Were specified infusion, stimulation, implantable-lead, and heart-lung bypass products exempt from Florida sales tax?

Plain-English summary

The specified products did not qualify as prosthetic or orthopedic appliances, but they were exempt when dispensed by prescription and incorporated into an individual patient. The request listed a SynchroMed infusion pump, Itrel system, implantable lead, Interstim implantable pulse generator, and heart/lung bypass circuit products.

The Department relied on the medical-products exemption rather than the prosthetic-appliance exemption. It stated that prescribed items such as the infusion pump, pulse generator, implantable leads, and Interstim generator were incorporated into the patient by a licensed practitioner.

For the supplier's sale to a hospital, clinic, or physician, documentation depended on the purchaser. A hospital with a consumer's certificate of exemption provided a copy; otherwise the vendor obtained a resale certificate or a certificate or affidavit that the items would be dispensed only under a physician's order.

What this means for you

Medical use alone did not establish exemption. The ruling tied the result to an individual prescription, incorporation into the patient, and proper documentation of the initial sale.

Common questions

Q: Were the products prosthetic or orthopedic appliances? No.

Q: Could they still be exempt? Yes, through the prescribed-medical-product rule described in the ruling.

Q: Was a hospital purchase automatically exempt? No. The vendor needed the applicable exemption, resale, or physician-order documentation.

Citations and references

• Fla. Stat. § 212.08(2)(a)–(b) — medical-product and prosthetic-appliance exemptions
• Fla. Admin. Code r. 12A-1.020(6)(a)–(c) — medical products and supplies
• Fla. Admin. Code r. 12A-1.038(1) — resale documentation
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 00A-003

Original ruling text

SUMMARY

QUESTION: Do the following products meet the definition of
prosthetic and orthopedic appliances, and are they taxable
or exempt when sold? The products in question are:

SynchroMed Infusion Pump
Itrel System
Implantable Lead
Interstim Implantable Pulse Generator
Heart/Lung Bypass Circuit Products

ANSWER - Based on Facts Below: The products in question do
not meet the criteria for "prosthetic" or "orthopedic"
appliances. However, when these items are dispensed and
incorporated into a patient pursuant to a written
prescription of a duly licensed medical practitioner, the
sale to the patient is exempt from sales tax. The initial
purchase of the items by the hospital or physician would be
exempt when a resale certificate is issued to the vendor of
the product.

Jan 21, 2000

Re: TAA 00A-003
Sales of Medical Products
Section 212.08(2)(a), F.S.
Rules 12A-1.020(6)(a), 12A-1.038(1), F.A.C.

Dear :

This is in response to your letter of September 9, 1999, in
which you requested the issuance of a technical assistance
advisement regarding your company's sale of certain medical
products to taxable customers. You wish to know if the products
meet the definition of prosthetic and orthopedic appliances
under section 212.08(2)(b), F.S. You also wish to know, if the
products are considered to be prosthetic and orthopedic

appliances, whether your company is required to obtain a resale
certificate from the purchaser to substantiate the exempt nature
of the sale. The products in question are:

SynchroMed Infusion Pump
Itrel System
Implantable Lead
Interstim Implantable Pulse Generator
Heart/Lung Bypass Circuit Products

APPLICABLE AUTHORITY

Section 212.08(2), F.S., provides in part:

(a) There shall be exempt from the tax imposed by this
chapter any medical products and supplies or medicine
dispensed according to an individual prescription or
prescriptions written by a prescriber authorized by law to
prescribe medicinal drugs;.... There shall also be exempt
from the tax imposed by this chapter... prosthetic and
orthopedic appliances;....

Rule 12A-1.020, F.A.C., provides, in part:

(6)(a) Medical products and supplies used in the cure,
mitigation, alleviation, prevention or treatment of injury,
illness, disease or incapacity are taxable, unless:

1. Temporarily or permanently incorporated into a patient
   or client by a practitioner of the healing arts licensed by
   the State of Florida.

2. Ordered and dispensed by or on the prescription of a
   duly licensed practitioner authorized by the laws of the
   state to prescribe medicinal drugs; or

3. Ordered and dispensed by a pharmacist pursuant to the
   established dispensing procedures determined by the joint
   committee of medical, osteopathic and pharmacy professions
   as created by section 465.186, F.S.

(b) The sale of medical products or supplies to physicians,
dentists, veterinarians and hospitals is taxable even
though the medical products or supplies may be used in
connection with medical treatment, unless the products and
supplies are specifically exempt from tax under this rule
or in Rule 12A-1.021, F.A.C.

(c) "Medical products and supplies" shall mean and include,
but is not limited to, such items as cotton, knives, sewing
and surgical needles, scissors, microscopes, x-ray
machines, I.V. administration sets, laboratory apparatus,
surgeons' gloves, ear syringes, and hospital beds.

DEPARTMENT RESPONSE

The Department of Health has advised us that the products in
question do not meet their established criteria and guidelines
for "prosthetic" or "orthopedic" appliances. Thus, such products
are not exempt under the specific exemption for such devices.
However, an exemption from tax is provided under Section
212.08(2)(a), F.S., which extends to items such as the InDura
Intraspinal Catheter and SynchroMed Infusion Pump, Pulse
Generator, Implantable Leads, and the Interstim Implantable
Pulse Generator. These items all are dispensed and incorporated
into a patient pursuant to a written prescription of a duly
licensed practitioner.

With regard to the initial transaction between the vendor and
the hospital, clinic, or physician, one of the two following
procedures must be followed:

(a) if the items are sold to a hospital which holds a
consumer's certificate of exemption, the vendor must obtain
a copy of the hospital's consumer's certificate of
exemption; and

(b) if the items are sold to a hospital not holding a
consumer's certificate of exemption, or to a physician,
then the vendor must obtain a resale certificate (See Rule
12A-1.038, F.A.C.) or a certificate (or affidavit) from
such hospital or physician indicating that the items will

be dispensed only pursuant to a physician's order.

This response constitutes a Technical Assistance Advisement
under s. 213.22, F.S. which is binding on the department only
under facts and circumstances described in the request for this
advice as specified in s. 213.22, F.S. Our response is
predicated on those facts and the specific situation summarized
above. You are advised that subsequent statutory or
administrative rule changes or judicial interpretations of the
statutes or rules upon which this advice is based may subject
similar future transactions to a different treatment than
expressed in this response.

You are further advised that this response, your request and
related backup documents are public records under Chapter 119,
F.S., and are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Confidential information must be
deleted before public disclosure. In an effort to protect
confidentiality, we request you provide the undersigned with an
edited copy of your request for Technical Assistance Advisement,
any backup material, and this response, deleting names,
addresses and any other details which might lead to
identification of the taxpayer. Your response should be
received by the Department within 15 days of the date of this
letter.

Sincerely,

Jonathan E. Swift
Tax Law Specialist
Technical Assistance and Dispute Resolution
(850) 922-4840

Control No. 39436