Court Opinion

ID: 3698534
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:38:08.458823+00
Date Added: 2024-06-11T15:38:35.929949
License: Public Domain

Pool Builders Supply, Inc., as a vendor, was required by the law to collect sales tax from its customers. The record indicates that over $14,000 in sales tax monies was collected but not remitted to the state of Ohio.
The majority has concluded that this tax money loses its identity as taxes due the state and is available to subsidize general creditors of a defunct business.
This legalistic sleight of hand is accomplished by reliance upon Goldstein v. Southern Auto., Inc. (1978), 61 Ohio App.2d 134
[15 O.O.3d 240], which held that: *Page 290 
"The state cannot acquire a lien on personal property for unpaid sales taxes unless it levies execution based upon the judgment it has obtained."
In Goldstein, the court confronted an issue of statutory construction and found it was necessary to determine the legislative intent. In considering R.C. 5739.13, the Goldstein
court developed a rationale which concluded that sales tax monies collected by a vendor may be applied to the satisfaction of private claims and not totally to the satisfaction of the vendor's tax obligation. In essence, that court concluded that the broad general language of R.C. 5739.13 controls over R.C.5733.18, which, on its face, specifically provides for an automatic lien in favor of the state of Ohio for a failure to payany excise or franchise tax on the day such tax is due.
I cannot find that the legislature would ever intend to allow such a result and am not persuaded by the decision upon which the majority relied.
The majority acknowledges that the theory of the existence of a fiduciary relationship between the state and the tax collector was not argued in Goldstein as it was in the cause sub judice.
Nevertheless, this court has dispatched the argument since the cash collected from the customers of Pool Builders Supply, Inc. is gone. Although finding a breach of a fiduciary duty, a fund, designated as being the property of the state of Ohio, could not be found and the majority, therefore, relieves the appellee of its fiduciary responsibilities.
I must conclude that R.C. 5733.18 gives the state of Ohio a priority over general creditors for satisfaction of its claim for sales taxes due the state of Ohio and that the proceeds from the sale of assets in the hands of the receiver is the fund from which such tax monies should be paid to the state. Accordingly, I must dissent.