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Columbia Gas of Ohio, Inc. v. Limbach

Supreme Court of Ohio

March 2, 1994

Columbia Gas of Ohio, Inc., Appellant,
v.
Limbach, Tax Commr., Appellee. [*]

Submitted December 7, 1993

Appeal from the Board of Tax Appeals, No. 89-X-44.

Porter, Wright, Morris & Arthur and George M. Hauswirth; Andrew J. Sonderman and James R. Berendsen, for appellant.

Lee I. Fisher, Attorney General, and Richard C. Farrin, Assistant Attorney General, for appellee.

Columbia Gas of Ohio, Inc., appellant, challenges the denial of its application for a certificate of abatement. If the application were granted, Columbia would receive a refund of the additional public utility excise tax levied by Section 6 of Am. Sub. H.B. No. 100, 140 Ohio Laws, Part I, 1855, 1924 (Effective February 24, 1983) that it paid for tax year 1983.

Columbia sells natural gas to ordinance customers, special contract customers, and customers who have rates set by the Public Utilities Commission of Ohio ("PUCO"). As to the ordinance customers, Columbia negotiates with individual municipalities to supply a municipality's residents. After Columbia and the municipality have negotiated the rate, the municipality passes an ordinance that adopts the contract with Columbia and sets forth the rates to be paid to Columbia by the municipality's residents. Columbia normally includes clauses in the contract that permit it to obtain reimbursement from the residents for any increased taxes. Columbia supplied gas to residents of approximately three hundred sixty municipalities under this type of contract in 1982 and 1983.

As to the special contract customers, Columbia sells gas to large-volume industrial and commercial customers. Columbia negotiates the rate and signs a contract with the customer. Again, Columbia includes provisions in its contracts with the customers that allow it to recover any increase in taxes.

Finally, Columbia sells gas to customers who have rates set by the PUCO in rate cases. Normally, R.C. 4909.161 permits Columbia to pass increases in taxes on to these customers. Cleveland Elec. Illum. Co. v. Pub. Util. Comm. (1986), 24 Ohio St.3d 135, 24 OBR 357, 493, N.E.2d 1340.

Section 6 of Am. Sub. H.B. No. 100 increased the gross receipts tax rate by adding half a percentage point to it for tax year 1983, and Columbia paid a one-time, additional $7, 289, 817 in taxes. Concluding that it could not obtain reimbursement from any of its customers under Section 29 of this Act, which suspended R.C. 4909.161, it filed the instant application with the Tax Commissioner, appellee. After reviewing the application, the commissioner rejected all constitutional claims, determined that the excise tax had been neither illegally nor erroneously paid, and denied the application.

On appeal, the Board of Tax Appeals ruled that it had no jurisdiction to determine the constitutional validity of the Act, noted that E. Ohio Gas Co. v. Limbach (1986), 26 Ohio St.3d 63, 575 OBR 54, 498 N.E.2d 453, a declaratory judgment action, appeared to apply, and affirmed the commissioner's order. In E. Ohio Gas Co., we declared that neither Section 6 nor Section 29 of this Act violated the ban on retroactive legislation contained in Section 28, Article II of the Ohio Constitution.

The cause is now before this court upon an appeal as of right.

PER CURIAM.

We hold that Columbia has not established that it overpaid the disputed tax, a condition for obtaining a certificate of abatement, and that its constitutional claims do not, in fact, contest the levy of ...


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