Title: Cincinnati Federal Savings & Loan Co. v. McClain

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Cincinnati Fed. S. & L. Co. v. McClain, Slip Opinion No. 2022-Ohio-725.] 
 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in an 
advance sheet of the Ohio Official Reports.  Readers are requested to 
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 
South Front Street, Columbus, Ohio 43215, of any typographical or other 
formal errors in the opinion, in order that corrections may be made before 
the opinion is published. 
 
 
SLIP OPINION NO. 2022-OHIO-725 
CINCINNATI FEDERAL SAVINGS & LOAN CO., APPELLANT, v. MCCLAIN, TAX 
COMMR., APPELLEE. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Cincinnati Fed. S. & L. Co. v. McClain, Slip Opinion No. 
2022-Ohio-725.] 
Taxation—A transaction is taxable only when the consumer’s true object is to 
obtain the work performed by computer systems rather than to obtain 
personal and professional services that are coupled with the work that is 
performed by computer systems—Decision affirmed in part and vacated in 
part, and cause remanded. 
(No. 2021-0064—Submitted September 21, 2021—Decided March 15, 2022.) 
APPEAL from the Board of Tax Appeals, No. 2018-2247. 
__________________ 
Per Curiam. 
{¶ 1} Appellant, Cincinnati Federal Savings & Loan Co. (“Cincinnati 
Federal” or “the bank”), challenges a decision of the Board of Tax Appeals 
SUPREME COURT OF OHIO 
 
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(“BTA”) that upheld appellee Tax Commissioner Jeffrey McClain’s denial of its 
claim for a sales-tax refund.  Cincinnati Federal paid sales tax to Fiserv Solutions, 
Inc. (“Fiserv”), in connection with compensating Fiserv for services that Fiserv 
provided to the bank during 2013, 2014, and 2015.  Cincinnati Federal argues that 
the services do not qualify as taxable “automatic data processing” or “electronic 
information services” but instead constitute nontaxable “personal or professional 
services.”  For the reasons stated below, we affirm in part, vacate in part, and 
remand for further proceedings. 
I. BACKGROUND 
A. Facts 
{¶ 2} During the period at issue, Cincinnati Federal received and paid for 
computerized services provided by Fiserv pursuant to a master agreement.  The 
agreement refers to “account-processing services” of various kinds; according to 
hearing testimony at the BTA, “the Fiserv system” allows Cincinnati Federal to run 
transactions on a daily basis and maintains all of the bank’s accounting and 
financial records.  Under the agreement, according to Cincinnati Federal’s 
president, Fiserv “maintain[s] the [accounting] system and maintain[s] accounting 
services * * * on an ongoing basis, real-time basis.”  Indeed, Fiserv maintains the 
bank’s general ledger at the Fiserv facility in Brookfield, Wisconsin.1 
{¶ 3} If a customer presents herself at a branch office of the bank and makes 
a deposit, a withdrawal, or a loan payment, the teller accesses the customer’s 
account and the account is updated immediately by the Fiserv system—and the 
updating encompasses not only the customer’s accounts but also the bank’s own 
 
1.  At the BTA hearing, Cincinnati Federal’s expert witness, Scott Deters, a certified public 
accountant, explained that the “general ledger” is an accounting document on which businesses 
“accumulate and summarize[] all the activity for a given period of time,” using “source documents 
that are analyzed and determined to be what is the proper accounting”; the general ledger lists “all 
the assets, all the liabilities, the equity of the company, as well as the income and expense items of 
a company.” 
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accounts and books, all the way to the general ledger.  The Fiserv system does the 
same for nonteller transactions. 
{¶ 4} During the period at issue, Cincinnati Federal regularly received two 
invoices every month from Fiserv.  At the BTA, Cincinnati Federal submitted 
spreadsheets listing each charge from Fiserv’s invoices for the years at issue.  For 
each charge, there was a description of the services, which was taken from the 
invoices themselves, plus a categorization of the charges according to service 
functions, which the bank developed for purposes of its tax appeal.  Some examples 
of the categories that were developed by the bank include the Prologue Accounting 
Platform (the general ledger and ancillary accounting information), Mobility (the 
mobile-application service offered by the bank), Branch Capture Services (the teller 
transactions at the bank’s branches), and FCN Direct Services (the interbank 
transactions between banks served by Fiserv).  During the BTA hearing, Cincinnati 
Federal’s vice president and chief deposit officer identified isolated charges that 
specifically related to Fiserv’s customization of the software to meet Cincinnati 
Federal’s needs. 
B. Course of proceedings 
{¶ 5} In 2016, Cincinnati Federal filed the refund claim at issue, which 
sought recovery of $57,412.58.  The tax commissioner denied the claim in a final 
determination, rejecting the bank’s claims that it purchased nontaxable accounting 
services or, alternatively, nontaxable customized software. 
{¶ 6} Cincinnati Federal appealed the tax commissioner’s denial of its 
refund claims to the BTA.  At the BTA hearing, Cincinnati Federal offered the 
testimony of four witnesses, including the expert testimony of a certified public 
accountant regarding accounting services.  The bank also presented 22 exhibits, 
including invoices and summaries of the invoices that identify the services relating 
to the charges. 
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{¶ 7} In its decision affirming the tax commissioner’s denial of Cincinnati 
Federal’s refund claim, the BTA first addressed the bank’s argument that it had 
purchased customized software from Fiserv, stating that “software customization is 
a spectrum” that ranges from a vendor selling “prewritten software with no 
modifications specific to the purchaser” to a vendor who “creates an entirely new 
software system from scratch.”  BTA No. 2018-2247, 2020 WL 7711533, *4 (Dec. 
22, 2020).  According to the BTA, “[t]he services Fiserv provides are in the middle” 
of the spectrum.  Id.  The BTA applied the principle that “[e]xclusions are ‘strictly 
construed,’ ” id. at *3, quoting Satullo v. Wilkins, 111 Ohio St.3d 399, 2006-Ohio-
5856, 856 N.E.2d 954, ¶ 15, and concluded that Cincinnati Federal’s claim must be 
denied under the principle that exemptions must be denied when “exemption is 
‘doubtful,’ ” id. at *4. 
{¶ 8} Next, the BTA addressed Cincinnati Federal’s claim that the services 
Fiserv provides the bank constitute “accounting services,” which are tax exempt 
under R.C. 5739.01(Y)(2)(a).  Quoting the tax commissioner’s final determination, 
the BTA held that Fiserv’s “ ‘updating and displaying of information upon input or 
request of the data respectively is not accounting services; no studying, altering, 
analyzing, interpreting, or adjusting of the claimant’s data or financial material 
occurs.’ ”  BTA No. 2018-2247, 2020 WL 7711533, at *4. 
{¶ 9} Cincinnati Federal appealed to this court as of right. 
II. ANALYSIS 
A.  The statutes at issue 
{¶ 10} In 1983, Ohio extended its sales and use tax to purchases of  
“automatic data processing and computer services.”  Am.Sub.H.B. No. 291, 140 
Ohio Laws, Part II, 2872, 3214-3215, 3220 (“H.B. 291”); see also Sub.H.B. No. 
794, 140 Ohio Laws, Part II, 4746, 4778, 4785, effective July 6, 1984; R.C. 
5739.01(B)(3)(e) and (Y).  In 1993, the General Assembly amended the statute to 
separate “automatic data processing and computer services” into the following 
January Term, 2022 
 
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categories: automatic data processing (“ADP”), electronic information services 
(“EIS”), and computer services.  Am.Sub.H.B. No. 152, 145 Ohio Laws, Part II, 
3341, Part III, 4287, 4294-4295.  As a result of the amendments, the “sales” that 
are subject to tax include transactions in which ADP, EIS, or computer services are 
“provided for use in business when the true object of the transaction is the receipt 
by the consumer of [ADP], computer services, or [EIS] rather than the receipt of 
personal or professional services to which [ADP], computer services, and [EIS] are 
incidental or supplemental.”  (Emphasis added.)  R.C. 5739.01(B)(3)(e). 
{¶ 11} R.C. 5739.01(Y)(1)(a) defines ADP as the “ ‘processing of others’ 
data, including keypunching or similar data entry services together with verification 
thereof, or providing access to computer equipment for the purpose of processing 
data.”  R.C. 5739.01(Y)(1)(c) defines EIS as “providing access to computer 
equipment by means of telecommunications equipment” for one of two purposes: 
(1) “[e]xamining or acquiring data stored in or accessible to the computer 
equipment” or (2) “[p]lacing data into the computer equipment to be retrieved by 
designated recipients with access to the computer equipment.”2   
{¶ 12} R.C. 5739.01(Y)(2) identifies certain “personal and professional 
services” that are not subject to the tax on  ADP, EIS, or computer services.  That 
section states that “ ‘personal and professional services’ means all services other 
than [ADP], computer services, or [EIS], including but not limited to” the specific 
services identified in R.C. 5739.01(Y)(2)(a) through (k). 
{¶ 13} In this appeal, Cincinnati Federal argues that Fiserv’s services fall 
into two of those categories.  According to Cincinnati Federal, Fiserv provided 
nontaxable accounting services under R.C. 5739.01(Y)(2)(a) and nontaxable 
customization of software under R.C. 5739.01(Y)(2)(e). 
 
 
 
2.  R.C. 5739.01(Y)(1)(b) separately defines “computer services,” but that particular service is not 
at issue in this appeal. 
SUPREME COURT OF OHIO 
 
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B.  Standard of review 
{¶ 14} Cincinnati Federal argues that all the service charges it paid to Fiserv 
are not taxable under both R.C. 5739.01(Y)(2)(a) and (e).  But the BTA rejected 
Cincinnati Federal’s argument as to both provisions.  In this tax appeal, we 
determine whether the BTA’s decision is reasonable and lawful, deferring to factual 
determinations of the BTA but correcting legal errors.  N.A.T. Transp., Inc. v. 
McClain, 165 Ohio St.3d 250, 2021-Ohio-1374, 178 N.E.3d 454, ¶ 11.  The 
determination by the BTA whether a particular service constitutes taxable ADP or 
EIS is a question of “ultimate fact” that is subject to our review and redetermination 
on appeal.  See Marc Glassman, Inc. v. Levin, 119 Ohio St.3d 254, 2008-Ohio-
3819, 893 N.E.2d 476, ¶ 7-8.  On the other hand, a determination of the “true 
object” of a transaction is primarily factual, and we affirm a true-object finding 
when it is reasonable.  See Amerestate, Inc. v. Tracy, 72 Ohio St.3d 222, 223-224, 
648 N.E.2d 1336 (1995). 
C. With respect to the customization of software, the BTA erred by failing to 
apply the true-object test 
{¶ 15} Cincinnati Federal’s first proposition of law claims that the services 
it purchased were nontaxable under R.C. 5739.01(Y)(2)(e) because they involve 
customization of software under that division.  R.C. 5739.01(Y)(2)(e) describes the 
following “personal and professional services”: 
 
Designing policies, procedures, and custom software for 
collecting business information, and determining how data should 
be summarized, sequenced, formatted, processed, controlled, and 
reported so that it will be meaningful to management. 
 
{¶ 16} In its merit brief, Cincinnati Federal emphasizes that Fiserv 
customized its software for the bank’s use and that the “customization work created 
January Term, 2022 
 
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financial statements and a general ledger specific to Cincinnati Federal and not 
usable by any other business.” 
{¶ 17} In opposition, the tax commissioner contends that R.C. 
5739.01(Y)(2)(e) does not apply because “the transactions that underlie the refund 
claim are for services that utilize the software—and not for the software itself.”  
(Emphasis sic.)  As a factual matter, the tax commissioner’s statement is broadly 
true: the record does not indicate that Cincinnati Federal is buying the software 
from Fiserv but rather is purchasing the services that are made possible by that 
software, which remains in Fiserv’s computers.  But R.C. 5739.01(Y)(2)(e) 
addresses more than the creation of custom software for purchase by the 
consumer—it encompasses “[d]esigning * * * custom software for collecting 
business information” without regard to whether that software as a product is sold 
to the consumer or is used by the designer itself to provide service to the consumer. 
{¶ 18} The tax commissioner also contends that “there is no evidence that 
shows the requisite level of customization of software to justify non-taxable status.”  
Beyond that, he argues that because “the transactions underlying the refund claim 
are for a variety of taxable [ADP] and [EIS], not for the development of custom 
software,” R.C. 5739.01(Y)(2)(e) cannot be applicable in this case. In this regard, 
the tax commissioner is arguing in part that adapting existing software to a 
particular customer’s needs simply does not implicate R.C. 5739.01(Y)(2)(e).  But 
contrary to the tax commissioner’s view, R.C. 5739.01(Y)(2)(e) encompasses 
“determining how data should be summarized, sequenced, formatted, processed, 
controlled, and reported.”  Some of the testimony certainly could support a finding 
that Fiserv’s assistance to the bank included some of those service types in adapting 
the preexisting software to Cincinnati Federal’s particular needs.  Indeed, the BTA 
acknowledged that Fiserv did modify software to adapt it to Cincinnati Federal’s 
needs. 
SUPREME COURT OF OHIO 
 
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{¶ 19} Consonant with the tax commissioner’s findings, the BTA stated that 
“the Fiserv software is not custom as that term is used in R.C. 5739.01.”  2020 WL 
7711533 at *3.  But unlike the tax commissioner, the BTA went further and found 
that under R.C. 5739.01(Y)(2)(e), although “Fiserv did not start from scratch” in 
making its software available for use in connection with the processing of 
Cincinnati Federal’s data, “Fiserv made some modifications [to its software] to 
account for Cincinnati Federal’s needs.”  2020 WL 7711533 at *3.  The BTA 
located Fiserv’s services “in the middle” of the software-customization “spectrum” 
that reaches from the purchase of “prewritten software” with no modifications that 
are specific to the purchaser to a transaction in which the vendor “creates an entirely 
new software system from scratch.”  Id. at *4.  The BTA reached its decision on 
this point by treating Cincinnati Federal’s claim under R.C. 5739.01(Y)(2)(e) as a 
claim for a tax exemption, and it applied the principle that when a taxpayer makes 
such a claim, the taxpayer has the burden of proof and in all doubtful cases 
exemption is denied.  Id. at *3; see Anderson/Maltbie Partnership v. Levin, 127 
Ohio St.3d 178, 2010-Ohio-4904, 937 N.E.2d 547, ¶ 16. 
{¶ 20} We conclude that the BTA erred in two respects.  First, it erred by 
viewing R.C. 5739.01(Y)(2)(e) as a tax exemption.  Second, the BTA’s application 
of the stringent test for tax exemptions distracted it from applying the true-object 
test as required by the statute. 
1.  R.C. 5739.01(Y)(2)(e) identifies a separate service and does not function as a 
tax exemption 
{¶ 21} The BTA’s principal error is that it viewed the service of software 
customization under R.C. 5739.01(Y)(2)(e) as an exclusion or exemption from the 
taxation of ADP and EIS.  Quite simply, developing or customizing software is an 
activity that is distinct from “processing others’ data” (ADP) and providing access 
to data through computer equipment and telecommunications equipment (EIS). 
January Term, 2022 
 
9 
{¶ 22} We reject the BTA’s premise that R.C. 5739.01(Y)(2)(e) should be 
construed as a tax exemption for three reasons.  First, the list of services in R.C. 
5739.01(Y)(2) is by its own terms nonexhaustive: “personal and professional 
services” is defined as “all services other than automatic data processing, computer 
services, or electronic information services, including but not limited to” those 
listed in R.C. 5739.01(Y)(2)(a) through (k).  (Emphasis added.)  If R.C. 
5739.01(Y)(2)(a) through (k) were a list of exemptions, then there would be an 
indefinite number of exemptions that were not explicit—and that is a concept that 
stands in conflict with the basic tax-law principle that a tax exemption must be 
expressed in clear and unmistakable terms.  See Application of American Legion, 
151 Ohio St. 404, 408, 86 N.E.2d 467 (1949); see also N.A.T. Transp., Inc., 165 
Ohio St.3d 250, 2021-Ohio-1374, 178 N.E.3d 454, at ¶ 15 (to claim a tax 
exemption, the taxpayer must show that “the statute it relies on clearly expresses 
the exemption in relation to the facts of its claim”).3 
{¶ 23} Second, R.C. 5739.01(B)(3)(e)’s emphasis on the true-object test 
militates against reading R.C. 5739.01(Y)(2)(a) through (k) as a list of tax 
exemptions, because the true-object test presupposes a transaction in which two 
separate services are “bundled” together.  The true-object test was developed from 
statutes that were in effect and cases that were decided before the imposition of 
sales tax on ADP and EIS.  See former R.C. 5739.01(B)(5), H.B. 291 (“ ‘sale’ and 
‘selling’ do not include professional, insurance, or personal service transactions 
which involve the transfer of tangible personal property as an inconsequential 
 
3. We have used the term “exemption” in connection with some services listed in R.C. 
5739.01(Y)(2).  See MIB, Inc. v. Tracy, 83 Ohio St.3d 154, 159, 699 N.E.2d 44 (1998) 
(characterizing the credit-information service described by R.C. 5739.01(Y)(2)(i) as an exempt 
personal service); Community Mut. Ins. Co. v. Tracy, 73 Ohio St.3d 371, 372-374, 653 N.E.2d 220 
(1995) (characterizing R.C. 5739.01(Y)(2)(a) as providing an “exemption” for legal services 
furnished to the taxpayer). The present case does not involve R.C. 5739.01(Y)(2)(i), however, and 
apart from the use of the word “exemption” in Community Mut., nothing in our consideration of the 
claim in that case requires us to treat R.C. 5739.01(Y)(2)(a) or 5739.01(Y)(2)(e) as tax exemptions 
in this case. 
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element, for which no separate charges are made”); Servi-Clean Industries, Inc. v. 
Collins, 50 Ohio St.2d 80, 85, 362 N.E.2d 648 (1977) (deciding whether personal 
property or a service is being sold under R.C. 5739.01(B) requires determining the 
“true object” of the transaction), citing Accountants Computer Servs., Inc. v. 
Kosydar, 35 Ohio St.2d 120, 298 N.E.2d 519 (1973), paragraph two of the syllabus. 
{¶ 24} When the General Assembly decided to impose sales tax on ADP 
and EIS, it defined and carved out those computer-related services as taxable while 
leaving “personal or professional services” outside the ambit of the tax.  
Anticipating cases in which different services could be bundled in one transaction, 
the legislature conditioned the taxability of the whole transaction on determining 
its true object: a transaction is taxable only when the consumer’s true object is to 
obtain the work performed by computer systems—ADP or EIS—rather than to 
obtain personal and professional services that are coupled with the work that is 
performed by computer systems. Accordingly, instead of setting forth a list of 
exemptions, R.C. 5739.01(Y)(2)(a) through (k) identifies a few of the many 
personal and professional services that may be bundled with ADP and EIS in a 
particular transaction. 
{¶ 25} Third, R.C. 5739.01(Y)(2)’s use of the term “personal and 
professional services” connotes services that are performed by people, which are 
distinct from services performed primarily by computer systems.  See Black’s Law 
Dictionary 1327 (10th Ed.2014) (defining “personal service” as “[a] beneficial or 
useful act performed on behalf of another by an individual personally”); id. at 1403 
(defining “professional” as “[s]omeone who belongs to a learned profession or 
whose occupation requires a high level of training and proficiency”).  The 
overriding difference between ADP and EIS, on the one hand, and all “personal and 
professional services” on the other—whether or not those services are specifically 
listed in R.C. 5739.01(Y)(2)(a) through (k)—is that the latter constitute services 
performed by individuals, often “professionals,” not by computer systems.  
January Term, 2022 
 
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Accordingly, the list of personal or professional services in R.C. 5739.01(Y)(2)(a) 
through (k) identifies services that are distinct from ADP and EIS—the list does 
not set forth a list of exclusions from the definition of ADP and EIS.  Consequently, 
the BTA erred by analyzing Cincinnati Federal’s claim as a claim for tax 
exemption. 
2.  The BTA erred by failing to apply the true-object test to the specific service 
charges at issue 
{¶ 26} The BTA explicitly found that “Fiserv made some modifications [to 
the  software] to account for Cincinnati Federal’s needs.”  2020 WL 7711533 at *4.  
And Cincinnati Federal does not dispute that Fiserv provided services that are 
defined as ADP and EIS.  Consequently, this case involves “mixed transactions,” 
because Cincinnati Federal purchased both ADP and EIS from Fiserv and needed 
Fiserv’s software customized for its own use.  The BTA should have applied the 
clear directive of R.C. 5739.01(B)(3)(e) and determined the true object of the 
transactions by examining whether specific charges related to transactions in which 
obtaining software customization was the true object of the transaction as opposed 
to receiving ADP and/or EIS. 
{¶ 27} Cincinnati Federal advocates an all-or-nothing approach to applying 
R.C. 5739.01(Y)(2)(e): the bank contends that all the service charges it paid may 
qualify as software customization.  For his part, the tax commissioner mistakenly 
contends that R.C. 5739.01(Y)(2)(e) may not be applied at all.  But the record in 
this case both permits and requires a more refined analysis: there is extensive 
evidence in this record regarding the charges and the services from Fiserv, and that 
evidence may support the conclusion that some charges relate primarily to the 
provision of ADP and EIS while others relate primarily to the customization of 
software.  See Epic Aviation, L.L.C. v. Testa, 149 Ohio St.3d 203, 2016-Ohio-3392, 
74 N.E.3d 358, ¶ 31-33 (rejecting an all-or-nothing approach, this court held that 
the taxability of an aviation company’s fuel purchases should be determined 
SUPREME COURT OF OHIO 
 
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according to whether each fuel purchase related to the taxpayer’s exempt common-
carrier service or its taxable chartered service). 
{¶ 28} In ComTech Sys., Inc. v. Limbach, 59 Ohio St.3d 96, 98-99, 570 
N.E.2d 1089 (1991), we held that when ADP or EIS is involved in a transaction, 
that transaction is presumed taxable, subject to rebuttal by the taxpayer.  In this 
case, Cincinnati Federal should be permitted to argue on the basis of the record it 
developed in this case that it has rebutted the presumption with respect to some of 
the service charges that it paid.  We therefore vacate the BTA’s decision with 
respect to R.C. 5739.01(Y)(2)(e), and we remand this cause with the instruction 
that the BTA must apply the true-object test to determine the taxability of the 
service charges. 
D.  ADP and EIS remain taxable even though they are associated with 
accounting 
{¶ 29} Cincinnati Federal’s second proposition of law claims that the 
services it purchased were nontaxable under R.C. 5739.01(Y)(2)(a) because they 
involve accounting services under that division.  R.C. 5739.01(Y)(2)(a) describes 
the following “personal and professional services”:  
 
Accounting and legal services such as advice on tax matters, 
asset management, budgetary matters, quality control, information 
security, and auditing and any other situation where the service 
provider receives data or information and studies, alters, analyzes, 
interprets, or adjusts such material. 
 
{¶ 30} For the reasons that follow, we reject Cincinnati Federal’s argument. 
1.  Cincinnati Federal’s replacement theory is a tax-exemption theory 
{¶ 31} At oral argument, Cincinnati Federal clarified that it does not dispute 
that Fiserv provides services that are defined as ADP and EIS.  Fiserv receives data 
January Term, 2022 
 
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from Cincinnati Federal and its customers and processes that data with its 
computers while making it available to the bank through telecommunications 
equipment. 
{¶ 32} Cincinnati Federal’s accounting-services argument relies on a 
“replacement” theory: in its merit brief, Cincinnati Federal maintains that it 
“replaced a portion of the internal accounting department and an external traditional 
accounting/bookkeeping firm by use of the accounting services of Fiserv.”  At the 
BTA hearing, Cincinnati Federal’s president testified that “Fiserv provides [the 
bank’s] accounting system.  They provide accounting services, maintain the system 
and maintain accounting services * * * on an ongoing basis, real-time basis.”  He 
confirmed that Fiserv’s services include maintaining the general ledger. 
{¶ 33} Deters, Cincinnati Federal’s accounting expert, opined that 
providing a general ledger is an “accounting service” because it involves 
“summarizing the transactions, analyz[ing] and determin[ing] transactions, 
determining where they should be posted, what the proper accounting is, all of that 
would be considered an accounting service.”  According to Deters, an accounting 
service is an accounting service whether it is provided by computer systems or 
performed by “an office full of accountants poring over books.” 
{¶ 34} Thus, under its replacement theory, the bank argues that even though 
the services fit the definitions of ADP and EIS, they are specially excluded from 
taxation by virtue of R.C. 5739.01(Y)(2)(a) because they replace accounting 
services that would otherwise be provided by individuals. 
{¶ 35} As already discussed, however, we do not read R.C. 
5739.01(Y)(2)(a) through (k) primarily as setting forth a list of tax exemptions.  Just 
as R.C. 5739.01(Y)(2)(e) identifies a distinct service of software customization 
performed by individuals, R.C. 5739.01(Y)(2)(a) describes specific services 
performed by individuals that may be bundled with ADP or EIS in a particular 
transaction. 
SUPREME COURT OF OHIO 
 
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2.  Because Fiserv did not provide any accounting services that were performed 
by individuals, the ADP and EIS it did provide are taxable services 
{¶ 36} In 
evaluating 
Cincinnati 
Federal’s 
claim 
under 
R.C. 
5739.01(Y)(2)(e), we concluded that the BTA erred by not performing the true-
object test with respect to individual charges the bank paid to Fiserv.  Here, we 
reach a different conclusion. 
{¶ 37} Unlike R.C. 5739.01(Y)(2)(e), R.C. 5739.01(Y)(2)(a) does not 
trigger the need to perform the true-object test in this case.  As Cincinnati Federal’s 
counsel conceded at oral argument, the record contains no evidence that Fiserv 
employs accountants who supply services to Cincinnati Federal, nor is there any 
evidence that any individuals employed by Fiserv provide the bank with an 
accounting-analysis service.  Also, when asked at oral argument to identify 
evidence that Fiserv studies, alters, or analyzes data that is generated by Cincinnati 
Federal, counsel relied on Fiserv’s “provision of a general ledger on a real-time 
basis,” which requires “continuing computer-based analysis of data that’s 
inputted.”  Thus, the bank concedes that the only “analysis” that is provided by 
Fiserv is the processing of data by computers in accordance with protocols that are 
written into the software.  It follows that Fiserv’s services are not “personal 
services” because they do not involve accounting-related services performed by 
individuals.  Therefore, Fiserv’s services do not fall within the services described 
by R.C. 5739.01(Y)(2)(a). 
{¶ 38} The record provides even less of a basis for construing Fiserv’s 
services as “professional services” under R.C. 5739.01(Y)(2).  Significantly, during 
the BTA hearing, Deters testified on cross-examination that Cincinnati Federal—
not Fiserv—had to provide its financial statements (what he termed a “call report”) 
to regulatory authorities, and he acknowledged that Fiserv could not provide that 
kind of certification because doing so would be “an audit service and to be an audit 
that’s different than accounting.  * * * Our [certified-public-accountant] firm can 
January Term, 2022 
 
15 
provide audit services.  A non [certified public accountant] could not provide an 
audit service.  They’re not licensed to do so.”  Deters thereby revealed that Fiserv’s 
alleged “accounting services” did not include any activities requiring professional 
licensure. 
{¶ 39} Because Fiserv did not furnish accounting services in the sense of 
services performed by individuals, and because Fiserv lacked the legal authority to 
provide professional accounting services that require licensure, this case does not 
present a “bundled transaction” when analyzed under R.C. 5739.01(Y)(2)(a).  As a 
result, the ADP and EIS provided by Fiserv are taxable sales, and R.C. 
5739.01(Y)(2)(a) does not apply to this situation.  Even though the BTA erred by 
treating R.C. 5739.01(Y)(2)(a) as a tax exemption, we affirm the BTA’s conclusion 
that Cincinnati Federal failed to prove it had purchased nontaxable accounting 
services from Fiserv. 
3.  The Genuine Parts case is not controlling 
{¶ 40} In its merit brief, Cincinnati Federal relies heavily on our decision in 
Genuine Parts Co. v. Limbach, 62 Ohio St.3d 93, 579 N.E.2d 486 (1991), to support 
its argument that Fiserv provides accounting services under R.C. 5739.01(Y)(2)(a).  
In that case, we reversed the BTA’s determination that the services at issue were 
taxable as ADP and computer services, because they were incidental or 
supplemental to the accounting and financial services that had been provided. 
{¶ 41} Cincinnati Federal analogizes Fiserv’s services to those provided in 
Genuine Parts, but the suggested parallel fails because the range of services that 
were at issue in Genuine Parts went well beyond the processing of accounting data.  
Indeed, in that case, the BTA noted that the service provider acted “as a full service 
bookkeeping, accounting, and tax department” for its customers.  Genuine Parts 
Co. v. Limbach, BTA No. 88-A-321, 1990 WL 211922, *1 (Nov. 2, 1990), rev’d, 
62 Ohio St.3d 93, 579 N.E.2d 486.  Although we reversed the BTA’s legal 
conclusion, we agreed with its factual findings, noting that the service provider in 
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Genuine Parts “reconciles bank statements and writes checks to pay [its 
customers’] invoices and employees” while also “inform[ing] [its customers] 
regarding tax law changes and answer[ing] individual questions regarding 
management, bookkeeping, and accounting functions.”  62 Ohio St.3d at 93.  By 
stark contrast, the record in the present case shows that Fiserv provided 
computerized data processing along with support for the computerized services, but 
it did not furnish the range of services at issue in Genuine Parts. 
{¶ 42} For the foregoing reasons, we affirm the board’s conclusion that 
Cincinnati Federal failed to prove that Fiserv provided nontaxable accounting 
services. 
E.  The evidentiary record contains support for the denial of Cincinnati 
Federal’s claim that it purchased nontaxable accounting services 
{¶ 43} Cincinnati Federal’s third proposition of law argues that the BTA’s 
decision is unreasonable and unlawful, because it is not supported “by any 
probative evidence” in the record.  This court “will reverse BTA findings only when 
there is a total absence of evidence to support a particular finding.”  HealthSouth 
Corp. v. Testa, 132 Ohio St.3d 55, 2012-Ohio-1871, 969 N.E.2d 232, ¶ 14. 
{¶ 44} Cincinnati Federal first challenges the BTA’s statement that Fiserv 
customized data, not software, for the bank.  2020 WL 7711533 at *3.  But this 
passage of the BTA’s decision is inconsequential because the BTA found that 
Fiserv did make modifications to its preexisting software in connection with 
serving Cincinnati Federal; and as this opinion has already discussed, this finding 
should have led the BTA to apply the true-object test. 
{¶ 45} Second, Cincinnati Federal contends that the BTA ignored expert 
and fact testimony indicating that Fiserv was providing accounting services.  But 
the witnesses’ characterization of the services as accounting services, though 
factually helpful, is not legally determinative.  An expert’s interpretation of the law 
is not admissible as such because the interpretation of the law is the province of the 
January Term, 2022 
 
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tribunal.  See State ex rel. Parisi v. Dayton Bar Assn. Certified Grievance Commt., 
2017-Ohio-9394, 103 N.E.3d 179, ¶ 29 (2d Dist.), aff’d, 159 Ohio St.3d 211, 2019-
Ohio-5157, 150 N.E.3d 43.  We reject Cincinnati Federal’s third proposition of law. 
III. CONCLUSION 
{¶ 46} For the foregoing reasons, we affirm the BTA’s rejection of 
Cincinnati Federal’s refund claim under R.C. 5739.01(Y)(2)(a).  As for the refund 
claim under R.C. 5739.01(Y)(2)(e), we vacate the BTA’s decision and remand this 
cause with the instruction that the BTA apply the true-object test to the service 
charges at issue. 
Decision affirmed in part 
and vacated in part, 
and cause remanded. 
O’CONNOR, C.J., and FISCHER, DONNELLY, STEWART, and BRUNNER, JJ., 
concur. 
DEWINE, J., concurs in judgment only, with an opinion joined by 
KENNEDY, J. 
_________________ 
DEWINE, J., concurring in judgment only. 
{¶ 47} I concur in the judgment of the majority.  But I write separately to 
express my disagreement with the majority’s apparent assumptions that the 
ordinary rules of statutory construction do not apply when it comes to tax 
exemptions and that taxpayers who argue for exemptions must meet an especially 
high burden.  In my view, the same rules of construction that apply to any other 
statute also apply to a statute that provides a tax exemption.  There is no justification 
for a judge-made rule that puts a thumb on the scale in favor of the government and 
against the taxpayer when a tax exemption is at issue. 
{¶ 48} Cincinnati Federal Savings & Loan Co. requested a tax refund on the 
basis that it had purchased customized software.  In denying the request, the Board 
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of Tax Appeals relied on the principles that “[e]xclusions are ‘strictly construed,’ ” 
BTA No. 2018-2247, 2020 WL 7711533, *3 (Dec. 22, 2020), quoting Satullo v. 
Wilkins, 111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, ¶ 15, and that “in 
all doubtful cases the exemption is denied,” id. at *3, citing Anderson/Maltbie 
Partnership v. Levin, 127 Ohio St.3d 178, 2010-Ohio-4904, 937 N.E.2d 547, ¶ 16.  
The majority accepts the BTA’s premise (that taxpayers who argue for an 
exemption face an uphill climb) but concludes that the principle does not apply here 
because the tax provision at issue is not an exclusion.  See majority opinion at  
¶ 18-19. 
{¶ 49} I take issue with the premise.  It is true that one can find in this 
court’s caselaw various statements suggesting that the deck is stacked against the 
taxpayer when it comes to statutes exempting property or transactions from 
taxation.  See, e.g., N.A.T. Transp., Inc. v. McClain, 165 Ohio St.3d 250, 2021-
Ohio-1374, 178 N.E.3d 454, ¶ 15 (the taxpayer has the burden to prove that the law 
“clearly expresses the exemption in relation to the facts of its claim”); 
Anderson/Maltbie Partnership at ¶ 16 (“laws that exempt property from tax * * * 
must be strictly construed”); Campus Bus Serv. v. Zaino, 98 Ohio St.3d 463, 2003-
Ohio-1915, 786 N.E.2d 889, ¶ 8 (same); Satullo at ¶ 15 (same); but see Columbia 
Gas Transm. Corp. v. Levin, 117 Ohio St.3d 122, 2008-Ohio-511, 882 N.E.2d 400, 
¶ 34 (“a statute that imposes a tax requires strict construction against the state, with 
any doubt resolved in favor of the taxpayer”). 
{¶ 50} But our responsibility is no different in interpreting a tax statute than 
any other statute: to apply the plain meaning of the statute as it would have been 
understood by an ordinary speaker of the English language at the time of the law’s 
enactment.  Unless the legislature has explicitly provided otherwise, the traditional 
rules of statutory construction apply. 
{¶ 51} The idea that special rules apply to tax exemptions seems to be a 
relic of 19th-century federal caselaw dealing with the Contracts Clause of the 
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United States Constitution and limitations on intrusions into state sovereignty.  See 
Scalia and Garner, Reading Law: The Interpretation of Legal Texts 359-363 (2012).  
Indeed, Scalia and Garner’s treatise devotes an entire chapter to dispelling “[t]he 
false notion that tax exemptions—or any others for that matter—should be strictly 
construed.”  Id. at 359.  As the treatise explains, the United States Supreme Court 
has largely abandoned the notion that tax statutes should be treated different than 
other legislative enactments.  Id. at fn. 5 and 6.  We should do the same. 
{¶ 52} Rather,  
 
[l]ike any other governmental intrusion on property or personal 
freedom, a tax statute should be given its fair meaning, and this 
includes a fair interpretation of any exceptions it contains.  So when 
one statutory provision imposes a categorical tax, any exception 
imported by another provision must be clear.  But it can be clearly 
implied, no less than clearly expressed, and the terms of the 
exception ought to be reasonably, rather than strictly, construed. 
 
Id. at 362. 
{¶ 53} The state’s sales-tax regime does provide some interpretative 
guidance. R.C. 5739.02(C) says: “For the purpose of the proper administration of 
this chapter, and to prevent the evasion of the tax, it is presumed that all sales made 
in this state are subject to the tax until the contrary is established.”  See also R.C. 
5741.02(G) (same for use tax).  But this simply means that the taxpayer bears the 
burden to establish that a sales transaction is nontaxable.  Basic Inc. v. Levinson, 
485 U.S. 224, 245, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988) (“presumptions are also 
useful devices for allocating the burdens of proof between parties”).  Nothing in the 
statute changes the ordinary rules of construction.  Tax statutes should be read 
through a clear lens, not one favoring tax collection. 
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{¶ 54} Ultimately, I agree with the majority that this case should be 
remanded to the BTA to apply the true-object test to Cincinnati Federal’s claim for 
a refund under R.C. 5739.01(Y)(2)(e).  I also agree that the BTA was correct in 
denying Cincinnati Federal’s refund claim under R.C. 5739.01(Y)(2)(a).  But I 
reject the majority’s implicit assumption that special rules of construction 
disfavoring taxpayers apply in cases involving tax exemptions. 
KENNEDY, J., concurs in the foregoing opinion. 
_________________ 
 
Mann & Mann, L.L.C., David S. Mann, and Michael T. Mann, for appellant. 
 
Dave Yost, Attorney General, and Christine Mesirow, Assistant Attorney 
General, for appellee. 
_________________