282
Opinion of the Court
out-of-state, except regulated public utilities that meet Ohio's statutory definition of a "natural gas company." The question here is whether this difference in tax treatment between sales of gas by domestic utilities subject to regulation and sales of gas by other entities violates the Commerce Clause or Equal Protection Clause of the Constitution. We hold that it does not.
I
During the tax period at issue,1 Ohio levied a 5% tax on the in-state sales of goods, including natural gas, see Ohio Rev. Code Ann. §§ 5739.02, 5739.025 (Supp. 1990), and it imposed a parallel 5% use tax on goods purchased out-of-state for use in Ohio. See § 5741.02 (1986). Local jurisdictions were authorized to levy certain additional taxes that increased these sales and use tax rates to as much as 7% in some municipalities. See § 5739.025 (Supp. 1990); Reply Brief for Petitioner 13, n. 11.
Since 1935, when Ohio's first sales and use taxes were imposed, the State has exempted natural gas sales by "natural gas compan[ies]" from all state and local sales taxes. § 5739.02(B)(7).2 Under Ohio law, "[a]ny person . . . [i]s a natural gas company when engaged in the business of supplying natural gas for lighting, power, or heating purposes to consumers within this state." § 5727.01(D)(4) (1996); see also § 5727.01(E)(4) (Supp. 1990); § 5727.01(E)(8) (1986). It is undisputed that natural gas utilities (generally termed "local distribution companies" or LDC's) located in Ohio satisfy this definition of "natural gas company." The Supreme Court of Ohio has, however, interpreted the statutory term to exclude non-LDC gas sellers, such as producers and independent marketers, see Chrysler Corp. v. Tracy, 73 Ohio St.
1 The natural gas purchases that gave rise to petitioner's challenge were made during the period from October 1, 1986, to June 30, 1990.
2 The exemption was originally codified at Ohio Gen. Code Ann. § 5546- 2(6) (Baldwin 1952). As part of a general recodification in 1953, it was moved to Ohio Rev. Code Ann. § 5739.02(B)(7), where it remains today.
Page: Index Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: October 4, 2007