Holbrook v. Healthport, Inc.
2014 Ark. 146
| Ark. | 2014Background
- Holbrook, a representative plaintiff, sought to recover taxes and damages for sale of her medical records.
- Healthport contracted to fulfill medical-records requests and billed Holbrook for copies, including sales tax.
- Holbrook paid two tax-inclusive invoices to Healthport after records were provided.
- Holbrook filed a class-action alleging DTPA violation, unlawful sales tax, and unjust enrichment.
- The circuit court granted partial summary judgment for Healthport and DF&A, holding copies of records were taxable as sales of tangible personal property; Holbrook appealed.
- The supreme court affirmed, concluding the gross receipts tax applies and no exemption under §16-46-106 or isolated-sales provision applies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether gross receipts tax applies to copies of medical records | Holbrook argues no tax should apply | Healthport/DF&A argue statute clearly subjects sale of copies to tax | Tax applies to the sale of copies |
| Whether isolated sales exemption precludes taxation | Exemption creates absurd result | Exemption applies to all isolated sales | Isolated-sales exemption does not exempt here |
| Whether §16-46-106 exempts medical-records from taxation | Statute does not authorize tax collection | DF&A interpretation consistent with statute | No exemption under §16-46-106; taxation valid |
Key Cases Cited
- Brock v. Townsell, 309 S.W.3d 179 (2009 Ark.) (statutory-interpretation deference to court’s construction)
- Cave City Nursing Home, Inc. v. Ark. Dep’t of Hum. Servs., 89 S.W.3d 884 (2002 Ark.) (plain-language interpretation preferred; avoid absurd results)
- Gaddy v. DLM, Inc., 609 S.W.2d 6 (1980 Ark.) (reasonable-constitutional-interpretation requirement for tax statutes)