Court Opinion

ID: 9627969
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:01:39.986092+00
Date Added: 2024-06-11T18:06:53.820833
License: Public Domain

SIMMS, Justice,
dissenting:
¶ 1 I dissent to Part II of the majority opinion.
¶ 2 United’s catalog production is an integral part of its marketing effort. However, neither 68 O.S. § 1359, nor this Court’s opinion in Schulte Oil Co. v. Oklahoma Tax Comm’n, 882 P.2d 65 (Okl.1994), permit an expansion of the manufacturer’s tax exemption to encompass United’s particular marketing activity in the instant case. One of the stated requirements of 68 O.S. § 1359 is that the manufactured goods are items for sale or resale. See 68 O.S. § 1359(A). There is little evidence in the record regarding the sale of the catalogs, with the only references in this regard being that the catalogs were given away, or occasionally sold at a nominal cost. While there may be evidence that United does manufacture its catalogs, the additional requirement that the product be prepared for sale or resale is completely lacking with reference to the catalog production. Because the catalog production is unable to stand as a manufactured product in its own right, the catalog production must fit within the manufacturing parameters of the gift figurine line for United to avail itself of the tax exemptions of § 1359.
¶3 The marketing and post-production nature of the catalog itself does not fit within the parameters of the manufacturing definition provided under the Sales Tax Code, 69 O.S. § 1352(H).
“Manufacturing” means and includes every operation commencing with the first production stage of any article of tangible personal property and ending with the completion of tangible personal property having the physical properties which it has when transferred by the manufacturer to another.
¶ 4 All the physical properties which the figurines have when transferred from United to its customers exist without regard to the catalog production and as such the catalog production falls outside United’s figurine manufacturing activities and outside the exemptions of § 1359. The physical properties of the figurines are complete regardless whether a catalog accompanies the shipment.
¶5 To the degree that United’s Oklahoma based graphic art production is used to create related gift products for sale, such as books, posters and other gift items, United can be considered a manufacturer of this related line of products and this production *732would stand as a manufactured product in its own right. It is the separate marketing nature of the catalogs and the fact that they are not created for sale or resale that prevents United from shrouding its manufacturer’s status over every enterprise in which it endeavors.
¶ 6 United was not entitled to the manufacturer’s exemption for those items relating to its catalog production. However, United was entitled to the manufacturer’s exemption for graphic art production of the related gift products that were manufactured for sale or resale, pursuant to the dictates of 68 O.S. § 1359(A).
¶ 7 I dissent to Part IV and to the Summary and Instructions of the majority opinion, as well.
¶8 I am authorized to state that Vice Chief Justice Summers joins me in the views expressed in the dissent to Part II of the majority opinion.