TECHNICAL ASSISTANCE ADVISORY 94-006SUBJECT: CONSUMERS SALES AND USE TAXES -- DENTAL LABORATORIES: Sales of dental prosthetics by a dental laboratory pursuant to a work authorization issued under W. Va. Code § 30-4-2a and delivered to dentists after October 15, 1994, are exempt from consumers sales and use taxes under W. Va. Code § 11-15-9(n). The West Virginia Dental Association ("Dental Association") requested issuance of a Technical Assistance Advisory, under W. Va. Code § 11-10-5r, regarding the treatment of a West Virginia dentist's procurement, receipt and utilization of prosthetics from a dental laboratory for purposes of the consumers sales and use taxes imposed, respectively, by articles 15 and 15A, chapter 11 of the West Virginia Code. This Technical Assistance Advisory is issued after additional correspondence and conversation with you concerning this issue. Material facts submitted for purposes of this ruling request are set out below.FACTS The practice of dentistry involves the use of prosthetic appliances, including dentures, crowns, bridges and other appliances, in treating patients. Dentists often utilize dental laboratories to make, produce, construct, repair, alter, or restore dental prosthesis. All such work is done pursuant to a "work authorization," as defined in W. Va. Code § 30-4-2a. The dental laboratories, in turn, charge a fee for the dental technological work. Customary fees are not itemized by materials, labor and other costs. Historically, dentists have paid West Virginia consumers sales tax when dental technological work is purchased from a West Virginia dental laboratory, including one operated by another dentist, and paid use tax when the dental technological work is purchased from an out-of-state dental laboratory. The issue presented for ruling is whether or not fees paid by dentists for dental technological work performed pursuant to a § 30-4-2a work authorization are exempt from consumers sales and use taxes.DISCUSSION The Dental Association contends that payments to dental laboratories for dental technological work are exempt from consumers sales and use taxes under two separate exemptions or exceptions. First, the procurement of dental prosthesis, in accordance with the Dental Practices Act, is exempt from consumers sales and use taxes as a sale of an appliance upon prescription of a dentist. The Dental Association's second contention is that, if the dental technological work is provided by a certified dental technical ("CDT"), or an entity acting through a certified dental technician, the transaction is an exempt professional service.A. GENERAL The consumers sales tax is imposed and collected under the provisions of article 15, chapter 11 of the West Virginia Code. A compensating use tax is imposed and collected under the provisions of article 15A, chapter 11 of the West Virginia Code. These tax laws are intended to be "complimentary laws and, wherever possible, be construed and applied to accomplish such intent as to the imposition, administration and collection of such taxes." W.
Va. Code § 11-15-1a (legislative findings). Generally, a transaction with a West Virginia vendor which is exempt from consumers sales tax law, will also be exempt from use tax when the vendor is located in another state. See W. Va. Code § 11-15A-3 (exemptions from use tax). Consequently, if we conclude that the subject transactions are exempt from consumers sales tax, they will also be exempt from use tax. For this reason, our discussion will focus primarily on the consumers sales tax law.The taxing statute imposes a general consumers sale and service tax. W. Va. Code §
11151. It applies to all sales of tangible personal property and to the furnishing of all services unless a specific exception or exemption applies.The term "service" is defined in W. Va. Code § 11-15-2(r)  to include: "all nonprofessional activities engaged in for other persons for a consideration, which involve the rendering of a service as distinguished from the sale of tangible personal property, but does not include contracting, personal services or the services rendered by an employee to his employer or any service rendered for resale." W. Va. Code § 11-15-8 additionally provides: "The provisions of this article shall apply not only to selling tangible personal property, but also to the furnishing of all services, except professional and personal services, and except those services furnished by corporations subject to the control of the public service commission." Specific exemptions from tax are found in W. Va, Code § 11-15-9(a) through (pp)  and § 11-15-11 (exemption sales of services by certain 501(c)(3) organization) . W. Va. Code § 11-15-6 provides that "it shall be presumed that all sales and services are subject to the tax until the contrary is clearly established." In the face of such a presumption, the taxpayer has the burden of establishing that taxpayer is not subject to the tax. Wooddell v. Dailey, 160 W. Va. 65, 230 S.E. 2d 466, 468 (1976).B. SECTION 11-15-9(n) EXEMPTION W. Va. Code § 11-15-9(n) exempts from consumers sales tax "[s]ales of drugs dispensed upon prescription and sales of insulin to consumers for medical purposes." The term "drugs" is defined in § 11-15-2(f)  to include "all sales of drugs or appliances to a purchaser, upon prescription of a physician or dentist and any other person licensed to prescribe." The Dental Association argues that the highly regulated "work authorization" prepared by the dentist, as provided in W. Va. Code § 30-4-2, and pursuant to which dental technological work is done, must be construed as a prescription for dental technological work; that a dental prosthesis is an "appliance" as that term is used in § 11-15-2(q); and that a dentist purchasing a dental prosthesis is a "purchaser" within the meaning of § 11-15-9(n). Accordingly, the purchase of a dental prosthesis from a dental laboratory is the purchase of a drug pursuant to a prescription and is exempt from consumers sales tax under § 11-15-9(n). 1. Is a § 30-4-2A Work Authorization a Prescription? The term "work authorization" is defined in W. Va. Code § 30-4-2aA to mean: "a written order for the dental technological work, as herein defined, which has been issued by a licensed dentist of this state or other dental practitioner and contains the information specified in, and otherwise conforms to the requirements of, subsection 'F' of this section." Each work authorization issued under § 30-4-2a must contain the following information: "(1) The name and address of the dental laboratory to which it is directed; (2) the case identification; (3) a specification of the materials to be used; (4) a description of the work to be done, and, if necessary, diagrams thereof; (5) the date of its issue; and (6) the signature and address of the licensed dentist or other dental practitioner by whom the work authorization is issued." W. Va. Code § 30-4-2aF. A separate work authorization must be issued for each patient of the issuing licensed dentist or other dental practitioner for whom dental technological work is to be performed. W.
Va. Code § 30-4-2aF. Each work authorization must be issued in duplicate. The original must be delivered to the dental laboratory to which it is directed, where it must be retained for a period of two years from the date of its issuance. The copy must be retained by the licensed dentist or other dental practitioner by whom it was issued for a like period of two years. W.
Va. Code § 30-4-2aG. It is a crime to sell any dental prosthesis or other dental technological work to any person who is not a licensed dentist or other dental practitioner. W.
Va. Code § 30-4-2aE. Any violation of § 30-4-2a is a misdemeanor. W. Va. Code §
3042aJ.The term "prescription" used in the statutory definition of "drugs" is not defined in the consumers sales tax law. The absence of such a definition makes it impossible to conclude that § 11-15-9(n) is clear and unambiguous and should be applied and not construed. See Wooddell v. Dailey, supra, at 469 (S.E.2d). Regulations for the consumers sales tax law are also silent. In interpreting statutes such as this, the West Virginia Supreme Court of Appeals is guided by and applies the following principles of statutory construction: "(1) Effect should be given to the spirit, purpose and intent of the lawmakers without limiting the interpretation in such a manner as to defeat the underlying purpose of the statute; See Tax Comm'r v. Veterans of Fgn. Wars, supra; "(2) Each word of a statute should be given some effect and a statute must be construed in accordance with the import of its language; See Wilson v. Hix, 136 W. Va. 59, 65 S.E.2d 717 (1951), and Fielder and Turley v. Adams Express Co., 69 W. Va. 138, 71 S.E. 99 (1911); "(3) Undefined words and terms used in a legislative enactment will be given their common, ordinary and accepted meaning; See Davis v. Hix, 140 W. Va. 398, 80 S.E.2d 404 (1954), and Miners c. Hix, 123 W. Va. 637, 17 S.E.2d 810 (1941); and "(4) If technical words are involved, they will be presumed to have been used in a technical sense and will ordinarily be given their strict meaning; See Lane v. Board of Education of Lincoln County, 147 W. Va. 737, 131 S.E.2d 105 (1963)." Wooddell v. Dailey, supra, at 469 (S.E.2d). Accordingly, undefined terms used in § 11-15-2(f) and § 11-15-9(n) must be given their common, ordinary and accepted meaning in the context in which the term is used. Webster's Third New International Dictionary defines "prescription" to mean: "5a (1) : a written direction for preparation, compounding, and administration of a medicine (2) : a prescribed remedy b : a written formula for the grinding of corrective lenses for eyeglasses c : a written direction for the application of physical therapy measures (as directed exercise or electrotherapy) in cases of injury or disability[.]" Federal law recognizes a § 30-4-2a work authorization as a prescription. 18 U.S.C. § 1821 make it a crime to "use the mails or any instrumentality of interstate commerce for the purpose of sending or bringing into any State or Territory any set of artificial teeth or prosthetic dental appliance or other denture, constructed from any cast or impression made by any person other than, or without the authorization or prescription of, a person licensed to practice dentistry under the laws of the place into which such denture is sent or brought, where such laws prohibit; "(1) the taking of impressions or casts of the human mouth or teeth by a person not licensed to under such laws to practice dentistry; "(2) the construction or supply of dentures by a person other than, or without the authorization or prescription of, a person licensed under such laws to practice dentistry; or "(3) the construction or supply of dentures from impressions or casts made by a person not licensed under such laws to practice dentistry[.]" In United States v. Patterson, 155 F.Supp. 669 (D.C.N.D.Ill.E.D. 1957), the court examined 18 U.S.C. § 1821 and concluded that in applying the phrase "without authorization or prescription of, a person licensed to practice dentistry" "the word 'authorization' must be understood as ejusdem generis with the word 'prescription.'" Id., at 673. W. Va. Code § 30-4-2a meets the criteria of 18 U.S.C. § 1821. Therefore, it is a federal crime to use the mails or any instrumentality of interstate commerce to send into, or to bring into, West Virginia any set of artificial teeth or prosthetic dental appliance or other denture except pursuant to a § 30-4-2a work authorization. Based upon the preceding discussion, we conclude that the word "prescription," as used in § 11-15-9(n), includes a work authorization issued pursuant to § 30-4-2a. 2. Is a Dental Prothesis an Appliance? We next consider whether or not a dental prosthesis is an appliance within the meaning of § 11-15-2(f). The term "appliance," as used in the statutory definition of "drug" is not defined in the consumers sales tax law, or by regulation. It must also be given its common, ordinary and accepted meaning in the context in which the term is used in § 11-15-2(f). Webster's Third New International Dictionary defines "appliance" to mean: "1. the act of applying or using : application 2. something applied to a purpose or use : as a : device. measure, stratagem b : a piece of equipment for adopting a tool or machine to a special purpose : accessory, fixture, attachment c : a tool, instrument, or device specifically designed for a particular use : apparatus d : a household or office utensil, apparatus, instrument, or machine that utilizes a power supply, esp. electric current (as a vacuum cleaner, a refrigerator, a toaster, an air conditioner[.]" Stedman's Medical Dictionary, Fifth Unabridged Lawyer's Edition, defines "appliance" as: "A device used to provide function to a part, or for therapeutic purposes." Finally, "dental prosthesis" is defined in the Dental Practices Act, W. Va. Code § 30-4-2aA, to mean: "any prosthetic denture, crown, bridge, or other prosthetic appliance to be used in, upon, or in connection with, or as a substitute for, any human tooth, or in, upon, or in connection with, the human jaw or associated structure or tissue of the human mouth, or in the treatment of any condition thereof[.]" Based upon the preceding discussion, we conclude that a dental prosthesis is an "appliance" as that term is used in the definition of "drugs" in W. Va. Code § 11-15-2(f). 3. Is a Dentist a Purchaser of Drugs Dispensed Upon Prescription When the Dentist Purchases a Dental Prosthesis? We next consider whether or not a dentist may assert the § 11-15-9(n) exemption when the dentist purchases from a dental laboratory a dental prosthesis made for a particular patient pursuant to and in conformity with the dentist's work authorization issued under § 30-4-2a. The statutory definition of "drugs" includes "all sales of drugs or appliances to a purchaser, upon prescription of a physician or dentist and any other professional person licensed to prescribe." The question becomes whether or not a dentist is a purchaser of a drug dispensed upon prescription of a person licensed to prescribe, within the meaning of § 11-15-2(f), when the dentist purchases from a dental laboratory a dental prosthesis manufactured pursuant to the dentist's § 30-4-2a work authorization? "Purchaser" is defined in § 11-15-2(q) to mean "a person who purchases tangible personal property or a service taxed by this article." W. Va. Code § 30-4-2aE makes it unlawful for any person other than a licensed dentist or other dental practitioner to sell any dental prosthesis or other dental technological service to any person who is not a licensed dentist or other dental practitioner; and § 30-4-2aC makes it unlawful for any person not a licensed dentist or other dental practitioner, or any person working under their direct and personal supervision, to perform dental technological work except pursuant to and in conformity with a work authorization. Generally, the physician or other person licensed to prescribe writes the prescription and gives it to the patient who then purchases the item described in the prescription and begins using or consuming the item without the service of the person who issued the prescription. This is not generally the rule with a dental prosthesis which requires further services of the dentist before the prosthesis can be worn by the patient. Based upon the preceding discussion, we conclude that a dentist who purchases dental prosthetics manufactured for a particular patient pursuant to a § 30-4-2a work authorization is making a purchase of a drug dispensed upon prescription of a person licensed to prescribe within the meaning of § 11-15-2(f) and the purchase is exempt from tax under § 11-15-9(n). We observe, however, that the exemption in § 11-15-9(n) is for "sales of drugs dispensed upon prescription" -- sales of tangible personal property, and that this exemption does not apply when the true object or the § 30-4-2A work authorization is a service, which includes, but is not limited to, repair of a dental prosthesis.C. PROFESSIONAL SERVICES EXEMPTION The second contention of the Dental Association is that services provided by or under the direct supervision of a certified dental technician are excepted from consumers sales and use taxes under W. Va. Code §§ 11-15-2(s) and 11-15-8, which except professional services from tax. W. Va. Code § 11-15-2(s)  provides: "(s) 'Service' or 'selected service' includes all nonprofessional activities engaged in for other persons for a consideration, which involves the rendering of a service as distinguished from the sale of tangible personal property, but shall not include contracting, personal services or services rendered by an employee to his employer or any service rendered for resale. W. Va. Code § 11-15-8 also excepts professional services from consumers sales tax. It reads: "The provisions of this article shall apply not only to selling tangible personal property, but also to the furnishing of all services, except professional and personal services, and except those services furnished by corporations subject to the control of rthe public service commission." The consumers sales tax law does not define the term "professional services", and legislative rules are silent on whether or not certified dental technicians render "professional services." See 110 C.S.R. 15. § 8.1.1 . In West Virginia, the practice of dentistry is regulated under article 4, chapter 30 of the West Virginia Code (Dental Practices Act). That Act describes and regulates: (1) the practice of dentistry, (2) the practice of dental hygiene, and (3) the provision of dental technological work by a dental laboratory. The relationship between a dentist and a dental laboratory, and the method by which prosthetics are dispensed are governed by W. Va. Code § 30-4-2a. "The practice of dentistry as a profession is subject to regulation because of its relationship with public health. A dental technician who repairs prosthetic dentures is not a professional person but a craftsman. The skill of a dental technician engaged in defendant's line of work [repair of false teeth] is similar to that of a skilled mechanic, and he is sometimes called a dental mechanic. The authorities are not uniform with regard to the right to regulate the repairing of false teeth as the practice of dentistry. The weight of authority, however, supports the proposition that the legislature may control the repairing of false teeth on such ground because of its effect on public health, under the police powers of the state, but in cases that hold that the repairing of false teeth as practicing dentistry it is specifically contained in the statute defining the practice of dentistry, and such statutes have been held to be constitutional." West Virginia Board of Dental Examiners v. Storch, 146 W. Va. 662, 122 S.E.2d 295, 301 (1961). The court went on to write: "That the defendant was engaged in a trade or occupation cannot be denied in this case, because he had been engaged as a dental technician, a technical occupation and not a profession, for over a period of forty years." Id. The practice of dentistry is defined in W. Va. Code § 30-4-2 as follows: Any person shall be regarded as practicing dentistry within the meaning of this article, who shall diagnose or profess to diagnose or treat or profess to treat, any of the diseases or malformations or lesions of the oral cavity, teeth, gums, or maxillary bones, or shall prepare or fill cavities in human teeth, correct malposition of teeth or jaws or supply artificial teeth as substitutes for natural teeth, or administer anesthetics, general or local, in connection with any of said work, or shall make, produce, reproduce, construct, repair, alter, or restore any prosthetic denture, crown, bridge, or other prosthetic appliance to be used in, upon, in connection with the human jaw or associated structure or tissue of the human mouth, or to be used in the treatment of any condition thereof, or perform any other work included in the curriculum of recognized dental colleges. ...[T]his section [30-4-2]: (1) Shall not apply to a duly licensed physician or surgeon in the practice of his profession when rendering dental relief in emergency cases, unless he undertakes to reproduce or reproduces lost parts of human teeth, or to restore or replace lost or missing teeth in the human mouth. (2) Shall not apply to a dental laboratory in the performance of dental technological work as that term is defined in section two-a of this article so long as the dental laboratory, in the performance of such work, conforms in all respects to the requirements of section two-a of this article, and further shall not apply to persons performing dental technological work, as so defined, under the direct and personal supervision of a person authorized under the authority of this article to perform any of the acts in this article defined to constitute the practice of dentistry so long as such work is performed in connection with, and as part of, the dental practice of such licensed dentist or other authorized person and for his dental patients. (Emphasis supplied.) (3) Shall not apply to students enrolled in and regularly attending any dental college recognized by the state board of dental examiners, provided their acts are done in said dental college and under the direct and personal supervision of their instructor. (4) Shall not apply to licensed or registered dentists of another state temporarily operating a clinic under the auspices of a duly organized and reputable dental college or reputable dental society, or to one lecturing before a reputable society composed exclusively of dentists. (5) Shall not apply to licensed dental hygienists or dental assistants in the performance of their duties as otherwise provided by law. (6) Shall not apply to the practice of dentistry by dentists whose practice is confined exclusively to the service of the United States army, the United States navy, the United States public health service, or the united States veteran's bureau, or any other authorized United states government agency or bureau. "Other dental practitioner" is defined in W. Va. Code § 30-4-2aA to "mean and include those persons excluded from the definition of the practice of dentistry under the provisions of subsections three [dental college students], four [certain dentists licensed or registered in another state] and six [dentists employed by the United States government] of section two of this article and also those persons who hold temporary permits to practice dentistry or teaching permits which have been issued to them under the provisions of section five [30-4-5] of this article[.] By not including dental technicians within the statutory definition of "other dental practitioner," the West Virginia Dental Practices Act does not recognize the services of a dental technician as professional services. The Dental Association argues, however, that even though dental technological services are not recognized as professional services by the West Virginia Legislature, the Tax Commissioner should recognize them as professional services when they are furnished by, or under the direct personal supervision of a dental technician certified by the National Board for Certification in Dental Laboratory Technology, Inc. The National Board for Certification in Dental Laboratory Technology, Inc. (National Board) establishes educational and experimental criteria for certified dental technicians. The National Board administers examinations for competency and establishes continuing education requirements. The National Board oversees a disciplinary policy that applies to certified dental technicians. After review of West Virginia law and information pertaining to the certified dental technician program which the Dental Association furnished, we cannot agree with this second contention of the Dental Association.RULINGS After due consideration of the facts presented and application of current law, we make the following rulings: 1. When a dentist purchases, from a dental laboratory, a dental prosthesis for a particular patient which is manufactured by the dental laboratory pursuant to and in conformity with that dentist's work authorization issued under W. Va. Code § 30-4-2a, that purchase is exempt from consumers sales and use taxes under W.
Va. Code § 11-15-9(n).2. The preceding ruling shall be applied prospectively to sales of dental prosthetics delivered to dentists after October 15, 1994. 3. When the true object of a § 30-4-2a work order is for a service as distinguished from the sale of tangible personal property, the exemption provided in § 11-15-9(n) does not apply because its application is limited to sales of tangible personal property which are drugs as defined in § 11-15-2(f). 4. Services rendered by dental technicians, including services rendered by dental technicians certified by the National Board for Certification in Dental Laboratory Technology, Inc., are not professional services exempt from consumers sales and use taxes under W. Va. Code § 11-15-8. The conclusions reached in this technical assistance advisory are based upon the facts submitted and application of current law. In the event there is a material change in the facts, or if it is determined that material facts were omitted or are materially different from those furnished to us for purposes of this ruling, or there is a material change in the applicable law, the conclusions reached in this advisory may no longer apply. Declaration of Precedential Value -- Under W. Va. Code § 11-10-5r(b), a technical assistance advisory has no precedential value except to the taxpayer who requests the advisory, unless the Tax Commissioner specifically states that it has precedential value. This advisory was requested by the Dental Association on behalf of its members. Due to the nature of the questions presented for ruling, this technical assistance is declared to have precedential value, and may be relied upon by all dentists, whether or not they are members of the Dental Association. Publication. -- Under W. Va. Code § 11-10-5r(e), the Tax Commissioner is required to release technical assistance advisories to the public after they are modified to delete identifying characteristics, unless the taxpayer waives its right to confidentiality. This technical assistance advisory will be released as Technical Assistance Advisory 94-006. If you have any question about this advisory, please contact this office.Issued: October 7, 1994 James H. Paige III Secretary/Tax Commissioner