
    No. 316
    OHIO TAX COM. et al v. NAT. MAL. CASTINGS CO.
    No. 18454.
    Ohio Supreme Court
    On Motion to Certify,
    Docketed March 18, 1924,
    2 Abs.
    1259. TAXATION — Exemption of liabilities to the United States.
    Attorneys — C. C. Crabbe, Atty.' Gen., Wilbur E. Benoy and David E. Green, Columbus, Edward C. Stanton and George C. Hassen, Cleveland, for the Commission; Cook, McGowan, Foote, Bushnell & Burgess, Cleveland, for Castings1 Co.
   This case was filed in the Cuyahoga Common Pleas to vacate, reverse or modify the holding of the Ohio Tax Commission under 5611-2 GC. The Common Pleas modified the hold and its judgment was affirmed by the Appeals Court. The question involved is the right of the Castings Co. to deduct from the sum of legal claims and demands owing to it, the liability it has to the government of the United States arising from income and excess profits tax.’'*

The Castings Co. claimed a deduction on this account in its 1919 report of an ascertained amount of $628,680 and of $292,461 in its 1920 report. This the county auditor refused to permit, and on appeal to the County Board of Revision the auditor was sustained. To this a petition in error was filed in the Cuyahoga Common Pleas. This court modified the Tax Commission to the extent of permitting the Castings Co. to decLuct the liabilities it asked for, holding the same to be legal, bona fide debts, porperly subject to deduction under 5327 GC., apparently following the case of the White Motor Co., 106 OS. 646, without rendering an opinion.

In the White case the holding sanctioned such deductions, but on account of diverse views of the judges, as expressed in the opinion, it was not accepted by the Attorney General, and he advised the Tax Commission of the .state that it did not settle the law, and that it should not permit county auditors to mlake such deductions. Following this the legislature, March 6, 1923, (110 OL. 23) ammended 5327 GC. by inserting the provision that there should not be taken into account in arriving at the credits subject to taxation, “any tax, fee or assessment, due or to become due to the United States or to the state of Ohio, or to any political subdivision thereof.”

This case seeks to reverse the judgments of the Cuyahoga courts, and for final judgment according tao the ruling of the Tax Commission.  