SALT Report 2222 – An appeal of an Arkansas Circuit Court’s summary judgment ruling against a Taxpayer who was protesting the imposition of sales tax on copies of medical records was dismissed by the Arkansas Supreme Court because the Circuit Court did not attach a sufficient Rule 54(b) certificate.
In this case, the Taxpayer filed a class-action complaint, alleging that her health care provider was in violation of the Arkansas Deceptive Trade Practices Act. The Taxpayer sought damages and requested that the court:
Declare that the healthcare provider illegally collected sales tax on charges for services rendered in retrieving and copying medical records,
- Find that the Healthcare provider’s practice of billing and collecting sales tax violated the ADTPA, and
- Find that the Healthcare Provider was unjustly enriched by the sales tax it collected
On cross-motion for summary judgment, the Circuit Court determined that pursuant to section 16-46-106, sales tax applies to the sale of copies of medical records. Thus, the Circuit Court ruled in favor of the Healthcare Provider. Pursuant to Arkansas law, the Court attached a Rule 54(b) certificate which would allow the Taxpayer to file an immediate appeal.
However, before the Supreme Court could hear the appeal, they must first determine whether the Rule 54(b) certificate was sufficiently executed. Rule 54(b) of the Arkansas Rules of Civil Procedure provides that “the Circuit Court may direct the entry of a final judgment “only upon an express determination supported by specific factual findings, that there is no just reason for delay and upon an express direction for the entry of judgment.” Further, the rule provides that, if such a determination is made, the Court must execute a certificate “which shall set forth the factual findings upon which the determination to enter the judgment as final is based.”
In this case, the Circuit Court’s Rule 54(b) certificate merely stated a conclusion that the granting of the motions in favor of the Healthcare Provider rendered every other claim by the Taxpayer moot, thereby ending the litigation.
Because the Circuit Court’s one-sentence explanation did not contain “any specific findings of any danger of hardship or injustice that could be alleviated by an immediate appeal,” the Supreme Court ruled that the certificate failed to comply with the requirements in Rule 54(b), and the appeal was dismissed without prejudice.
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