L. J. Minor Corporation, Appellant, v. Breitenbach, Cleveland Tax 

Administrator, Appellee. 

[Cite as L. J. Minor Corp. v. Breitenbach (1996), Ohio St.3d .]

Taxation -- Municipal income taxes -- Food products company 

operating a manufacturing plant in city of Cleveland and a 

warehouse and shipping facility in city of Brecksville not required 

to pay municipal income taxes to Cleveland on sales resulting 

from purchase orders received in Cleveland from customers 

located outside Cleveland when products that filled those orders 

were shipped to the customers from inventory stored in 

Brecksville -- R.C. 718.02(A), applied. 

 (No. 95-1774 -- Submitted October 8, 1996 -- December 18, 1996.) 

 APPEAL from the Court of Appeals for Cuyahoga County, No. 67885. 

 From 1984 through 1988, appellant, L. J. Minor Corporation (“Minor”), 

owned and operated a manufacturing plant in the city of Cleveland and a 

warehouse and shipping facility in the city of Brecksville. Minor produced 

food products at the Cleveland plant and shipped those products to the 

Brecksville warehouse to be stored in inventory pending the receipt of purchase 

orders from customers. Purchase orders received at the Cleveland plant were 
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forwarded to the Brecksville warehouse. Minor employees working at the 

Brecksville warehouse then filled the orders from the Brecksville inventory and 

shipped the orders via common carrier from Brecksville to Minor’s customers. 

 For tax years 1984 through 1988, Minor calculated and paid net profit 

tax (“income tax”) to Cleveland by treating all shipments of goods made from 

the Brecksville warehouse as Cleveland sales. For tax years 1984 through 

1987, Minor also paid municipal income tax to the city of Brecksville, treating 

the same shipments of goods from the Brecksville warehouse as Brecksville 

sales. 

 Minor later sought a tax refund from Cleveland for overpayment of 

income taxes from 1984 through 1988. Minor did not dispute that taxes were 

payable to Cleveland for products shipped from Brecksville to customers 

located in Cleveland. Minor maintained, however, that taxes were not payable 

to Cleveland for products shipped from Brecksville to customers located 

outside Cleveland. The Cleveland Tax Administrator denied Minor’s request 

for a tax refund. 
 3

 Minor appealed the Tax Administrator’s decision to the Cleveland Board 

of Review, which upheld the decision of the administrator on the theory that 

the intent of the relevant tax legislation was to attribute sales to the city where 

“a significant part of the activity comprising the entire sales process occurs[.]” 

The board concluded that because a “significant portion of activity with respect 

to the sales of the products” occurred in Cleveland and because the Brecksville 

warehouse was “little more than a way station, *** sales of Minor’s food 

products shipped from its Cleveland plant/general offices are ‘sales made in the 

City’ for purpose of taxation[.]” 

 The Common Pleas Court of Cuyahoga County affirmed the board of 

review. The Court of Appeals for Cuyahoga County in a split decision 

affirmed the court of common pleas, finding that the board’s decision was not 

unreasonable, arbitrary or unsupported by the evidence. 

 The cause is now before this court upon the allowance of a discretionary 

appeal. 

 _________________ 
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 Jones, Day, Reavis & Pogue and Roger F. Day, for appellant. 

Sharon Sobol Jordan, Cleveland Law Director, and Debra D. Rosman, 

Assistant Law Director, for appellee. 

Paul A. Grau, Brecksville Director of Law, and Ross S. Cirincione, 

urging reversal for amicus curiae, city of Brecksville. 

Vorys, Sater, Seymour & Pease, Raymond D. Anderson, Eric A. Pierce 

and Kevin M. Czerwonka, urging reversal for amici curiae, Borden, Inc. and 

The Limited, Inc. 

 

 COOK, J. The issue before this court is whether Minor was required to 

pay municipal income taxes to the city of Cleveland on sales resulting from 

purchase orders received in Cleveland from customers located outside 

Cleveland when the products that filled those orders were shipped to the 

customers from inventory stored in Brecksville. 

 The portion of a company’s net profits subject to a particular municipal 

corporation’s income tax is calculated by utilizing an apportionment formula 
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that compares the company’s property, payroll, and sales within the boundaries 

of that municipal corporation to the company’s total property, payroll, and 

sales. R.C. 718.02(A). The resulting ratio is then applied to the taxpayer’s 

total net profits to calculate that portion subject to the municipal corporation’s 

tax. 

 The “sales” portion of the apportionment formula is defined as “[g]ross 

receipts of the business or profession from sales made and services performed 

during the taxable period in such municipal corporation to gross receipts of the 

business or profession during the same period from sales and services, 

wherever made or performed.” R.C. 718.02(A)(3). R.C. 718.02(B) defines 

“sales made in a municipal corporation” as: 

 “(1) All sales of tangible personal property which is delivered within 

such municipal corporation regardless of where title passes if shipped or 

delivered from a stock of goods within such municipal corporation; 

 “(2) All sales of tangible personal property which is delivered within 

such municipal corporation regardless of where title passes even though 
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transported from a point outside such municipal corporation if the taxpayer is 

regularly engaged through its own employees in the solicitation or promotion 

of sales within such municipal corporation and the sales result from such 

solicitation or promotion; 

 “(3) All sales of tangible personal property which is shipped from a place 

within such municipal corporation to purchasers outside such municipal 

corporation regardless of where title passes if the taxpayer is not, through its 

own employees, regularly engaged in the solicitation or promotion of sales at 

the place where delivery is made.” 

 The court of appeals affirmed the denial of Minor’s refund request on the 

basis that “[t]he emphasis in this legislation is plainly upon the sales aspect of 

the activity, not upon the physical act of loading the goods upon a truck or train 

whose final destination is the customer.” A plain reading of R.C. 718.02(B) 

establishes, however, that the place of shipment and the place of delivery 

determine the municipal corporation to which a sale is attributable for taxing 

purposes. Under the facts and circumstances of this case, the only situation in 
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which products shipped from Minor’s Brecksville warehouse may be 

attributable to Cleveland is where the products are shipped to customers 

located in Cleveland. R.C. 718.02(B)(2) and (3). 

 The sales at issue here involve only products shipped from Brecksville to 

customers located outside Cleveland. Under R.C. 718.02(B)(3), such sales are 

 deemed to have been made in Brecksville. Because R.C. 718.02(B)(3) plainly 

and unambiguously states that sales of products shipped from within a 

municipal corporation to purchasers outside that municipal corporation are 

deemed to have occurred at the place of shipment so long as the taxpayer is not, 

through its own employees, regularly engaged in the solicitation or promotion 

of sales at the place where delivery is made, taxing authorities and the courts 

may not interpret R.C. 718.02(B)(3) as embodying a contrary legislative intent. 

 “An unambiguous statute is to be applied, not interpreted.” Storer 

Communications, Inc. v. Limbach (1988), 37 Ohio St.3d 193, 194, 525 N.E.2d 

466, 467; Sears v. Weimer (1944), 143 Ohio St. 312, 28 O.O. 270, 55 N.E.2d 

413, paragraph five of the syllabus. 
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 The judgment of the court of appeals is reversed, and the Cleveland Tax 

Administrator is hereby ordered to refund to Minor that portion of net-profit 

taxes paid by Minor to Cleveland for tax years 1984 through 1988 as the result 

of sales of products shipped from Brecksville to customers located outside the 

city of Cleveland. 

 Judgment reversed. 

 MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER and

STRATTON, JJ., concur.