Kempf Surgical Appliances, Inc. v. Tracy
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1 Kempf Surgical Appliances, Inc., Appellant, v. Tracy, Tax Commr., 2 Appellee. 3 [Cite as Kempf Surgical Appliances, Inc. v. Tracy (1996), _____ Ohio St.3d 4 _____.] 5 Taxation -- Sales tax -- Orthotics -- Transcutaneous electrical nerve 6 stimulators and neuromuscular electrical stimulators -- Board 7 of Tax Appeals decision denying exemption under R.C. 8 5739.02(B)(19) 9 determination whether the devices are exempt as aiding in reversed and cause remanded for 10 human perambutation. 11 (No. 95-460--Submitted November 9, 1995--Decided February 14, 12 1996.) 13 Appeal from the Board of Tax Appeals, No. 93-D-486. 14 Kempf Surgical Appliances, Inc. ( Kempf ), appellant, sells or rents 15 transcutaneous electrical nerve stimulators ( TENS ) and neuromuscular 16 electrical stimulators ( NMES ) in its orthotics and orthoses business. Both 17 types of devices are small boxes with wires leading from them that attach to 18 the human skin surface. At preset intervals, the devices, powered by 19 batteries, deliver an electrical impulse through the wires to the skin. 1 According to the evidence, the electrical charges alleviate pain and 2 cause muscle contractions. When contracted, the muscles hold joints in 3 place, much as a brace might, and assist the user in moving his limbs. 4 Among the conditions these devices alleviate is foot drop. The devices 5 stabilize the foot in this condition so that the individual may walk almost 6 normally. Customers also use these devices to rehabilitate their knees, and 7 to walk after knee ligament surgery. 8 9 Kempf s customers also use the devices to cure scoliosis. In this procedure, users attach the wires at designated points on their backs before 10 going to bed at night. While the user sleeps, the electrical charges cause 11 back muscles to contract, which pulls the spine into correct alignment. The 12 user typically wears this device only in bed. 13 The Tax Commissioner, appellee, assessed sales tax on Kempf s sales 14 of these devices in 1988 through 1990. He found that these devices serve 15 as temporary therapeutic devices and assist patients in curing his or her 16 medical problems. Kempf appealed this order to the Board of Tax Appeals 17 ( BTA ). 2 1 The BTA affirmed the commissioner s order. It found that TENS 2 devices delivered electrical stimulation [to] nerves to relieve chronic or 3 post-traumatic pain, but do not actually physically support a part of the body 4 in any direct fashion. As to the NMES devices, the BTA held that they 5 delivered electrical stimulation to muscles to cause their contraction, but 6 do not actually physically support a part of the body in any direct fashion. 7 The BTA ruled that the devices do not function the same as braces. 8 This cause is now before this court upon Kempf s appeal as of right. 9 Lutz, Boster & Cornetet and John B. Cornetet, for appellant. 10 Betty D. Montgomery, Attorney General, and Steven L. Zisser, 11 12 13 Assistant Attorney General, for appellee. Per Curiam. Kempf applies for exemption from the sales tax under R.C. 5739.02(B)(19), which provides: 14 The tax does not apply to the following: 15 *** 16 (19) Sales of *** braces or other devices for supporting weakened or 17 non-functioning parts of the human body *** [and] crutches or other 18 devices to aid human perambulation ***. 3 1 Kempf argues that these devices technologically replace braces and 2 are exempt under R.C. 5739.02(B)(19), or that they aid human 3 perambulation and are exempt also under R.C. 5739.02(B)(19). We agree 4 with the BTA that these devices are not braces under this exemption, but 5 find that the BTA neglected to decide whether these devices aid human 6 perambulation. Consequently, we reverse the BTA and remand this matter 7 to it for such determination. 8 9 In Akron Home Med. Serv., Inc. v. Lindley (1986), 25 Ohio St.3d 107, 25 OBR 155, 495 N.E.2d 417, we addressed the predecessor statute (R.C. 10 5739.02[B][18]) to this exemption. This statute exempted braces and other 11 similar medical or surgical devices for supporting weakened or useless parts 12 of the human body ***. We ruled that braces are of that group which 13 physically supports parts of the body, as opposed to a broader type of 14 support which could include chemically induced support of particular 15 organs. (Emphasis sic.) Id. at 109, 25 OBR at 157, 495 N.E.2d at 420. 16 We ruled that oxygen and oxygen equipment, then under review, were not 17 similar to braces. We judged the oxygen equipment to be delivery systems 18 that do not actually support a part of the body in any direct fashion. 4 1 We find the same here. The instant devices provide electrical charges 2 to contract muscles that stabilize or support a part of the body. However, 3 the muscles provide the support, not the electrical devices. Thus, these 4 devices are not braces or other devices that support weakened or non- 5 functioning parts of the human body under R.C. 5739.02(B)(19). 6 Furthermore, the General Assembly amended the statute after the 7 audit period (1977-1979) involved in our decision in Akron Home Medical 8 Services to enact R.C. 5739.02(B)(19) and to exempt crutches or other 9 devices to aid human perambulation. (138 Ohio Laws, Part II, 3384.) We 10 note that the General Assembly did not, in amending this exemption, 11 include the term similar to modify the clause other devices to aid human 12 perambulation as it had for braces and other similar medical or surgical 13 devices for our review in Akron Home Medical Services. 14 On reviewing the testimony, there appears to be a question as to 15 whether these devices can be used to aid human perambulation. But, the 16 BTA did not review these devices in light of this latter clause of R.C. 17 5739.02(B)(19). Accordingly, we reverse the BTA s decision and remand 5 1 this matter to it for it to rule on whether these devices are exempt as aiding 2 in human perambulation. 3 Decision affirmed in part, 4 reversed in part 5 6 7 8 9 and cause remanded. MOYER, C.J., WRIGHT, RESNICK, F.E. SWEENEY, PFEIFER and COOK, JJ., concur. 10 DOUGLAS, J., dissents. 11 DOUGLAS, J., dissenting. I respectfully dissent. I would affirm the 12 BTA in all respects. 13 6
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