[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Total
Renal Care, Inc. v. Harris, Slip Opinion No. 

.]




                                           NOTICE
      This slip opinion is subject to formal revision before it is published in an
      advance sheet of the Ohio Official Reports. Readers are requested to
      promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
      South Front Street, Columbus, Ohio 43215, of any typographical or other
      formal errors in the opinion, in order that corrections may be made before
      the opinion is published.




                          SLIP OPINION NO. 

 TOTAL RENAL CARE, INC., APPELLANT, v. HARRIS, TAX COMMR., APPELLEE.
  [Until this opinion appears in the Ohio Official Reports advance sheets, it
       may be cited as Total Renal Care, Inc. v. Harris, Slip Opinion No.
                                     

.]
Taxation—R.C. 5751.02—Commercial-activity tax—R.C. 5751.033(I)—Ohio
        Adm.Code         5703-29-17(A)—Ohio            Adm.Code        5703-29-17(C)(28)—
        Healthcare provider’s gross receipts for service of providing dialysis to
        patients in Ohio properly sitused to Ohio because purchasers of dialysis
        services received benefit of their purchase in Ohio—Board of Tax Appeals’
        decision affirmed.
     (No. 2023-1056—Submitted July 9, 2024—Decided December 9, 2024.)
      APPEAL from the Board of Tax Appeals, Nos. 2019-848 and 2019-849.
                                   __________________
        DONNELLY, J., authored the opinion of the court, which FISCHER, DEWINE,
STEWART, BRUNNER, and DETERS, JJ., joined.                  KENNEDY, C.J., concurred in
judgment only.
                            SUPREME COURT OF OHIO




       DONNELLY, J.
       {¶ 1} Total Renal Care, Inc. (“TRC”), appeals a decision by the Board of
Tax Appeals affirming Tax Commissioner Patricia Harris’s denial of its refund
claims under Ohio’s commercial-activity-tax law. The commercial-activity tax
(“CAT”) is imposed on each person having gross receipts with an Ohio situs. See
R.C. 5751.01(G) and 5751.02(A). The question here is whether TRC’s gross
receipts have an Ohio situs for the periods during which TRC has requested a tax
refund. We conclude that they do and affirm the board’s decision.
                               I. BACKGROUND
                     A. Statutory and regulatory background
       {¶ 2} The CAT is “levied . . . on each person with taxable gross receipts for
the privilege of doing business in this state.” R.C. 5751.02(A). Subject to
exceptions not applicable here, “gross receipts” is defined as “the total amount
realized by a person, without deduction for the cost of goods sold or other expenses
incurred, that contributes to the production of gross income of the person.” R.C.
5751.01(F).
       {¶ 3} For CAT purposes, “[t]axable gross receipts” are “gross receipts
sitused to this state under [R.C. 5751.033].” R.C. 5751.01(G). But “[b]ecause
business is conducted across state and international boundaries, imposing the tax
often raises the thorny issue of how to properly allocate receipts to Ohio for
taxation.” Defender Sec. Co. v. McClain, 

. “Receipts are
sitused to Ohio according to taxable categories.” NASCAR Holdings, Inc. v.
McClain, 

, citing R.C. 5751.033. To help navigate the situsing




                                         2
                                      January Term, 2024




of gross receipts from the sale of services generally,1 the General Assembly has
instructed that such receipts


         shall be sitused to this state in the proportion that the purchaser’s
         benefit in this state with respect to what was purchased bears to the
         purchaser’s benefit everywhere with respect to what was purchased.
         The physical location where the purchaser ultimately uses or
         receives the benefit of what was purchased shall be paramount in
         determining the proportion of the benefit in this state to the benefit
         everywhere.


R.C. 5751.033(I).
         {¶ 4} The tax commissioner has the authority to “adopt rules to provide
additional guidance to the application of [R.C. 5751.033].” R.C. 5751.033(K).
Exercising this authority, the tax commissioner promulgated Ohio Adm.Code
5703-29-17. See 2006-2007 Ohio Monthly Record 2019-2033 (effective Dec. 11,
2006). Ohio Adm.Code 5703-29-17(A) provides that “[e]xcept as otherwise set
forth in [the] rule, the physical location where the purchaser ultimately uses or
receives the benefit of what was purchased is paramount in determining the
proportion of the benefit received in Ohio.” The rule goes on to specify situsing
standards for various services. The standard applicable to healthcare services
provides:


                  If healthcare services are performed in Ohio, one hundred
         per cent of the gross receipts are sitused to Ohio. If a healthcare


1. The CAT law contains a separate category for situsing gross receipts from the sale of
transportation services by a motor carrier, see R.C. 5751.033(G), but that category of services is not
at issue here.




                                                  3
                               SUPREME COURT OF OHIO




        service is provided partly in this state and outside this state, a
        reasonable allocation for the services performed in Ohio must be
        made.
                For example, a German resident comes to have a surgery
        performed at a hospital in Ohio. One hundred per cent of that gross
        receipt is an Ohio taxable gross receipt.


Ohio Adm.Code 5703-29-17(C)(28).2
                                 B. Factual background
        {¶ 5} TRC, whose parent company is DaVita, Inc., provides dialysis to
patients with chronic kidney disease and end-stage renal disease. Dialysis is a
procedure that removes and cleans a patient’s blood, then places the blood back
into the patient’s system. Patients receiving dialysis rely on this procedure because
their kidneys cannot effectively clean their blood. Treatments occur through the
patient’s physical connection to a machine called a dialyzer, last about three to four
hours, and typically occur under the supervision of a healthcare professional. The
dialysis treatments at issue in this case were performed entirely in Ohio.
        {¶ 6} TRC, however, also performs certain operations outside Ohio that
support its provision of dialysis treatment. Relevant here, TRC provided laboratory
services through its parent company, DaVita; these services were performed in
Florida. In addition, many of TRC’s administrative services are provided outside
Ohio. These include back-office support, billing and collections, accounting, tax
and regulatory compliance, data processing, information technology, and
procurement of medical equipment and supplies. All the administrative services at




2. The tax commissioner promulgated a similar rule for the purpose of situsing gross receipts
associated with laboratory services. See Ohio Adm.Code 5703-29-17(C)(49). That rule is not at
issue here.




                                             4
                                 January Term, 2024




issue were provided through DaVita and occurred at one of DaVita’s central
business offices in California, Colorado, Pennsylvania, Tennessee, or Washington.
        {¶ 7} For the period April 1, 2012, through December 31, 2014, TRC filed
quarterly CAT returns and made corresponding CAT payments. Originally, TRC
reported all the revenue that it had received from its Ohio locations. But TRC later
filed two refund claims with the tax commissioner. In the first, TRC sought a
refund of $28,011 for the period April 1, 2012, through June 30, 2012. In the
second, TRC sought a refund of $365,660 for the period July 1, 2012, through
December 31, 2014. TRC asserted that it was owed a refund because some of the
gross receipts on which it had paid the CAT had a situs outside Ohio since the
services underpinning those receipts—namely, laboratory and administrative
services—all were performed outside Ohio.
        {¶ 8} The tax commissioner denied both refund claims, and the board
affirmed. BTA Nos. 2019-848 and 2019-849, 

, *1. The board
determined that TRC’s laboratory and administrative services constituted
healthcare services under Ohio Adm.Code 5703-29-17(C)(28). 

at *3-4. But notwithstanding that rule, the board determined that for situsing
purposes under R.C. 5751.033(I), it was required to determine the physical location
where the purchaser benefited from what was purchased. 

 at *3-
4. That location, the board concluded, was Ohio. 

 Last, the board determined
that even if Ohio law permitted situsing the laboratory and administrative services
outside Ohio, it would be inappropriate to do so here because TRC had not provided
supporting documentation to justify such situsing. Id. at *5. TRC appealed.
        {¶ 9} At oral argument before this court, TRC conceded that the only
service it provides to its patients is dialysis and that the gross receipts at issue in
this case flowed from its provision of dialysis services. TRC admitted that while it
also performs laboratory and administrative functions, those activities support and
exist solely for its provision of dialysis services to patients in Ohio.




                                           5
                             SUPREME COURT OF OHIO




       {¶ 10} We may rely on a party’s representations at oral argument in
deciding the party’s case. See, e.g., Cincinnati Fed. S. & L. Co. v. McClain, 2022-
Ohio-725, ¶ 37. And we do so in conducting our analysis here.
                                  II. ANALYSIS
       {¶ 11} When reviewing decisions on appeal from the board, we determine
whether the board’s decision was reasonable and lawful. R.C. 5717.04; see also
Adams v. Harris, 

. A dispute about the meaning of a statute
presents a question of law that we review de novo. Progressive Plastics, Inc. v.
Testa, 

. And as we have said,


       [t]he determination of situs under the statutory standard involves an
       ‘“inference of an ultimate fact”’ from the basic facts shown by the
       evidence. Marc Glassman, Inc. v. Levin, 

, 2008-
       Ohio-3819, 

, quoting Ace Steel Baling, Inc. v.
       Porterfield, 

, 

 (1969). And
       the reasonableness of the inference from basic facts to an ultimate
       fact is a question of law on review. SFZ Transp., Inc. v. Limbach,
       

, 

 (1993).


Defender Sec., 

.
       {¶ 12} In its first proposition of law, TRC contends that the tax
commissioner’s rule that applies to the situsing of receipts for healthcare services,
Ohio Adm.Code 5703-29-17(C)(28), should control the legal analysis in this case.
Under this argument, TRC seeks to establish that its gross receipts for the relevant
period should be sitused according to the location where the services were
performed and that when a healthcare service “is performed both in and outside
Ohio, a reasonable allocation for the services is required.” TRC acknowledges that
R.C. 5751.033(I) instructs that gross receipts from services shall be sitused




                                          6
                                January Term, 2024




according to the location where the benefit of the purchased service was received.
But it argues that the rule, not the statute, should drive our analysis. First, TRC
asserts that the rule constitutes a reasonable interpretation of the statute. And
second, it asserts that because an agency must follow its own rules, the tax
commissioner is precluded from arguing for an analysis predicated on anything
other than the rule she promulgated. See State ex rel. Cuyahoga Cty. Hosp. v. Bur.
of Workers’ Comp., 

 (1986) (“administrative agencies are
bound by their own rules until those rules are duly changed”). For her part, the tax
commissioner assigns primacy to the statute, saying that its plain meaning controls
our analysis here. To the extent any reference to the rule is necessary, she says the
rule must be understood to require what the statute requires—that situsing decisions
should be based on the physical location where the purchaser benefited from the
service purchased.
        {¶ 13} We find no conflict between the statute and the administrative rule.
We begin by reviewing the plain language of the statute. State v. Bertram, 2023-
Ohio-1456, ¶ 11. In doing so, we do not ask “‘what did the general assembly intend
to enact, but what is the meaning of that which it did enact.’ ” Maple Hts. v. Netflix,

, quoting Slingluff v. Weaver, 

 (1902),
paragraph two of the syllabus. We thus “presume that the legislature says in a
statute what it means and means in a statute what it says there.” (Cleaned up.) State
ex rel. Lee v. Karnes, 

, ¶ 27.          When a statute’s meaning is
unambiguous, our task is at an end—we must apply the statute as written. Id. at
¶ 23.
        {¶ 14} R.C. 5751.033(I) provides that gross receipts from the sale of
services “shall be sitused to this state in the proportion that the purchaser’s benefit
in this state with respect to what was purchased bears to the purchaser’s benefit
everywhere with respect to what was purchased.” The General Assembly left no
one guessing about how to apply this provision. Rather, the General Assembly




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                              SUPREME COURT OF OHIO




went out of its way to instruct those who apply the statute to home in on the physical
location where the purchaser ultimately benefits from what was purchased,
underscoring that the purchaser’s physical location is “paramount” to the inquiry,
R.C. 5751.033(I).
        {¶ 15} A simple example helps illustrate what the statute requires. Imagine
that you contracted with a lawn-care company to mow your lawn located in Ohio.
Under the statute, the lawn-care company must situs to Ohio the gross receipts it
receives from selling the mowing service to you because you—as the purchaser—
benefited from that service in Ohio. But now imagine you have an out-of-state
vacation home with a lawn that needs to be mowed. Were the same lawn-care
company to mow that lawn, the gross receipts it received for selling that service to
you would not be situsable to Ohio, because you benefited from that service in
another state (i.e., outside Ohio).
        {¶ 16} The statute’s meaning is plain on its face: When determining the
location to which gross receipts should be sitused, the taxing authority must look at
the location where the purchaser benefited from the purchased service. That is
enough to answer the question, “Where should TRC’s gross receipts for the relevant
period be sitused?” They should be sitused in the location where the benefit of the
service was received by the purchaser.
        {¶ 17} And it does not take much inquiry to conclude that the benefits of
TRC’s dialysis services were received by patients being treated in Ohio. As TRC
conceded during oral argument, it provides dialysis services and the gross receipts
at issue here came from its provision of those services. Neither TRC nor DaVita
provide laboratory or administrative services as stand-alone services. Rather, those
services are ancillary to and supportive of the dialysis services TRC provides. And
there is no dispute that the dialysis services were provided in their entirety to
patients in Ohio. Indeed, given that R.C. 5751.033(I) puts a spotlight on the
purchaser’s physical location in determining where to situs a taxpayer’s gross




                                          8
                                January Term, 2024




receipts, it would be exceedingly strange to conclude that a patient receiving
dialysis in Ohio benefits from such service in a physical location other than Ohio.
       {¶ 18} A return to our lawn-care example shows how TRC’s argument that
its laboratory and administrative functions are stand-alone services and that the
gross receipts for those services should be sitused outside Ohio is untenable.
Imagine once again that you’ve contracted with a lawn-care company to mow your
lawn located in Ohio. But in this example, the company first sends its mowers to a
different state to have the mowers’ blades sharpened and the company has its
payroll and billing services in several other states. And then the company argues
that the blade-sharpening and billing services are separate services, despite the fact
that those services occur solely to support the lawn-care service that you’ve
purchased and received in Ohio. No one would view paying a company to mow
your lawn as also paying for the separate equipment-maintenance or financial
services of the lawn-care company. The same thought process applies here. TRC’s
patients pay for and receive dialysis in Ohio. That TRC undertakes other tasks to
provide that healthcare service does not convert those other tasks into services that
patients in Ohio pay for separate from the healthcare service and that should be
sitused elsewhere.
       {¶ 19} Even if we were to accept TRC’s argument that the administrative
rule should control our analysis here, we would reach the same conclusion. The
rule directs that “the physical location where the purchaser ultimately uses or
receives the benefit of what was purchased is paramount in determining the
proportion of the benefit received in Ohio,” unless another provision of the rule
specifies otherwise. Ohio Adm.Code 5703-29-17(A). And under Ohio Adm.Code
5703-29-17(C)(28), if a healthcare service is provided entirely in Ohio, then the
entirety of the receipts for that service are sitused to Ohio. The “healthcare service”
at issue here is dialysis, and that service was provided entirely in Ohio.




                                          9
                              SUPREME COURT OF OHIO




       {¶ 20} In its merits brief, TRC argued that portions of the healthcare
services it provided for the relevant period—including laboratory testing and
administrative services—were performed outside Ohio, thereby requiring the gross
receipts for the provision of those services to be sitused outside Ohio. But while
laboratory testing and administrative services might have aided TRC in providing
dialysis, those functions do not constitute a healthcare service provided in Ohio or
received by patients in Ohio. Thus, whether we apply the statute (which looks at
the location where the purchaser received the benefit of his or her purchase) or the
rule (which looks at the location where the service was performed), we get the same
result: TRC provides dialysis services in Ohio, that service is performed entirely in
Ohio, and the benefit to the purchasers of that service is received entirely in Ohio.
As a result, there is no reason to situs TRC’s gross receipts for the relevant period
anywhere other than Ohio.
       {¶ 21} This is not a case in which application of both the rule and the statute
lead to conflicting results. If such a situation should arise, the statute would govern.
But we are not dealing with a case in which the performance or provision of a
healthcare service occurred across multiple states or the benefit of the purchased
service was received in more than one state. Our concern here is solely whether
the board’s use of the statute in denying TRC’s request for CAT refunds was
unreasonable or unlawful. And we conclude that it was not.
       {¶ 22} TRC argues in its second proposition of law that it provided
sufficient evidence showing the proportion of its services that were performed
outside Ohio during the relevant period.         Given our resolution of the first
proposition of law, we do not need to reach this proposition. Any answer we would
provide on the sufficiency of TRC’s evidence before the tax commissioner and the
board concerning the situsing of laboratory testing and administrative services
would have no effect on the outcome of this case and would amount to an advisory




                                          10
                                January Term, 2024




opinion. See Adams, 

 (observing that this court’s settled
practice is to disfavor issuing advisory opinions).
       {¶ 23} In sum, the plain language of R.C. 5751.033(I) requires that gross
receipts for the CAT be sitused in proportion to the locations where the benefit of
the service is received. The only service at issue here is TRC’s provision of dialysis
to patients in Ohio. Thus, applying the statute, we hold that the entirety of the gross
receipts for that service during the relevant periods should be sitused to Ohio, and
the board did not err in reaching the same decision.
                                III. CONCLUSION
       {¶ 24} We affirm the Board of Tax Appeals’ decision.
                                                                   Decision affirmed.
                               __________________
       Reed Smith, L.L.P., and Paul E. Melniczak, for appellant.
       Dave Yost, Attorney General, T. Elliot Gaiser, Mathura Sridharan, and
Raina Nahra Boulos, Assistant Attorneys General, for appellee.
                               __________________




                                          11