The Ohio Board of Tax Appeals (BTA) ruled in favor of Great Lakes Bar Control, Inc. (“Great Lakes”) that maintaining draft beer dispensing services are not subject to Ohio sales tax. Great Lakes Bar Control, Inc. v. Testa, BTA Case No. 2016-34 (Apr. 14, 2017). Great Lakes was represented by Buckingham attorneys Steve Dimengo, Matt Duncan, and Rich Fry.
The BTA correctly found that preventative maintenance services where the act of removing dirt and contaminants is necessary for the property to continue to operate properly are not taxable building maintenance and janitorial services. Great Lakes maintained draft beer systems for its customers by monitoring and inspecting the system, unclogging lines when necessary, applying cleansing solutions, and other measures to “ensure that the draft system is operating at its optimum performance.” And we applaud Great Lakes for its efforts to keep beer flowing across Ohio!
The Ohio Tax Commissioner asserted that Great Lakes’ services constituted taxable building maintenance and janitorial services which include the cleaning of contents of a building. R.C. 5739.01(II). However, since cleaning was only one aspect of Great Lakes’ regular maintenance program, which included much more than simply making the beer lines clean, the BTA held that the services at issue were not taxable. “Any cleaning of the system is only part of the overall maintenance provided, i.e., is incidental to the regular maintenance service provided.”
Please contact us if you have any questions about this decision or other Ohio sales / use tax issues.
