             OPINIONS OF THE SUPREME COURT OF OHIO
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CCH Computax, Inc., Appellant, v. Tracy, Tax Commr., Appellee.
[Cite as CCH Computax, Inc. v. Tracy (1993),        Ohio
St.3d      .]
Taxation -- Sales and use taxes -- Services of automatic data
      processing company that sorts, classifies and rearranges
      information from professional tax preparers and then
      mechanically prints tax returns which are sold to the tax
      preparers are taxable -- R.C. 5739.01(Y), applied -- R.C.
      5739.01(E)(1) exemption, applied.
      (No. 92-1453 -- Submitted April 29, 1993 -- Decided
December 29, 1993.)
      Appeal from the Board of Tax Appeals, No. 88-D-566.
      Appellant, CCH Computax, Inc. ("Computax"), conducts its
business with professional tax preparers, such as lawyers or
accountants, and does not engage in business directly with tax
preparers' clients. Computax obtains information from the tax
preparers, transcribes such information into computer language
and uses its data processing machine system and programs to
mechanically sort, classify and rearrange the information. It
then prepares tax returns and related schedules for tax
preparers, based upon information supplied by the tax
preparers' clients, the taxpayers.
      For the audit period, July 1, 1983 to November 30, 1985,
the Tax Commissioner levied a use tax assessment of $514,638.81
against Computax, and the assessment was affirmed upon appeal
by the Board of Tax Appeals ("BTA").
      In its appeal to this court, Computax asserts three
grounds for reversal of the BTA's decision: (1) Computax does
not provide taxable automatic data processing or computer
services pursuant to R.C. 5739.01(B)(3)(c) or (Y), but,
instead, it furnishes personal or professional services that
are exempted from sales and use taxes by R.C. 5739.01(B)(5) and
5741.02(C)(2); (2) the benefit of Computax's personal or
professional services is "resold in the same form in which it
is received by the customers," and thus is excepted by R.C.
5739.01(E); and (3) approximately two-thirds of the returns
Computax prepares are for individual taxpayers and,
accordingly, are not taxable because they are not provided for
use in business by Computax's customers.
     The cause is now before this court upon an appeal as of
right.

     Porter, Wright, Morris & Arthur and George M. Hauswirth,
for appellant.
     Lee I. Fisher, Attorney General, and Barton A. Hubbard,
Assistant Attorney General, for appellee.

     Per Curiam. The decision of the BTA is affirmed in part
and reversed in part.
     Although this is a use tax assessment only and not a sales
tax assessment, by reason of R.C. 5741.02(C)(2) tax liability
is determinable under sales tax statutes.
     As to the first issue, set forth supra, the BTA decision
is neither unreasonable nor unlawful and it is affirmed. The
relevant statutes, R.C. 5739.01(B)(3)(e) and 5739.01(Y), in
their several iterations and as pertinent, defined automatic
data processing and computer services ("ADP services"), taxed
ADP services, and granted exemption from taxation in certain
instances.
     R.C. 5739.01(Y) defined ADP services to mean "processing
of others' data" and providing "access to computer equipment"
for the purpose of "processing data or examining or acquiring
data stored in or accessible to such computer equipment." ADP
services did not include personal or professional services,
which were later defined as, inter alia, accounting or legal
services, or any situation where the service provider receives
data or information and studies, alters, analyzes, interprets
or adjusts it. R.C. 5739.01(Y)(2), 140 Ohio Laws, Part I,
233-234.
     Therefore, during the audit period, taxable ADP services
included transactions in which such services are provided for
use in business when the true object of the transaction is the
receipt by the consumer of ADP services, rather than the
receipt of personal or professional services to which ADP
services are incidental or supplemental.
     The BTA found that Computax sorts, classifies and
rearranges information and then mechanically prints tax returns
and appropriate schedules which are sold to its customers. The
BTA concluded that Computax provided "[n]o potentially
consequential professional or personal tax advice or tax return
preparation services" (emphasis deleted) and that the services
it furnished were taxable.
     Based upon the record, and in conformity with our
responsibility in reviewing BTA decisions, as set forth in SFZ
Transp., Inc. v. Limbach (1993), 66 Ohio St.3d 602, 613 N.E.2d
1037, we agree with the BTA that the true object of these
transactions was ADP services and not professional or personal
services.
     Because this appeal deals with the sale of ADP services
and not tangible personal property, and because the applicable
statutes define personal or professional services, Emery
Industries, Inc. v. Limbach (1989), 43 Ohio St.3d 134, 539
N.E.2d 608, is inapposite. ComTech Sys., Inc. v. Limbach
(1991), 59 Ohio St.3d 96, 98-99, 570 N.E.2d 1089, 1092.
     As to the second issue, Computax claims exemption from
taxes under R.C. 5739.01(E)(1) because the benefit of its
services is resold in the same form in which it is received by
the customer.
     The BTA rejected the contention, stating, "[t]he printed
materials supplied by Computax to its customers are not resold
in the same form as received by Computax's customer. * * *"
The BTA found that Computax's customer (the tax preparer) signs
the tax return (prepared by Computax), making it
"significantly" different from the return prepared by Computax
"as a matter of fact and law."
     Computax argues that its customers transfer the completed
tax form received from Computax to their own taxpayer-client,
billing the client for Computax's services as an expense.
Thus, Computax contends, the tax form is "resold" to the
taxpayer in the same form as received.
     The tax preparer's signature on the return may have
increased the value of the return, but there is no evidence
that the state or form of the return was changed. The BTA's
finding to the contrary is unreasonable. See M.S. Osher, M.D.
& R.S. Kerstine, M.D., Inc. v. Limbach (1992), 65 Ohio St.3d
312, 603 N.E.2d 997.
     We observed earlier that this appeal involves the sale of
ADP services rather than tangible personal property. The
proper focus for the BTA in considering this issue was the
precise language of R.C. 5739.01(E). During the audit period,
the statute excepted from the definition of "[r]etail sale"
(thus creating an exemption from sales or use tax) sales "in
which the purpose of the consumer [the tax preparer] is:
     "(1) To resell the * * * benefit of the service provided
in the form in which the same is, or is to be, received by
him[.]" See 140 Ohio Laws, Part II, 3216.
     The BTA's failure to properly analyze and apply the
applicable statute to the actual procedure employed by Computax
was unreasonable and unlawful. Consequently, this decision of
the BTA is reversed.
     As to the third issue, the BTA found:
     "From the record, it is evident that the automatic data
processing and computer printout materials which were provided
by Computax to its tax service provider customers were in fact
'used in business' by such customers in the process of
providing tax services to their clients and are subject to Ohio
use tax * * *." (Emphasis added.)
     That specific rejection of Computax's claim is neither
unreasonable nor unlawful and the BTA's decision is affirmed.
                                    Decision affirmed in part
                                    and reversed in part.
     Moyer, C.J., A.W. Sweeney, Douglas, Wright, Resnick, F.E.
Sweeney and Pfeifer, JJ., concur.
