Michael E. Caryl
Darrell V. McGraw, Jr.
Bowles, Rice, McDavid, Graff & Love Attorney General
Charleston, West Virginia Stephen B. Stockton
Attorney for the Appellee Assistant Attorney General
Charleston, West Virginia
Attorney for the Appellant
JUSTICE ALBRIGHT delivered the Opinion of the Court.
Where the issue on an appeal from the circuit court is clearly a question
of law or involving an interpretation of a statute, we apply a de novo standard of review.
Syl. Pt. 1,
Chrystal R.M. v. Charlie A.L., 194 W. Va. 138, 459 S.E.2d 415 (1995)
2. When the language of a statute is clear and unambiguous, an administrative
agency's rules and regulations must give such language the same clear and unambiguous
force and effect. Syl. Pt. 5, Appalachian Power Co. v. State Tax Dept., 195 W.Va. 573, 466
S.E.2d 424 (1995).
3. A statute, or administrative rule, may not, under the guise of
'interpretation,' be modified, revised, amended or rewritten. Syl. Pt. 1, Consumer Advocate
Div'n v. Public Serv. Comm'n, 182 W.Va. 152, 386 S.E.2d 650 (1989).
4. "Where the language of a statute is free from ambiguity, its plain meaning
is to be accepted and applied without resort to interpretation." Syl. Pt. 2, Crockett v.
Andrews, 153 W. Va. 714, 172 S.E.2d 384 (1970).
5. The sale of a radiopharmaceutical to a medical service provider is exempt
from the consumer sales tax under the provisions of West Virginia Code § 11-15-9(a)(11)
(1997) where the radiopharmaceutical is purchased and dispensed pursuant to a physician's
prescription that was prepared for a particular, individual patient.
The State Tax Commissioner (Tax Commissioner), Joseph M. Palmer, appeals from the February 22, 2000, order of the Circuit Court of Cabell County, which reversed an administrative decision upholding the state tax department's position that the sale of nuclear medicinesSee footnote 1 1 to medical service providers is subject to the state sales tax in all instances. The lower court determined that Appellee Syncor International Corporation (Syncor), whose business involves the sale of radiopharmaceuticals, was entitled to the exemption set forth in West Virginia Code § 11-15-9(a)(11) (1997),See footnote 2 2 which applies to sales of drugs dispensed upon prescription, for its core sales.See footnote 3 3 Upon our review of both the statutory language and the applicable regulations, we find no error with regard to the lower court's ruling and accordingly, affirm.
The circuit court sets forth a description of a core sale in its February 22,
2000, ruling based on the following stipulated facts:
a. An individual patient, as a result of experiencing chest pain, general fatigue or some other symptom of ill health, sees his or her physician to diagnose, cure, prevent and/or treat the suspected ailment.
b. The physician determines the appropriate diagnostic or therapeutic procedure. If suitable, the physician orders a nuclear medicine study as a diagnostic procedure. The physician refers the patient to the nuclear medicine department of a local hospital or clinic for the procedure.
c. The nuclear medicine physician within the hospital or clinic determines the suitable radiopharmaceutical and procedure. The physician issues a verbal, facsimile or electronic prescription to the Plaintiff.
d. At the Plaintiff's pharmacy, one of its nuclear medicine pharmacists receives and transcribes the physician's prescription for the patient. Based on the patient's weight, age and physical condition, the Plaintiff's pharmacist electronically calibrates the unit-dosage and introduces it into a syringe with needle attached, and inserts it into a lead-encased protective tube for transport.
e. A prescription label is printed which includes the name of the Plaintiff's pharmacy, the names of the physician, patient, and hospital or clinic, a prescription number, the name of the particular radiopharmaceutical, the dosage, the date and required time of administration, and other necessary instructions. In some instances, the patient's name is omitted from the label.
f. The unit-dose radiopharmaceuticals are delivered by car to the hospitals and clinics. A licensed nuclear medical technologist, under the direction of a physician, administers the drug to the patient at the appropriate time. The injection allows the radioactive isotope to be carried to the organ targeted for review. The patient then undergoes the imaging or therapeutic procedure. Very sophisticated and expensive imaging equipment captures the gamma rays emitted from the organ and gets a picture for diagnostic purposes.
g. The physician studies or reads the image(s) resulting from the procedure, and, based on the image(s), makes a diagnosis of the patient's ailment.
h. The Plaintiff [Syncor] bills the hospital or clinic for the nuclear medicine used. The Plaintiff's bills do not state patient names, but list only specific nuclear medicine purchased from the Plaintiff. Core and bulk sales are separately listed on the same bill. The Plaintiff is unaware of the price which hospitals charge the patients for the radiopharmaceuticals.
Based upon these facts, which clearly demonstrate the use of a prescription in connection with core sales, the lower court concluded that Syncor's core sales of nuclear medicine, being made pursuant to a physician's prescription, are exempt from consumer sales and service tax under W.Va. Code § 11-15-9(a)(11).
In challenging the lower court's ruling, Tax Commissioner suggests that West
Virginia Code § 11-15-9(a)(11) only applies when the patient directly buys and self-
administers a drug. In addition, Tax Commissioner relies upon the language used in 110
C.S.R. § 15-92.2, which defines non-exempt sales as those drugs sold to hospitals . . . which
are to be consumed in the performance of a professional service. Arguing that all sales of
nuclear medicines are consumed in the performance of a professional service and that the
subject sales are to the hospitals rather than to a patient, Tax Commissioner contends that the
core sales at issue are fully taxable.
Syncor argues that Tax Commissioner has sought to alter the plain language
of the statute through the adoption of self-serving regulations. As support for this position,
Syncor cites the language found in 10 C.S.R. § 15-92.2, which provides that: Drugs sold to
hospitals, licensed physicians, nursing homes, etc., which are to be consumed in the
performance of a professional service are subject to consumers sales and service tax. By
adding the limiting language--consumed in the performance of a professional service--
Syncor suggests that the state tax department sought to circumscribe the exemption so that
it would not apply whenever a drug is sold to a hospital or physician and then administered
by a purchaser other than the patient. Through this approach, Syncor contends that the tax
department is seeking to tax drug sales that are currently exempted from taxation by the
provisions of West Virginia Code § 11-15-9(a)(11).See footnote 7
We explained in syllabus point five of Appalachian Power Co. v. State Tax
Department, 195 W.Va. 573, 466 S.E.2d 424 (1995), that [w]hen the language of a statute
is clear and unambiguous, an administrative agency's rules and regulations must give such
language the same clear and unambiguous force and effect. A corollary to this tenet of
statutory construction is that [a] statute or administrative rule may not, under the guise of
interpretation, be modified, revised, amended or rewritten. Syl. Pt. 1, Consumer Advocate
Div'n v. Public Serv. Comm'n, 182 W.Va. 152, 386 S.E.2d 650 (1989). As Syncor argues,
the purpose of regulations is to give effect to the governing statute; such regulations cannot
be used to alter or narrow the statute's application. See Boley v. Miller, 187 W.Va. 242, 246,
418 S.E.2d 352, 356 (1992) (recognizing that agency's statutory interpretation is inapplicable
where such interpretation 'is unduly restricted and in conflict with the legislative intent')
(quoting Syl. Pt. 5, in part, Hodge v. Ginsberg, 172 W.Va. 17, 303 S.E.2d 245 (1983)); see
also Syl. Pt. 4, Security Nat'l Bank & Trust Co. v. First W.Va. Bancorp, Inc., 166 W.Va. 775,
277 S.E.2d 613 (1981) (holding that [i]nterpretations of statutes by bodies charged with
their administration are given great weight unless clearly erroneous).
It is axiomatic that: "Where the language of a statute is free from ambiguity, its plain meaning is to be accepted and applied without resort to interpretation." Syl. Pt. 2, Crockett v. Andrews, 153 W. Va. 714, 172 S.E.2d 384 (1970). In this case, the statutory provisions could not be clearer. All that is required for entitlement to the exemption under West Virginia Code § 11-15-9(a)(11) is (1) a sale; (2) of a drug; (3) that is dispensed upon a prescription.See footnote 8 8 The parties do not dispute the existence of any of these three required elements. The key to whether the exemption found in West Virginia Code § 11-15-19(a)(11) applies in this case, as the circuit court fully appreciated, is whether the drugs at issue were dispensed pursuant to prescriptions.See footnote 9 9 Accordingly, we conclude that the sale of a radiopharmaceutical to a medical service provider is exempt from the consumer sales tax under the provisions of West Virginia Code § 11-15-9(a)(11) where the radiopharmaceutical is purchased and dispensed pursuant to a physician's prescription that was prepared for a particular, individual patient.
Based upon the foregoing, the decision of the Circuit Court of Cabell County is hereby affirmed.
regulations identify when drugs will be considered to be dispensed pursuant to a prescription. Rather than defining what qualifies as a prescription-type sale, the regulatory provisions emphasize the distinction between those sales pursuant to prescription (the exempt) and those that are sold to medical service providers in bulk form without the issuance of prescriptions (the non-exempt). See 110 C.S.R. § 15-92.1-.3.