Medtronic USA v. Cal. Dept. of Tax & Fee Admin.

Filed 4/16/

CERTIFIED FOR PUBLICATION

THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

MEDTRONIC USA, INC.,

Plaintiff and Appellant,

A169290

v.

CALIFORNIA DEPARTMENT OF (City & County of San TAX AND FEE ADMINISTRATION, Francisco Super. Ct. No.

CGC-22-599205)

Defendant and Respondent.

Medtronic USA, Inc., (Medtronic) manufactures “RICMS,” two types of insertable cardiac monitors, which it describes as “slim, headless heart monitoring devices that are implanted subcutaneously in a patient’s chest that captures ECG [electrocardiogram] needed by a physician to diagnose and make informed decisions about syncope patients and those whose experience transient symptoms that may suggest a cardiac arrhythmia. The RICMs automatically record the patient’s ECG upon detecting cardiac arrhythmias.” The California Department of Tax and Fee Administration (Tax Department) collected sales tax upon the sale of those devices. Medtronic maintained that the devices are exempt from tax by reason of Revenue and Taxation Code

1 section 63691 and an administrative measure known as Regulation 1591 (Cal. Code Regs, tit. 18,…