On January 6, 2026, the Ohio Board of Tax Appeals reversed the Tax Commissioner’s decision and voided a use tax assessment against MGQ Terminal, Inc. (“MGQ”) for the period July 1, 2013, through June 30, 2016. The Board concluded MGQ’s activities qualified as a “manufacturing operation” under Ohio law, so MGQ’s purchases of natural gas, expansion tank paint, and certain manufacturing equipment fell within Ohio’s manufacturing exemption and were not subject to use tax.
The Board emphasized what MGQ actually does inside its facility, not how the Department labeled the business. MGQ receives refinery waste and off-spec asphalt streams, heats the material so it can be moved and processed, strains out contaminants, and uses heated tanks to continuously agitate and blend products. MGQ also relies on lab testing and rework to hit precise customer specifications. The Board found these steps change measurable characteristics and produce new, customer-specific products, so MGQ was not merely “storing” material. The Board also rejected arguments that the exemption required MGQ to own the input materials or to sell a final product. (MGQ Terminal, Inc. v. Patricia Harris, Tax Commissioner of Ohio, Ohio Board of Tax Appeals, Case Nos. 2022-631, 2022-751, 2022-752, 2022-753, January 6, 2026)