Title: Skuratowicz v. Tracy

State: ohio

Issuer: Ohio Supreme Court

Document:

SKURATOWICZ, OFFICER OF MONEX CORPORATION, APPELLANT, v. TRACY, TAX 
COMMR., APPELLEE. 
[Cite as Skuratowicz v. Tracy (1997), 80 Ohio St.3d 52.] 
Taxation — Sales tax — President and majority shareholder of corporation 
personally liable for sales tax assessments, when — R.C. 5739.33, applied. 
(No. 96-2751 — Submitted July 22, 1997 — Decided October 8, 1997.) 
APPEAL from the Board of Tax Appeals, No. 94-T-1510. 
 
John S. Skuratowicz, appellant, was the president and majority shareholder 
of Monex Corporation.  Monex purchased and operated the Graceland Coin & 
Stamp store in Columbus.  The store bought and sold precious metals, collectibles, 
and stamps. 
 
As president of Monex, Skuratowicz hired, trained, and evaluated store 
employees.  Skuratowicz, who spent much of his time away from the store at coin 
shows, managed the store under a policy, established by a former co-principal of 
Monex, that the store clerks were responsible for obtaining exemption certificates 
on purchases or collecting sales tax.  Evidently, the store clerks, who were high-
school distributive education students, did not execute this policy acceptably.  
Consequently, the Tax Commissioner, appellee, issued a sales tax assessment 
against Monex for $310,267.19, plus penalty, for the audit period of January 1983 
through June 1986. 
 
Monex’s business failed and it was dissolved.  The commissioner, 
nevertheless, issued an assessment against Skuratowicz as a responsible corporate 
officer of Monex.  According to the testimony, Skuratowicz performed the 
accounting operations for Monex, including preparing and signing sales tax 
returns.  During the audit period, he was the only individual holding check-signing 
authority. 
 
2
 
On appeal, the Board of Tax Appeals (“BTA”) found: 
 
“* * * As president, Mr. Skuratowicz had authority over the general 
business operations, as well as over Monex’s employees.  He had the authority to 
hire and fire employees, and he participated in the training of the employees.  
Further, he engaged in the periodic review of employee performance.  Regardless 
of the role the student-workers had in handling the sales transactions, it is Mr. 
Skuratowicz who had the responsibility for seeing that Monex’s sales tax 
obligations were satisfied.” 
 
The BTA continued: 
 
“* * * He kept the books, and saw that the sales tax forms were prepared 
and filed.  Given our review of Mr. Skuratowicz’s entire relationship to Monex 
and the Graceland store, we find that the record supports a conclusion that Mr. 
Skuratowicz is among that class of officers who can be held accountable for a 
corporation’s failure to file sales tax returns and/or to remit the tax when due.” 
 
Accordingly, the BTA affirmed the commissioner’s order assessing 
Skuratowicz for the liability of the Graceland store, as reduced by the 
commissioner’s prior recalculation of the underlying corporate assessment. 
 
The matter is before this court upon an appeal as of right. 
__________________ 
 
Bailey & Slavin, and Richard C. Slavin, for appellant. 
 
Betty D. Montgomery, Attorney General, and Richard C. Farrin, Assistant 
Attorney General, for appellee. 
__________________ 
 
3
 
Per Curiam.  R.C. 5739.33 imposes personal liability on a responsible 
corporate officer for a corporation’s sales tax.  During the audit period in question, 
it read: 
 
“If any corporation required to file returns and to remit tax due to the state 
under the provisions of sections 5739.01 to 5739.31, inclusive, of the Revised 
Code, fails for any reason to make such filing or payment, any of its officers, or 
employees having control or supervision of or charged with the responsibility of 
filing returns and making payments, shall be personally liable for such failure.  
The dissolution of the corporation shall not discharge an officer’s or employee’s 
liability for a prior failure of the corporation to file returns or remit tax due.  The 
sum due for such liability may be collected by assessment in a manner provided in 
section 5739.13 of the Revised Code.”  (132 Ohio Laws, Part I, 2029.) 
 
Skuratowicz argues that the corporate policy, directing the employees to 
collect the sales tax or obtain the customer’s signature on an exemption certificate, 
shields Skuratowicz from liability.  The commissioner replies that Skuratowicz is 
exactly the type of person R.C. 5739.33 renders liable for the corporation’s sales 
tax.  The commissioner is correct. 
 
In Spithogianis v. Limbach (1990), 53 Ohio St.3d 55, 559 N.E.2d 449, 
Spithogianis, the president of the taxpayer corporation, had authority to oversee 
the operations of the corporation.  He spent only one or two days per month doing 
this, so he hired a consultant to direct the corporation’s daily operations.  
Spithogianis also authorized the consultant to approve all corporate checks.  
Spithogianis participated in some of the corporation’s operations but generally 
delegated responsibility for filing sales tax returns and paying the tax to other 
corporate employees.  The BTA found that Spithogianis was not liable because he 
 
4
delegated the tax collection and remission duties to others throughout the audit 
period. 
 
We, however, reversed the BTA’s decision and held Spithogianis liable for 
the corporate assessment.  We said, 53 Ohio St.3d at 57, 559 N.E.2d at 451: 
 
“The General Assembly intended, through the enactment of R.C. 5739.33, 
to hold those officers or employees who are in charge of the operations of the 
defaulting corporation personally liable for unpaid sales tax, if such persons filed 
returns or paid taxes, or controlled or supervised those others who performed those 
tasks, or had responsibility to such tasks.  R.C. 5739.33 does not permit 
responsible officers or employees to escape liability by delegating those duties to 
others.”  Accord McGlothin v. Limbach (1991), 57 Ohio St.3d 72, 565 N.E.2d 
1276. 
 
Skuratowicz had the duty to see that Monex’s employees collected the 
correct amount of sales tax from Monex's customers and remitted the correct 
amount to the state.  Since he failed in his duty, R.C. 5739.33 renders him 
personally responsible for Monex’s tax liability. 
 
Skuratowicz also argues that the BTA denied him due process.  He claims 
the BTA did not permit him to challenge the underlying corporate assessment.  
Skuratowicz, however, did not list in his notice of appeal to the BTA that he 
planned to challenge the underlying assessment. 
 
Under R.C. 5717.02, a taxpayer must specify error in the notice of appeal to 
the BTA for the BTA to have jurisdiction over the error.  Kern v. Tracy (1995), 72 
Ohio St.3d 347, 650 N.E.2d 428.  Thus, the BTA had no jurisdiction to consider 
the challenge to the underlying assessment.  Hence, the BTA could not deny 
Skuratowicz due process for a claim that Skuratowicz did not ask the BTA to 
process. 
 
5
 
Finally, Skuratowicz claims error over the uncertain amount of his 
assessment.  The amount is uncertain because the Monex assessment had been 
reduced on appeal by the corporation (BTA No. 87-H-976).  The BTA correctly 
resolved the dilemma over how much Skuratowicz should pay when, in this case, 
it ordered the commissioner to change Skuratowicz’s assessment amount to the 
reduced underlying assessment amount of the corporation. 
 
Accordingly, we affirm the BTA’s decision because it is reasonable and 
lawful. 
Decision affirmed. 
 
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and 
LUNDBERG STRATTON, JJ., concur.