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appealappellant

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Kilbane v. Director of Dept. of Revenue, 544 S.W.2d 9

Facts

The taxpayer operated a dental laboratory where he manufactured crowns and bridgework based on prescriptions from dentists. He purchased materials for these items and paid sales tax on them but did not report sales tax on the crowns and bridgework sold to dentists. In 1975, the Director of Revenue assessed sales tax on these sales from 1971 to 1974, which the taxpayer contested. The assessment was upheld through various hearings and ultimately led to this appeal.

Appellant operates a dental laboratory in which he makes crown and bridgework pursuant to orders received from dentists.

Issue

Whether the sales of crowns and bridgework made for and sold to dentists are considered retail sales subject to sales tax under the amended definition of 'Sale at Retail'.

The sole issue for determination on appeal is whether such purchases by dentists are sales at retail within the definition thereof contained in s 144.010.1(9).

Rule

The amended definition of 'Sale at Retail' includes purchases of tangible personal property made by licensed physicians, dentists, and veterinarians for use in their professional practice, which are deemed to be for use or consumption and not for resale.

Purchases of tangible personal property made by duly licensed physicians, dentists and veterinarians and used in the practice of their professions shall be deemed to be purchases for use or consumption and not for resale.

Analysis

The court analyzed the legislative intent behind the 1947 amendment to the Sales Tax Act, which clarified that purchases by dentists for use in their practice are taxable. The court found that the items sold, crowns and bridgework, are indeed used by dentists in their professional practice, thus falling under the taxable category. The court rejected the taxpayer's argument that the new language applied only to items purchased from supply houses and emphasized that the amendment intended to include all tangible personal property used in the practice of dentistry.

Clearly, the dentist uses crowns and bridgework in the practice of his profession, just as does a surgeon use in his practice a pin which he inserts in a fractured bone or an artificial joint which he uses to replace a damaged or improperly functioning joint.

Conclusion

The Supreme Court affirmed the assessment of sales tax on the crowns and bridgework sold by the taxpayer, concluding that these sales are subject to sales tax as they are considered retail sales under the amended law.

We hold that Berry-Kofron is not authority for exempting appellant's purchases of crowns and bridgework from sales tax under the existing act and is not to be followed in construing coverage by the present act.

Who won?

The Director of Revenue prevailed in the case as the court upheld the sales tax assessment, reasoning that the sales of crowns and bridgework to dentists are taxable under the amended definition of 'Sale at Retail'.

The Director of Revenue made an assessment of sales tax on bridgework and crowns sold by appellant between January 1, 1971, and March 30, 1974.

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