Court Opinion

ID: 6763797
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:34:20.794926+00
Date Added: 2024-06-11T16:02:39.950342
License: Public Domain

Wright, J.,
dissenting. I dissent because I find the majority’s interpretation of the scope of R.C. 5739.01 to be broader than intended by the General Assembly.
The majority opinion considers the transactions in question to be taxable because they fall under the portion of R.C. 5739.01(Y)(1) that defines automatic data processing and computer services to include “providing access to computer equipment for the purpose of processing data or examining or acquiring data stored in or accessible to such computer equipment.” Although I agree that a plain reading of that phrase alone would seem to encompass appellant’s activities, I find that a reading of the entire statute does not support the conclusion that providing stock quotations electronically is a taxable transaction.
In analyzing whether a particular activity is a taxable service transaction, it is necessary to consider first whether “the true object of the transaction is the *451receipt by the consumer of automatic data processing or computer services rather than the receipt of personal or professional services to which automatic data processing or computer services are incidental or supplemental.” R.C. 5739.01(B)(3)(e). In the BTA decision and order from which Quotron appealed, the BTA specifically agreed with Quotron’s assertion that the true object of the transaction is instant access to financial price information, not the provision of data processing or computer services. Board of Tax Appeals Decision and Order (Nov. 23, 1990), at 8. The BTA concluded, however, that the transaction is nevertheless taxable because (1) it does not fall within the personal or professional service exemptions because the transaction does not involve “cognitive thought,” id. at 7, (2) the customer’s true object is “singularly met and satisfied by and through a taxable service,” id. at 8, (3) the customer’s true object could not be realized or attained without the examination and acquisition of data stored in or made accessible by Quotron’s computer, id., and (4) the statutory definition of data processing and computer services in R.C. 5739.01(Y)(1) is a “mirror perfect” description of Quotron’s services, id. at 9. These reasons, which the majority appears to have accepted without comment, appear to result in an unwarranted and unfair expansion of the state’s taxing authority to include most services that are accomplished electronically.
Consider for a moment a service with which most of us are familiar — access to a banking account through an automatic teller machine (“ATM”). Applying the BTA’s reasoning to that service, an ATM transaction for which a customer is charged would be a taxable automatic data processing and computer service. The transaction is entirely performed by computer; there is no “cognitive thought.” Thus, the ATM transaction would not fall within the personal and professional service exemptions in R.C. 5739.01(Y)(2) as narrowly interpreted by the BTA. The true object, instant access to account data, is singularly met and satisfied through a taxable service that can be accomplished only through the examination of data in a bank computer. Additionally, R.C. 5739.01(Y)(1), when read outside the context of the entire statute, is a mirror-image description of an ATM transaction. Thus, under the reasoning adopted by the board and implicitly accepted by the majority, a sales tax should be imposed upon every ATM transaction for which a customer is charged.
A statute should be construed as a whole, not by examining selective phrases. Dupps Co. v. Lindley (1980), 62 Ohio St.2d 305, 307, 16 O.O.3d 354, 356, 405 N.E.2d 716, 718. Accord R.C. 1.42 and 1.47. If R.C. 5739.01 is read in its entirety, it is clear that its provisions are directed to the taxation of a sale of access to a computer, not the taxation of a service that happens to permit the customer access to selected data through the employment of *452computer technology. The basis for taxing a service should not rest on whether the provider has chosen to meet the customer’s demand for instant access by permitting access to its computer. Indeed, had Quotron chosen to broadcast the same data to local terminals equipped with software designed to generate locally accessible displays, the majority would have had a difficult time justifying the taxation of the broadcast information because customer access to Quotron’s computer would have been lacking. I find it inconceivable that the legislature intended the determination of whether a certain transaction is taxable to turn on whether the service is provided through a certain manner of electronic communication.
Because I cannot believe that the legislature intended that R.C. 5739.01 be interpreted so broadly as to encompass transactions in which a supplier of information uses a computer as a communication device, I dissent from the majority opinion. I hope the General Assembly will address this issue to narrow the scope of the state’s tax laws with respect to the use of modern technology, and correct the BTA’s and the majority’s mistaken interpretation.