OH Board Rules Asphalt Supplier’s Natural Gas is Tax-Exempt

An interesting case in Ohio deals with whether or not natural gas can be taxed, depending on how it's used. The Ohio Board of Tax Appeals ruled on Tuesday, January 6, that MGQ Terminal, Inc. is exempt from use tax on natural gas purchases used to process asphalt to customer specifications. Although Tax Commissioner Patricia Harris had assessed use tax for the period between 2013 and 2016 based on the determination that the company was engaged in a storage business, the board reversed this decision, finding that the company’s activities qualify as tax-exempt "manufacturing operations." The board held that MGQ’s use of natural gas to heat, agitate, and blend refinery waste into homogeneous, specification-compliant products constitutes a transformative manufacturing process rather than mere storage.

---

To view this content, log into your member account. (Not a member? Join Today!)