Did a 1988 California letter apply section 6020 to hospital x-ray microfiche made years later for space-saving storage?

Plain-English summary

The requester said many hospitals replaced original x-ray films with microfiche because onsite storage was limited and retrieving films stored offsite was prohibitively costly. For one hospital client, replacement occurred five years after the x-rays were produced. The requester reported that hospital radiology personnel regularly used the microfiche for diagnosis.

Section 6020, as quoted in the letter, treated producers of x-ray films or photographs as consumers of their materials and supplies when production was for diagnosing human medical or dental conditions, excluding purely cosmetic use. The letter said that rule did not apply to the stated microfiche facts. The original x-rays were produced directly for diagnosis, but the later copies were primarily made to replace them with smaller, space-saving versions. Potential or actual later diagnostic use did not change that production purpose.

The person selling the microfiche copies was therefore a retailer, and sales tax applied to the total charge.

Live annotation and source posture

The current live annotation says categorically that Microfiche copies of X-Ray film do not qualify as an X-Ray film or photograph pursuant to section 6020. The source is narrower: it says section 6020 is not applicable to the facts you provided and rests on the primary space-saving replacement purpose despite later diagnostic use. It does not decide every microfiche-production setting.

The live page dates the annotation 6/18/88. The complete supporting letter is dated June 16, 1988 in its formal header. No source explains the two-day conflict, so this page uses the in-document date and discloses the live metadata instead of normalizing it away.

The May 4, 1988 inquiry is absent. The source supplies no requester or hospital identity, original x-ray, microfiche image, production order, retention policy, onsite or offsite storage record, retrieval invoice, diagnostic-use log, bill, tax return, audit, assessment, refund or later agency outcome. The many hospitals, cost and regular-use facts are reported through the requester rather than independently documented in the PDF.

CDTFA's Annotated Legal Opinions collection says these letters are summarized as annotations and statutory law controls over an inconsistent annotation. The one-page PDF has native text and a single letterhead stencil, so no OCR was required. Two fresh direct PDF downloads and two live-page downloads were byte-identical; duplicate default text extractions also matched.

What this means for you

Document why and when a medical-image copy is produced. This letter turned on copies made years after diagnosis primarily to replace originals with smaller storage records; it did not say that every microfiche format automatically falls outside section 6020.

Common questions

Q: Did later diagnostic use control the result?

A: No. The letter focused on the primary production purpose and said potential or actual later diagnosis did not change it.

Q: Why did section 6020 apply to the original x-rays but not these copies?

A: The letter said the originals were directly produced for diagnosis, while the microfiche was primarily produced five years later as space-saving replacements.

Q: What did the seller owe under the letter?

A: The seller was a retailer of the copies, and sales tax applied to the total charge.

Q: Did the letter rule on all microfiche copies?

A: No. Its stated conclusion was limited to the supplied facts, even though the live annotation uses broader categorical language.

Missing evidence and references

• May 4, 1988 taxpayer inquiry — described but absent
• Requester, hospital and radiology-personnel identities — redacted or absent
• Original x-rays and microfiche copies — absent
• Production orders, retention policies and storage or retrieval records — implicated but absent
• Diagnostic-use logs, bills, returns, audits and later outcomes — not supplied

Verbatim support

From the official June 16, 1988 Tax Counsel letter:

In the case of one hospital client, the replacement is made five years after the X-rays are produced.

Although the X-ray films that are copied were originally produced for the direct purpose of diagnosing medical or dental conditions of human beings, the microfiche copies are primarily made to replace the existing X-ray films with smaller copies to save space.

We do not believe that the potential or even actual later use of the microfiche copies for such diagnostic purposes causes the persons who make the copies to be consumers of the copies under Section 6020.

Accordingly, we conclude that the person who sells such copies is the retailer of the copies, and sales tax applies to the total charge.

Citations and references

• California Revenue and Taxation Code § 6020

Source

• Annotated Legal Opinions collection: CDTFA Annotated Legal Opinions
• Live annotation: Annotation 420.0689
• Original supporting opinion: 420.0689 PDF

Original ruling text

STATE OF CALIFORNIA

420.0689

STATE BOARD OF EQUALIZATION
916-445-6450
June 16, 1988
Dear Mr. X--------------------,
This is in reply to your May 4, 1988 letter regarding the application of sales tax to charges for microfiche copies of X-ray films. You noted that, because of limited on-site storage areas and the prohibitive cost of accessing X-ray films stored off-site, many hospitals are replacing X-ray films with microfiche images. In the case of one hospital client, the replacement is made five years after the X-rays are produced. Personnel of the radiology department of the hospital informed you that the microfiche images are used regularly for diagnostic purposes. Given this information, you asked whether the producers of such copies are the consumers of the materials and supplies used. As you noted, Revenue and Taxation Code section 6020, provides: "Producers of X-ray films or photographs for the purpose of diagnosing medical or dental conditions of human beings, excluding use of those products for purely cosmetic purposes, are the consumers of materials and supplies used in the production thereof." We believe that section 6020 is not applicable to the facts you provided. Although the X-ray films that are copied were originally produced for the direct purpose of diagnosing medical or dental conditions of human beings, the microfiche copies are primarily made to replace the existing X-ray films with smaller copies to save space. We do not believe that the potential or even actual later use of the microfiche copies for such diagnostic purposes causes the persons who make the copies to be consumers of the copies under Section 6020. Accordingly, we conclude that the person who sells such copies is the retailer of the copies, and sales tax applies to the total charge. We hope this answers your question; however, if you need further information, feel free to write again. Very truly yours Ronald L. Dick Tax Counsel RLD:sr