The tax applies to “[a]ll transactions by which * * *
[b]uilding maintenance and janitorial service is or is to be provided.” R.C.
5739.01(B)(3)(j). “Building maintenance and janitorial service” is defined in the
statute as “cleaning the interior or exterior of a building and any tangible personal
property located therein or thereon, including any services incidental to such
cleaning for which no separate charge is made.” R.C. 5739.01(II). Whether the tax
applies to the beer-line service turns on the meaning of “cleaning” within the
statutory provision.
{¶ 8} “Cleaning” is not defined in the statute. When a term is undefined,
we give the term its “plain and ordinary meaning.” Rhodes v. New Philadelphia,
129 Ohio St.3d 304, 2011-Ohio-3279, 951 N.E.2d 782, ¶ 17, citing Sharp v. Union
Carbide Corp., 38 Ohio St.3d 69, 70, 525 N.E.2d 1386 (1988). And when
interpreting the language of a statute, “[w]ords and phrases shall be read in context
and construed according to the rules of grammar and common usage.” R.C. 1.42.
{¶ 9} Evaluating the context in which a word is written is essential to a fair
reading of the text: “The words of a governing text are of paramount concern, and
what they convey, in their context, is what the text means.” (Boldface omitted.)
Scalia & Garner, Reading Law: The Interpretation of Legal Texts 56 (2012); see
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SUPREME COURT OF OHIO
also id. (“words are given meaning by their context”). Rather than limit our
analysis to the “hyperliteral meaning of each word,” we consider the ordinary
meaning of the word as it is used within the surrounding text. Id. at 356.
{¶ 10} Thus, we must consider the ordinary meaning of “cleaning” in the
context of providing a “janitorial service.” We think it plain that the beer-line
service does not fit within the common usage of “cleaning” in the janitorial sense.
Janitorial cleaning services are generally understood to encompass activities such
as washing floors or windows, removing garbage, vacuuming, dusting, and the like.
While that is certainly not an exhaustive list, no one would take the ordinary
meaning of janitorial cleaning to include inspecting and flushing beer-tap lines.
{¶ 11} The dissent argues that because sanitizing beer lines is a manner of
“cleaning” them, see R.C. 5739.01(B)(3)(j), and because the beer lines constitute
“tangible personal property” located in the building, the beer-line service must
necessarily qualify as a “building maintenance and janitorial service” for tax
purposes, see R.C. 5739.01(II). Dissenting opinion at ¶ 17. But that approach
zeroes in on the meaning of each word or phrase in isolation, disregarding the
importance of considering the text as a whole. Such a hyperliteral reading falls flat
because it overlooks the natural connotation of “cleaning” within the framework of
providing a janitorial service.
{¶ 12} Indeed, under the dissent’s interpretation of the statutory language,
a whole swath of obviously nonjanitorial “cleanings” could be brought within the
scope of the janitorial-service tax. Take, for example, a tech-service provider that
specializes in cleaning computer hard drives, a professional data-cleansing service
that scrubs database errors, or a business that dry-cleans clothes. Even a fish-
cleaning house on Lake Erie—whose service involves the “cleaning” (scaling,
gutting) of “tangible personal property” (the fish)—might be considered a janitorial
service.
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January Term, 2018
{¶ 13} We think the more sensible approach is to adhere to the common
meaning of the word as it is used with the surrounding text. Because the beer-line
service does not fit the plain meaning of “cleaning” in the context of providing a
“janitorial service,” Great Lakes can keep the taps flowing sans tax.
Decision affirmed.
KENNEDY, FRENCH, and DEGENARO, JJ., concur.
O’DONNELL, J., concurs in judgment only, and would affirm the decision of
the Board of Tax Appeals for the reasons stated in its decision.
FISCHER, J., concurs in judgment only.
O’CONNOR, C.J., dissents, with an opinion.
_________________
O’CONNOR, C.J., dissenting.
{¶ 14} Appellee, Great Lakes Bar Control, Inc., in its own words, has
described its beer-line service as cleaning. The General Assembly has defined a
taxable “janitorial service” as “cleaning the interior or exterior of a building and
any tangible personal property located therein or thereon.” R.C. 5739.01(II).
Despite the absence of any reason to muddle that definition or confuse the statute’s
plain language, the majority distinguishes Great Lakes’ beer-line service from a
taxable cleaning service as described in the statute.
{¶ 15} The majority concludes that the General Assembly must have meant
the statute to apply to “janitorial cleaning” of a type the majority can imagine,
including “washing floors or windows, removing garbage, vacuuming, dusting, and
the like.” Majority opinion at ¶ 10. The majority relies on the first sentence of R.C.
1.42, which provides the statutory rule of construction that “[w]ords and phrases
shall be read in context and construed according to the rules of grammar and
common usage.” But the second sentence of R.C. 1.42 applies here: “Words and
phrases that have acquired a technical or particular meaning, whether by legislative
definition or otherwise, shall be construed accordingly.” Here, there is a legislative
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SUPREME COURT OF OHIO
definition. So, our task is to determine whether the beer-line service constitutes
“cleaning the interior or exterior of a building and any tangible personal property
located therein or thereon” under R.C. 5739.01(II).
{¶ 16} Great Lakes’ beer-line service meets the statutory definition of
“building maintenance and janitorial service.” The beer-line service is cleaning,
which is essential to the safe operation of the beer lines. See, e.g., Max’s of Camden
Yards v. A.C. Beverage, 172 Md.App. 139, 145, 913 A.2d 654 (2006) (noting that
a complaint had alleged that bar patrons became ill after consuming tainted beer
due to the bar’s negligence in failing to properly maintain and clean its beer lines).
The service involves evacuating sediment and clogs from the lines and flushing the
system to disinfect and inhibit particulate growth. When the service has been
completed, Great Lakes submits an invoice describing the service as “Draft Beer
Line Cleaning” or a “FULL CLEAN” (capitalization sic).
{¶ 17} There is no need for this court to brew confusion with a strained
reading of the facts and plain statutory language here because Great Lakes’ beer-
line service falls within the definition of “building maintenance and janitorial
service” for purposes of R.C. 5739.01(B)(3)(j). Accordingly, I would reverse the
decision of the Board of Tax Appeals and reinstate the final determination of
appellant, the tax commissioner. Therefore, I dissent.
_________________
Michael DeWine, Attorney General, and Daniel G. Kim, Assistant Attorney
General, for appellant.
Buckingham, Doolittle & Burroughs, L.L.C., Steven A. Dimengo, Matthew
R. Duncan, and Richard B. Fry, for appellee.
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