Were single-patient anesthesia, infusion, and apheresis products exempt when federal law required an Rx-only or physician-order legend?

Subject

Medical Products

Plain-English summary

The described one-time-use medical products were exempt when federal law required them to bear “Rx only” or the caution restricting sale or use to a licensed physician's order. The products included single-patient anesthesia, infusion, and apheresis items used for treatment and therapy.

The prescription legend alone did not exempt reusable equipment held by a health-care practitioner or facility. X-ray machines and similar reusable diagnostic machinery remained outside this ruling's exemption.

What this means for you

The ruling combined the required federal legend with one-time patient use. Reusable capital equipment received different treatment even if it also carried prescription restrictions.

Common questions

Q: Were single-use Rx-only products exempt? Yes.

Q: Did the exemption cover reusable x-ray machines? No.

Q: What product families were described? Anesthesia, infusion, and apheresis products.

Citations and references

• Fla. Stat. § 212.08(2)(a) and (f) — prescription medical products and drug sales
• Fla. Admin. Code r. 12A-1.020(6) — medical products and supplies
• Fla. Stat. § 465.186 — dispensing procedures cited
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 01A-041

Original ruling text

SUMMARY

QUESTION: What is the taxable status of one-time use,
prescription medical products?

ANSWER - Based on Facts Below: Medical products that are
intended for one-time use and that are required under
federal law to bear a prescription legend that reads either
"RX only", or "CAUTION: Federal law restricts this device
to sale (or use) by or on the order of a licensed
physician," would be exempt from tax.

Jul 23, 2001

Re: Technical Assistance Advisement 01A-041
Sales Tax - Medical Products
Section 212.08(2), F.S.
Rule 12A-1.020(6), F.A.C.

Dear :

This is in response to your letter of April 14, 2001 (received
June 1, 2001), requesting the issuance of a Technical Assistance
Advisement regarding the taxable status of certain medical
products which your company sells in Florida. Your letter
provides in part:

The medical products and supplies for which the TAA is
being requested are used exclusively on a single patient
for the cure, mitigation, treatment, or prevention of
illness or disease, and contain the Federal warning
restricting the sale of said products to a sale or on the
order of a licensed physician or other licensed
practitioner.

BACKGROUND

XXX is a leader in delivering critical therapies for life

threatening conditions. Its technologies are related to the
blood and circulatory system and the company manufactures a
range of products including those used to deliver fluids
and drugs to patients. These products provide fluid
replacement, nutrition therapy, pain management, antibiotic
therapy, chemotherapy, and other therapies. Among the
products it sells are:

1) Anesthesia Products - used to administer anesthetic
gases to a patient to produce a complete loss of sensation
(includes anesthesia ports, facemasks, breathing circuits,
trachea tubes, breathing bags, anesthesia trays and pain
management kits).

2) Infusion products - used to administer IV therapy into
the body of a patient for medical treatment (includes
infusion sets/accessories, infusors, hypodermic/irrigation
syringes, and containers).

3) Apheresis products - used in the collection of blood and
blood components for therapeutic applications (includes
apheresis kits, plasmaphersis packs, blood pack units, and
anti coagulant solutions).
...
Anesthesia products are used to administer anesthetic gases
to single patients to produce a complete loss of sensation
or unconsciousness. It is accomplished by intraveneous
administration of drugs or by inhalation of a mixture of
anesthetic gases using the anesthesia products mentioned
above. During surgery, the anesthesiologist has to monitor
the patient's oxygenation, ventilation, circulation and
temperature. Anesthesia products are carefully prescribed
by a licensed practitioner for each patient to ensure the
patient receives the most effective treatment.

Infusion products are used to administer IV therapy into
the body of a single patient for medical treatment to
alleviate and prevent illness or disease. Intravenous sets
and accessories connected to an IV bag allow IV therapies
to flow from an IV bag into a patient. They are ordered and
dispensed by a licensed practitioner for single use. They

also contain the federal legend, which prohibits them from
being dispensed without prescription.

Apheresis products are used in the collection of blood and
blood components for therapeutic applications. All of the
products used to collect blood and its components are for
single patient usage. They also contain the federal legend,
which prohibits them from being dispensed without
prescription.

Law

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

(2) EXEMPTIONS; MEDICAL.
(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;....

(f) Sales of drugs to or by physicians, dentists,
veterinarians, and hospitals in connection with medical
treatment are exempt.

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.

Conclusion

Medical products, such as those that you have described, that
are intended for one-time use and that are required under
federal law to bear a prescription legend that reads either "RX
only", or "CAUTION: Federal law restricts this device to sale or
on the order of a licensed physician," would be exempt from tax.

The exemption does not extend to prescription legend devices
that are intended to be reusable by the health care practitioner
or facility. The exemption thus would not be applicable to items
such as x-ray machines or similar diagnostic machinery.

Closing Statement

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., which are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Your name, address, and any other
details which might lead to identification of the taxpayer must
be deleted by the Department before disclosure. In an effort to
protect the confidentiality of such information, we request you
provide the undersigned with an edited copy of your request for
Technical Assistance Advisement, backup material and response
within fifteen days of the date of this advisement.

Sincerely,

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

Control #45492