Medtronic Heart Monitors Are Taxable, California Court Rules

Medtronic USA Inc.'s implantable heart monitors don’t qualify as “medicines” exempt from sales tax, a California appeals court ruled Thursday, meaning the company won’t get a $3.33 million refund from the state.

The state statute laying out the exemption covers devices that assist with the functioning of an organ. Medtronic’s monitors serve a diagnostic function one step removed from assistance, the California Court of Appeal, First Appellate District, said.

“Medtronic is in the unenviable position of having a product whose function touches several of the concerns of” the statute and accompanying regulation, Justice James A. Richman wrote for the unanimous ...