Title: N.A.T. Transp., Inc. v. McClain

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
N.A.T. Transp., Inc. v. McClain, Slip Opinion No. 2021-Ohio-1374.] 
 
 
 
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. 2021-OHIO-1374 
N.A.T. TRANSPORTATION, INC., APPELLANT, v. MCCLAIN, TAX COMMR., 
APPELLEE. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as N.A.T. Transp., Inc. v. McClain, Slip Opinion No.  
2021-Ohio-1374.] 
Taxation—Use tax—R.C. 5739.02(B)(32), “highway transportation for hire” 
exemption—For purposes of R.C. 5739.02(B)(32), waste is “personal 
property belonging to” the person or entity that generated it when that 
person or entity has an agreement with the hauler that specifies where it is 
to be taken for disposal—Decision of Board of Tax Appeals affirmed in part 
and reversed in part. 
(No. 2020-0110—Submitted January 12, 2021—Decided April 22, 2021.) 
APPEAL from the Board of Tax Appeals, Nos. 2018-55, 2018-56, and 2018-57. 
__________________ 
 
 
SUPREME COURT OF OHIO 
 
2
Per Curiam. 
{¶ 1} Appellant, N.A.T. Transportation, Inc. (“N.A.T.), challenges a 
decision of the Board of Tax Appeals (“BTA”) that upheld three use-tax 
assessments based on N.A.T.’s purchase of three trucks.  N.A.T. contends that 
because it purchased the trucks for use in its business as a for-hire motor carrier, 
the purchases were exempt from sales and use tax under the “highway 
transportation for hire” exemption, R.C. 5739.02(B)(32).  Both the tax 
commissioner and the BTA determined that the purchases did not qualify for the 
exemption, because the use of the trucks to transport waste material to landfills did 
not qualify as the transportation of “personal property belonging to others,” as 
required by the statute.  After careful review of the record and the arguments of the 
parties, we affirm the BTA’s decision in part and reverse in part. 
I. BACKGROUND 
A. Facts 
{¶ 2} The use-tax assessments at issue relate to N.A.T.’s purchases of (1) a 
2015 Peterbilt truck, (2) a 2013 Peterbilt truck, and (3) a 2013 Lodal truck.  The 
Lodal truck is designed to pick up and haul residential waste from the curb and is 
limited to that function.  The two Peterbilt trucks are more versatile vehicles that 
are suited for picking up and hauling trash containers maintained at commercial, 
industrial, and “institutional” sites, such as schools. 
{¶ 3} N.A.T. has held a certificate from the Public Utilities Commission of 
Ohio (“PUCO”) as a for-hire motor carrier for decades and has hauled items such 
as iron and steel products, machinery, recyclables, and trash.  Michael Torok, 
founder and chief executive officer of N.A.T., testified at the hearing before the 
BTA that N.A.T. serves some 7,000 residential generators of trash, including about 
1,000 pursuant to contracts with political subdivisions and about 6,000 pursuant to 
“subscriptions,” which are less formal agreements.  The record contains four refuse-
haulage contracts, one between N.A.T. and Wood County and three between 
January Term, 2021 
 
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N.A.T. and three villages in Wood County.  Each contract specifies that all refuse 
shall be delivered to the Wood County Landfill, and one of the village contracts 
designates the village as the “Shipper” and N.A.T. as the “For Hire Carrier.”  
Additionally, the company has some 700 commercial/industrial clients and roughly 
ten institutional customers.  The commercial, industrial, and institutional customers 
designate the destination for disposal of their waste. 
{¶ 4} There are effectively three components that make up the amount that 
N.A.T.’s customers pay in connection with its hauling of their waste.  The first 
component, which is generally determined by volume for residential customers and 
by container volume (plus an additional charge for being over a certain weight) for 
commercial, industrial, and institutional customers, is N.A.T.’s fee for transporting 
the waste from a designated location to a landfill.  The second component is a 
weight-based charge imposed by the landfill.  The final component, which Torok 
referred to as an “excise tax at the gate,” is charged by the landfill primarily to cover 
solid-waste-district fees and fees imposed by the Ohio Environmental Protection 
Agency (“EPA”). 
{¶ 5} The record contains an April 2013 letter Torok wrote to N.AT.’s 
customers, stating that N.A.T. has “contractual, written, verbal or implied 
agreements, with all its customers, on the final destination and the disposal or 
processing of the materials that [it] transport[s].”  The letter acknowledged that 
customers “expect N.A.T. to honor these agreements without exception” and 
reassured customers that N.A.T. would notify the customers if it became impossible 
for N.A.T. to comply. 
{¶ 6} Also in the record are resolutions concerning the Wood County Solid 
Waste Management District, the Hancock County Solid Waste Management 
District, and the Ottawa-Sandusky-Seneca Joint Solid Waste Management District; 
these resolutions specify that those counties’ solid-waste-disposal facilities are 
authorized to receive refuse that is picked up in within their jurisdiction. 
SUPREME COURT OF OHIO 
 
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{¶ 7} Ken Rieman, a former director of the Wood County Solid Waste 
Management District, testified before the BTA about the obligations imposed on 
generators and haulers in a solid-waste district.  He stated that a district (1) imposes 
“flow control” measures that designate where waste generators must dispose of 
their waste and (2) levies disposal fees to fund its operations.  Generators and 
haulers who violate their flow-control obligations will be fined if the violations are 
discovered.  These requirements apply to industrial, commercial, and residential 
waste.  Additionally, based on his previous employment experience, Rieman 
analogized waste haulage to shipping items from an industrial plant: if the recipient 
of an item sent a “company truck” to pick up the item, then “ownership transferred 
when the [item] went on the truck.”  But “[i]f it was a for-hire carrier, the ownership 
of that [item] would still belong to the plant until it reached” the recipient. 
{¶ 8} An Ohio EPA official from the Division of Materials and Waste 
Management testified that a residential generator of solid waste—as opposed to a 
generator of hazardous or infectious waste—“has no ongoing environmental 
liability once the solid waste is picked up by the hauler for proper transportation 
and disposal.”  The official additionally testified that the hauler has environmental 
liability for the proper transportation and disposal of the waste from the time it takes 
physical possession and control of the waste until it delivers the waste at the 
disposal site. 
B. The decisions below 
{¶ 9} N.A.T. sought use-tax exemptions for the three trucks on the ground 
that it used them to transport personal property belonging to others for 
consideration, pursuant to R.C. 5739.02(B)(32) and 5739.01(Z).  The tax 
commissioner denied the exemption claims and upheld the assessment for each 
truck based on this court’s decision in Rumpke Container Serv., Inc. v. Zaino, 94 
Ohio St.3d 304, 762 N.E.2d 995 (2002).  In each final determination, the tax 
commissioner stated that the question “whether hauling waste is considered hauling 
January Term, 2021 
 
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personal property belonging to others” had “already been answered” in the negative 
in Rumpke.  The tax commissioner also rejected N.A.T.’s attempts to distinguish 
its situation from that in Rumpke, finding that, as in Rumpke, the key fact was that 
N.A.T.’s customers had “relinquished control” of their trash when it was picked up 
by N.A.T.  N.A.T. then appealed the three assessments to the BTA. 
{¶ 10} On appeal, the BTA issued a consolidated decision covering all three 
assessments.  Like the tax commissioner, the BTA rejected N.A.T.’s attempt to 
distinguish Rumpke.  In addition to agreeing with the tax commissioner’s reasoning, 
the BTA noted that most of N.A.T.’s residential customers did not “control the 
disposition of their waste” and that as a result, the present case fell within the ambit 
of this court’s analysis in Rumpke.  BTA Nos. 2018-55, 2018-56, and 2018-57, 
2019 WL 7340930, *3 (Dec. 23, 2019).  The BTA accordingly affirmed all three 
assessments, and N.A.T. appealed to this court. 
II. ANALYSIS 
A. Standard of review 
{¶ 11} In reviewing a decision of the BTA, we determine whether the 
decision is reasonable and lawful, deferring to factual determinations of the BTA 
but correcting legal errors.  Accel, Inc. v. Testa, 152 Ohio St.3d 262, 2017-Ohio-
8798, 95 N.E.3d 345, ¶ 11.  In this case the BTA made certain factual findings that 
merit our deference because they are supported by the record. 
{¶ 12} N.A.T. asserts a single proposition of law: “A certified for-hire 
motor carrier in the business of hauling waste materials that does not take 
ownership of the waste materials it hauls but simply transports its customers’ 
property to a third-party landfill is entitled to the ‘transportation for hire’ exemption 
under R.C. 5739.02(B)(32).”  This proposition confronts us with a question of law: 
What must a waste hauler who holds a PUCO certificate as a for-hire motor carrier 
show in order to qualify its truck purchases for the transportation-for-hire 
exemption?  We determine this issue regarding the meaning and proper application 
SUPREME COURT OF OHIO 
 
6
of the statute de novo.  Progressive Plastics, Inc. v. Testa, 133 Ohio St.3d 490, 
2012-Ohio-4759, 979 N.E.2d 280, ¶ 15. 
B. The transportation-for-hire exemption 
{¶ 13} The sales tax and the complementary use tax broadly apply to 
transfers of tangible personal property for consideration.  See R.C. 5739.01(B)(1) 
(sales-tax definition of “sale” includes such transfers); E. Mfg. Corp. v. Testa, 154 
Ohio St.3d 200, 2018-Ohio-2923, 113 N.E.3d 474, ¶ 10 (“Under the sales- and use-
tax statutes, every sale or use of tangible personal property is presumed to be 
taxable”), citing R.C. 5739.02(C) and 5741.02(G).  For purposes of the sales and 
use taxes, “tangible personal property” is defined as “personal property that can be 
seen, weighed, measured, felt, or touched, or that is in any other manner perceptible 
to the senses”—and the definition expressly includes “motor vehicles.”  R.C. 
5739.01(YY). 
{¶ 14} R.C. 5741.02(A)(1) states that use tax is “collected as provided in” 
R.C. 5739.025.  Under R.C. 5739.025(A), use-tax liability is calculated “by 
multiplying the [purchase] price by the aggregate rate of taxes in effect.”  And 
pursuant to R.C. 5741.02(B), each consumer “using * * * in this state tangible 
personal property * * * shall be liable for the tax” when the use tax has not been 
collected and remitted by the seller. 
{¶ 15} The sales-tax law sets forth certain exemptions from the general 
operation of the tax, and the applicability of a sales-tax exemption entails a 
corresponding exemption under the use tax.  See R.C. 5741.02(C)(2) (providing 
that the use tax does not apply to the use of tangible personal property “the 
acquisition of which, if made in Ohio, would be a sale not subject to the [sales] 
tax”); Satullo v. Wilkins, 111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954,  
¶ 21.  Like any other taxpayer claiming an exemption, N.A.T. must show that the 
statute it relies on clearly expresses the exemption in relation to the facts of its 
January Term, 2021 
 
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claim.  Veolia Water N. Am. Operating Servs., Inc. v. Testa, 146 Ohio St.3d 52, 
2016-Ohio-756, 51 N.E.3d 613, ¶ 19. 
{¶ 16} N.A.T. predicates its claim for exemption on R.C. 5739.02(B)(32), 
pursuant to which the sales tax (and use tax) does not apply to “[t]he sale * * * of 
* * * motor vehicles that are primarily used for transporting tangible personal 
property belonging to others by a person engaged in highway transportation for 
hire.”  As pertinent here, R.C. 5739.01(Z)(1) defines “highway transportation for 
hire” as 
 
the transportation of personal property belonging to others for 
consideration by * * * [t]he holder of a * * * certificate issued by 
this state * * * authorizing the holder to engage in transportation of 
personal property belonging to others for consideration over or on 
highways, roadways, streets, or any similar public thoroughfare. 
 
R.C. 5739.01(Z) proceeds to set forth two alternative criteria that are not relevant 
in this appeal. 
{¶ 17} Accordingly, for the three N.A.T. vehicles at issue to qualify for the 
“highway transportation for hire” exemption, N.A.T. has the burden to prove that 
(1) it holds a permit or certificate described in R.C. 5739.01(Z) and (2) the vehicles 
are primarily used to (i) transport personal property (ii) belonging to others (iii) for 
consideration. 
{¶ 18} It is undisputed that N.A.T.’s PUCO certificate as a for-hire motor 
carrier satisfies the first prong of the test.  Equally undisputed is that N.A.T. 
receives consideration for hauling waste.  The question remains whether the waste 
that N.A.T. hauls in the trucks at issue constitutes “personal property belonging to 
others” as that phrase is used in R.C. 5739.01(Z)(1) and 5739.02(B)(32). 
 
 
SUPREME COURT OF OHIO 
 
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C. Rumpke does not control this case 
{¶ 19} The tax commissioner argues that we must affirm based on the 
proposition, which the tax commissioner derives from our decision in Rumpke, 94 
Ohio St.3d 304, 762 N.E.2d 995, that trash hauling as a general matter does not 
constitute the transportation of personal property belonging to others under R.C. 
5739.02(B)(32).  We disagree. 
{¶ 20} In its decision in Rumpke, the BTA found the transportation-for-hire 
exemption inapplicable solely because the taxpayer, Rumpke, did not hold the 
certification specified by R.C. 5739.01(Z)(1)—and the permits or licenses held by 
Rumpke did not satisfy the statutory requirement.  See Rumpke Container Serv., 
Inc. v. Tracy, BTA Nos. 98-M-1254 and 98-M-1257 through 1264, 2000 WL 
1781711, *4-5 (Oct. 27, 2000).  We affirmed that finding, 94 Ohio St.3d at 307-
308, 762 N.E.2d 995, but we additionally determined that even if Rumpke had 
possessed the requisite certification, “the waste being transported by Rumpke is not 
‘personal property belonging to others’ within the meaning of R.C. 5739.01(Z)(1),” 
id. at 309.1  We predicated that determination on two factors: the generators of the 
waste Rumpke collected “relinquished control of the waste when it [was] removed 
by Rumpke for transport to the landfill” and Rumpke, by “transporting the waste to 
its landfill,” was “transporting the waste in furtherance of its business of waste 
disposal, not as a person engaged in highway transportation of other’s property for 
hire.”  Id.  In support of our conclusion, we cited a federal case dealing with the 
interstate regulation of motor carriers and a PUCO administrative rule.  Id. 
                                                 
1.  Although N.A.T. asserts that this court’s determination in Rumpke that the hauler in that case did 
not transport personal property belonging to others was “mere dicta,” our discussion of that issue 
was not obiter dictum, because it constituted an alternative basis for the decision that would by itself 
have sufficed to resolve the case, see Woods v. Interstate Realty Co., 337 U.S. 535, 537, 69 S.Ct. 
1235, 93 L.Ed. 1524 (1949) (“where a decision rests on two or more grounds, none can be relegated 
to the category of obiter dictum”). 
January Term, 2021 
 
9
{¶ 21} Rumpke differs from the present case in two crucial respects.  First, 
unlike N.A.T., Rumpke did not hold a PUCO certification as a for-hire motor 
carrier.  Second, Rumpke and its consolidated entities owned the landfills to which 
the Rumpke trucking affiliates transported the waste collected.  Id. at 304.  As a 
result, Rumpke (unlike N.A.T.) was in the “business of waste disposal” rather than 
in the business of for-hire carriage.  Id. at 309. 
D. Waste is personal property 
{¶ 22} For purposes of R.C. Title 57, “personal property” is defined to 
include “every tangible thing that is the subject of ownership * * * that does not 
constitute real property.”   R.C. 5701.03(A).2  Despite this broad definition, the tax 
commissioner, relying primarily on a PUCO administrative rule, contends that 
waste is not “personal property.”  The rule he relies on is Ohio Adm.Code 4901-5-
12(A)(1), which states: 
 
The term “waste,” as used in [Ohio Adm.Code Chapter 
4901-5], includes, but is not restricted to, industrial, commercial, 
and residential garbage, cesspool or septic tank cleanings, and any 
commodity or substance discarded by the owner thereof with the 
purpose of abandonment.  “Waste” is not included in the term 
“property” as used in Chapters 4921. and 4923. of the Revised Code 
when defining transportation for hire subject to regulation by the 
[PUCO]. 
 
                                                 
2.  R.C. 5701.03(A) provides that “ ‘[p]ersonal property’ does not include * * * motor vehicles 
registered by the owner thereof.”  But that exception applies only to ad valorem property taxation, 
not to the sales and use tax.  Gen. Motors Corp. v. Wilkins, 102 Ohio St.3d 33, 2004-Ohio-1869, 
806 N.E.2d 517, ¶ 26-43. 
SUPREME COURT OF OHIO 
 
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(Emphasis added.)  The tax commissioner argues that our decision in Rumpke 
establishes the importance of this rule because, in support of our holding in that 
case, we cited and discussed former Ohio Adm.Code 4901-5-30(A)(2), 1987-1988 
Ohio Monthly Record 675, effective Dec. 25, 1987, which was almost identical to 
current Ohio Adm.Code 4901-5-12(A)(1).  See Rumpke, 94 Ohio St.3d at 309, 762 
N.E.2d 995. 
{¶ 23} For several reasons, we reject the tax commissioner’s argument.  
First, although we did cite and briefly discuss the former administrative rule in 
Rumpke, we did not generally hold that waste is not personal property.  Instead, we 
made the more specific determination that “the waste being transported by Rumpke 
is not ‘personal property belonging to others’ within the meaning of R.C. 
5739.01(Z)(1).”  (Emphasis added.)  Id.  Because Rumpke was engaged in the 
“business of waste disposal” through its operation of landfills, id., and because 
N.A.T. is in the business of being a for-hire carrier, our ruling in Rumpke does not 
foreclose a different conclusion in this case. 
{¶ 24} Second, although this court in Rumpke relied in part on former Ohio 
Adm.Code 4901-5-30(A)(2), our discussion in Rumpke is neither binding nor 
persuasive here.  For one thing, our opinion in Rumpke made no mention of R.C. 
5701.03(A), which defines personal property in the tax context.  As a result, 
Rumpke does not qualify as precedent concerning the applicability of R.C. 
5701.03(A) in this case.  See United Food & Commercial Workers Union, Local 
1564 of New Mexico v. Albertson’s, Inc., 207 F.3d 1193, 1199-1200 (10th Cir.2000) 
(previous decision that did not explicitly address an issue that may have been 
implicit in the earlier case was not entitled to stare decisis effect on that issue in a 
subsequent case); accord State ex rel. Davis v. Pub. Emps. Retirement Bd., 120 
Ohio St.3d 386, 2008-Ohio-6254, 899 N.E.2d 975, ¶ 39 (prior decisions of this 
court did not have stare decisis effect because the issue to be resolved in the case 
before this court was not actually litigated and decided in those decisions). 
January Term, 2021 
 
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{¶ 25} Additionally, after we decided Rumpke, we clarified that 
administrative rules promulgated by officials other than the tax commissioner do 
not have the force of law in deciding tax-law issues.  Nestle R&D Ctr., Inc. v. Levin, 
122 Ohio St.3d 22, 2009-Ohio-1929, 907 N.E.2d 714, ¶ 40 (administrative rule 
promulgated by the director of the Ohio Department of Development could not 
“provide the definitive construction” of a tax-law statute of limitation, because the 
director of that department was not charged with promulgating rules concerning tax 
statutes).  Accordingly, in this appeal we will devote our attention to the tax code’s 
definition of “personal property” rather than the PUCO rule the tax commissioner 
cites. 
{¶ 26} As discussed, for purposes of this case “personal property” includes 
“every tangible thing that is the subject of ownership.”  R.C. 5701.03(A).  The tax 
commissioner argues that this definition does not encompass waste, because waste 
does not qualify as being “the subject of ownership.”  This theory rests on the idea, 
stated in Rumpke, 94 Ohio St.3d at 309, 762 N.E.2d 995, that generators of waste 
have “relinquished control” of it when it is hauled away, usually with the ultimate 
intent of abandoning all claim of ownership.  If property has been abandoned, the 
tax commissioner reasons, it is not “the subject of ownership.” 
{¶ 27} We reject the tax commissioner’s theory because it contradicts the 
tax commissioner’s own position that, in certain cases, waste can be personal 
property for purposes of the transportation-for-hire exemption.  In a 2013 decision, 
Refuse Transfer Sys., Inc. v. Levin, BTA No. 2009-1710, 2013 WL 6833199 (Oct. 
2, 2013), the BTA discussed the tax commissioner’s ruling regarding the waste that 
the taxpayer, Refuse Transfer Systems, Inc. (“RTS”), transported: in that case RTS 
had contracted with Waste Management to haul waste—which Waste Management 
had previously collected—from transfer stations to Waste Management’s own 
landfills, id. at *2.  The tax commissioner had found that RTS was “ ‘a contract 
hauler of solid waste * * * engaged in the highway transportation of the property 
SUPREME COURT OF OHIO 
 
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of another for consideration.’ ”  Id., quoting the tax commissioner’s final 
determination.  In so ruling, the tax commissioner necessarily regarded the waste 
as a “tangible thing that is the subject of ownership” pursuant to the general 
definition in R.C. 5701.03(A). 
{¶ 28} Although the tax commissioner now attempts to distinguish his 
position in Refuse Transfer, the tax commissioner’s position in that case cannot be 
reconciled with his argument in this case that waste is not personal property.  We 
conclude that as a general matter, waste does constitute personal property for 
purposes of the transportation-for-hire exemption. 
E. N.A.T. had the burden to show that the waste it transported belonged to 
others 
{¶ 29} N.A.T. demonstrated that it primarily transported waste to landfills 
with the trucks at issue, and it argues that it did not itself exercise powers of 
ownership over the waste it transported.  But because generators of waste at some 
point relinquish control of it when it is removed for transport, Rumpke, 94 Ohio 
St.3d at 309, 762 N.E.2d 995, and because they do so with the ultimate purpose of 
abandoning their ownership interest entirely, N.A.T. must show that those 
generators continued to exercise powers of ownership over the waste while N.A.T. 
transported it. 
{¶ 30} Both the tax commissioner and the BTA point to one indicator of 
ownership that is pertinent in this situation.  In his brief, the tax commissioner 
concedes that waste may sometimes be “considered personal property of a customer 
during transportation,” if “the client specifically direct[s] what waste [is] to be taken 
[and] where it [is] to be taken to.”  And the BTA similarly acknowledged in its 
decision that “control over the destination of transported materials has bearing on 
whether the transportation is of ‘personal property belonging to others.’ ”  2019 
WL 7340930 at *3, quoting R.C. 5739.02(B)(32). 
January Term, 2021 
 
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{¶ 31} We agree with this basic premise and hold that for purposes of R.C. 
5739.02(B)(32), waste is “personal property belonging to” the person or entity that 
generated it when that person or entity has an agreement with the hauler that 
specifies where it is to be taken for disposal. 
{¶ 32} The BTA made two findings pertinent to applying this standard.  
First, the BTA noted, based on Torok’s testimony, that “the majority of NAT’s 
customers are residential subscription customers who do not specifically designate 
the ultimate destination of their waste.”  2019 WL 7340930 at *3.  Second, the BTA 
found that “[o]nly a minority of NAT’s customers, i.e., those residential customers 
served pursuant to contracts with municipalities, or commercial or industrial 
customers, specifically designate a landfill or disposal site.”  (Emphasis added.)  
Id.  In the end, the BTA concluded that because “the record does not establish that 
the majority of NAT’s customers control the disposition of the waste it hauls,” 
N.A.T. had not distinguished its situation from that in Rumpke.  Id. 
{¶ 33} We conclude that the BTA erred by failing to correlate its findings 
with the distinct primary uses of the three trucks at issue.  See R.K.E. Trucking, Inc. 
v. Zaino, 98 Ohio St.3d 495, 2003-Ohio-2149, 787 N.E.2d 638, ¶ 27 (because trucks 
may be used for exempt and nonexempt purposes, the taxpayer bears the burden to 
prove the primary use of each truck).  Consistent with R.K.E., the issue is not what 
a majority of all N.A.T.’s customers did or did not do; rather, the issue is what those 
customers who were served by each individual truck did. 
{¶ 34} The record establishes that the Lodal truck is a vehicle specifically 
adapted for curbside pickup of residential waste.  Torok testified that the Lodal 
truck carries “primarily household trash.”  Because the preponderance of residential 
customers—those with subscription agreements with N.A.T.—do not designate the 
destination of the waste, the BTA was justified in upholding the assessment against 
the Lodal truck.  We therefore affirm the denial of exemption and uphold the 
assessment of use tax as to the purchase of the Lodal truck. 
SUPREME COURT OF OHIO 
 
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{¶ 35} By contrast, the two Peterbilt trucks haul containers filled with waste 
primarily for commercial, industrial, and institutional customers that, as the BTA 
acknowledged, designate the destination for the trash.  Torok testified that the 
Peterbilt trucks carry trash that is “primarily [generated by] commercial and 
industrial [customers] and schools” and similar entities.  According to Torok, the 
Peterbilt trucks “very seldom” haul residential trash.  And N.A.T.’s agreements 
with its commercial, industrial, and institutional customers, like its agreements with 
its residential-subscription customers, are oral rather than written. 
{¶ 36} The BTA did not make a finding regarding the primary use of each 
truck, and it therefore failed to tie the use of the Peterbilt trucks to N.A.T.’s 
commercial, industrial, and institutional customers.  However, Torok testified at 
the BTA hearing to the primary use of the Peterbilt trucks, and at oral argument 
before a master commissioner of this court, counsel for the tax commissioner 
conceded that Torok had provided that testimony. 
{¶ 37} The tax commissioner nevertheless finds fault with N.A.T.’s 
presentation of evidence because N.A.T. did not provide “a breakdown for what 
[the trucks] do,” and he contends that “[s]uch limited evidence in the context of 
these waste-hauling trucks is a failure by N.A.T. to meet [its] applicable burden of 
proof.”3 
{¶ 38} It is true that a taxpayer challenging the tax commissioner’s findings 
has the burden to show the manner and extent of error in those findings.  Accel, 152 
Ohio St.3d 262, 2017-Ohio-8798, 95 N.E.3d 345, at ¶ 14.  But the tax commissioner 
in this case overruled N.A.T.’s claims for exemption based on the general doctrine 
that hauling waste does not constitute “transporting personal property belonging to 
others” under R.C. 5739.02(B)(32).  In doing so, the tax commissioner made no 
specific finding as to the primary use—whether it be residential, commercial, or 
                                                 
3.  The tax commissioner also asserts that the testimonial evidence is controverted, but he does not 
point to any contradictory evidence. 
January Term, 2021 
 
15 
industrial—of the Peterbilt trucks.  As a result, N.A.T. did not have the burden to 
rebut a finding by proving the use of those trucks with specificity. 
{¶ 39} Torok’s testimony unquestionably supports a finding that the 
Peterbilt trucks’ primary use is hauling trash for commercial, industrial, and 
institutional customers, and the BTA generally accepted the probative force of his 
testimony.  Because the generators of that waste designate the destination of the 
waste, the Peterbilt trucks are entitled to exemption, and we reverse the BTA’s 
contrary decision as to those trucks. 
III. CONCLUSION 
{¶ 40} For the foregoing reasons, as to BTA case No. 2018-57, we affirm 
the decision of the BTA to uphold the tax commissioner’s assessment of use tax as 
to the Lodal truck.  But as to BTA case Nos. 2018-55 and 2018-56, we reverse the 
BTA’s decision, grant the exemptions, and vacate the use-tax assessments as to the 
two Peterbilt trucks. 
Decision affirmed in part 
and reversed in part. 
O’CONNOR, C.J., and FISCHER, DEWINE, DONNELLY, and BRUNNER, JJ., 
concur. 
KENNEDY, J., concurs in part and dissents in part, with an opinion joined by 
STEWART, J. 
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KENNEDY, J., concurring in part and dissenting in part. 
{¶ 41} I agree with the majority’s holding that waste constitutes personal 
property for purposes of the transportation-for-hire exemption in R.C. 
5739.02(B)(32) and with its granting of the exemptions and vacating the use-tax 
assessments as to the two Peterbilt trucks purchased by appellant, N.A.T. 
Transportation, Inc. (“N.A.T.”).  I part ways with the majority, however, regarding 
its decision to uphold the assessment of use tax as to the Lodal truck. 
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{¶ 42} I agree with the majority that resolution of this matter turns on the 
meaning of the phrase “belonging to others” in R.C. 5739.02(B)(32).  But I disagree 
with its determination that “others” for purposes here is limited to those generators 
of waste who control the disposal destination of their waste.  When generators of 
waste are required by governmental regulations or resolutions to dispose of their 
waste at a specified facility, ownership does not transfer to the hauler but stays with 
the generators.  Because N.A.T. has no control over the destination of the waste it 
primarily hauls on the Lodal truck, it does not assume ownership of that waste and 
the waste must necessarily be property “belonging to others” under R.C. 
5739.02(B)(32).  Therefore, I would reverse the decision of the Board of Tax 
Appeals’ (“BTA”), grant the exemption, and vacate the use-tax assessment as to 
the Lodal truck as well. 
{¶ 43} Under R.C. 5739.02(B)(32), sales tax and the corresponding use tax 
do not apply to “[t]he sale * * * of * * * motor vehicles that are primarily used for 
transporting tangible personal property belonging to others by a person engaged in 
highway transportation for hire.”  The crux of the issue before the court is whether 
the waste the Lodal truck primarily transports is property “belonging to others.” 
{¶ 44} To answer this question, we need only look to the statutory language.  
When construing the meaning of a statute, “[t]he question is not what did the 
general assembly intend to enact, but what is the meaning of that which it did 
enact.”  Slingluff v. Weaver, 66 Ohio St. 621, 64 N.E. 574 (1902), paragraph two of 
the syllabus.  When a term is not defined in a statute, we use the term’s plain and 
ordinary meaning.  Brecksville v. Cook, 75 Ohio St.3d 53, 56, 661 N.E.2d 706 
(1996). 
{¶ 45} The legislature chose to use the phrase “belonging to others.”  In this 
context, “other” means “a different one,” Webster’s Third New International 
Dictionary 1598 (2002).  The phrase “belonging to others” is unambiguous; it 
requires that the waste being transported belong to a party or entity different from 
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the hauler.  “When the language of a statute is plain and unambiguous and conveys 
a clear and definite meaning, there is no need for this court to apply the rules of 
statutory interpretation.”  Symmes Twp. Bd. of Trustees v. Smyth, 87 Ohio St.3d 
549, 553, 721 N.E.2d 1057 (2000).  Unambiguous statutes are applied, not 
interpreted.  Sears v. Weimer, 143 Ohio St. 312, 55 N.E.2d 413 (1944), paragraph 
five of the syllabus. 
{¶ 46} For the Lodal truck to qualify for exemption under R.C. 
5739.02(B)(32), therefore, the waste being primarily transported by that truck must 
belong to a party or entity different from N.A.T.  In other words, the waste cannot 
belong to N.A.T. 
{¶ 47} It is undisputed that when the Lodal truck collects the waste from 
N.A.T.’s residential-subscription customers, N.A.T. has physical possession of the 
waste.  I recognize that evidence of possession of personal property ordinarily raises 
a presumption of ownership.  Mielke v. Leeberson, 150 Ohio St. 528, 533, 83 
N.E.2d 209 (1948).  However, the presumption is rebuttable and may be overcome 
by proof of ownership in another.  Id.  One of the chief indicia of ownership is the 
right of disposition.  Tri-State Group, Inc. v. Ohio Edison Co., 151 Ohio App.3d 1, 
2002-Ohio-7297, 782 N.E.2d 1240, ¶ 26 (7th Dist.), citing Rhoades v. State, 224 
Ind. 569, 70 N.E.2d 27 (1946).  The BTA in its decision in this case acknowledged 
that “control over the destination” of the waste is relevant regarding “whether the 
transaction is of ‘personal property belonging to others.’ ”  BTA Nos. 2018-55, 
2018-56, and 2018-57, 2019 WL 7340930, *3 (Dec. 23, 2019), quoting R.C. 
5739.02(B)(32). 
{¶ 48} Michael Torok, chief executive officer of N.A.T., testified at the 
BTA hearing that the right to choose the destination for disposal of the waste 
transported by N.A.T.’s trucks is controlled by either the customer or by 
governmental regulations or resolutions, and the BTA in its decision took note of 
that testimony, id.  N.A.T. has no control over the destination for disposal of the 
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waste it primarily transports on the three trucks at issue in this case.  Therefore, the 
waste does not belong to N.A.T. for purposes of R.C. 5739.02(B)(32). 
{¶ 49} The fact that in certain circumstances the generators of the waste are 
required by governmental regulations or resolutions to dispose of their waste at 
specific facilities should not alter the outcome here as to the Lodal truck.  
Ownership of the waste is not transferred to N.A.T. in that situation, just as it is not 
transferred to N.A.T. when the generators of the waste themselves specify the 
destination for the waste hauled on the Peterbilt trucks.  The majority’s narrow 
reading of “others” effectively adds words to the statue.  But our duty when 
interpreting a statute is to give effect to the words used, not to delete words that 
were used or insert words that were not used.  See Cleveland Elec. Illum. Co. v. 
Cleveland, 37 Ohio St.3d 50, 524 N.E.2d 441 (1988), paragraph three of the 
syllabus; see also Griffith v. Aultman Hosp., 146 Ohio St.3d 196, 2016-Ohio-1138, 
54 N.E.3d 1196, ¶ 18 (“We apply the statute as written * * * and we refrain from 
adding or deleting words when the statute’s meaning is clear and unambiguous”). 
{¶ 50} The BTA’s decision in Refuse Transfer Sys., Inc. v. Levin, BTA No. 
2009-1710, 2013 WL 6833199 (Oct. 2, 2013), illustrates that a hauler of waste is 
transporting property “belonging to others” under R.C. 5739.02(B)(32) when an 
entity other than the generator (but not the hauler) determines the disposal 
destination of the waste.  In that case, the BTA noted that the tax commissioner had 
described Refuse Transfer Systems, Inc., as “ ‘a contract hauler of solid waste * * * 
engaged in the highway transportation of the property of another for 
consideration,’ ” even though Refuse Transfer’s contract was with Waste 
Management, the entity that collected the waste from the generators and transported 
it to the transfer stations where it was loaded onto Refuse Transfer’s trucks.  Id. at 
*2, quoting the tax commissioner’s final determination. 
{¶ 51} In this matter, the evidence demonstrates that the Lodal truck is 
primarily used to transport waste “belonging to others” under R.C. 5739.02(B)(32).  
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N.A.T.’s Peterbilt trucks are used for the same general purpose as the Lodal truck; 
to primarily transport waste that belongs to others for consideration.  None of the 
waste being hauled on the trucks belongs to N.A.T.  The fact that some of N.A.T.’s 
customers are able to designate the disposal destination, while others are required 
by governmental regulations or resolutions to dispose of their waste at a specified 
facility, should not result in different tax-exemption determinations.  I would, 
therefore, reverse the BTA’s decision, grant the exemption, and vacate the use-tax 
assessment as to the Lodal truck. 
{¶ 52} Accordingly, I concur in part and dissent in part. 
STEWART, J., concurs in the foregoing opinion. 
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Calfee, Halter & Griswold, L.L.P., James F. Lang, Kelly A. Callam, and 
Kari D. Hehmeyer, for appellant. 
 
Dave Yost, Attorney General, and Daniel P. Porembski, Assistant Attorney 
General, for appellee. 
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