Case Title: Kelleys Island Caddy Shack v. Zaino

Citation: 2002-Ohio-4930

Docket Number: 

State: ohio

Court: Ohio Supreme Court

Date: 2002-10-02T00:00:00Z

Document:
[Cite as Kelleys Island Caddy Shack v. Zaino, 96 Ohio St.3d 375, 2002-Ohio-4930.] 
 
 
KELLEYS ISLAND CADDY SHACK, INC., APPELLANT, v. ZAINO, TAX COMMR., 
APPELLEE. 
[Cite as Kelleys Island Caddy Shack, Inc. v. Zaino, 96 Ohio St.3d 375, 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. 
__________________ 
 
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 
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have jurisdiction to 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 
January Term, 2002 
3 
presume it to be constitutional and will not declare it to be unconstitutional unless it 
“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 
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is no person or thing to which the law can be applied.”  State ex rel. Stanton v. 
Powell (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 
January Term, 2002 
5 
islands, its application was limited to a finite number of locations in the state.  That 
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. 
__________________ 
 
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. 
 
Betty D. Montgomery, Attorney General, and James C. Sauer, Assistant 
Attorney General, for appellee. 
__________________