Which respiratory-care products were exempt or taxable when sold to patients or purchased by healthcare practitioners?

Plain-English summary

Florida applied different sales-tax rules depending on the respiratory product, who bought it, and how it was used. A product sold or rented to a patient under a physician's prescription or order was generally exempt, as was a single-use prescribed product dispensed and consumed during a medical procedure for that patient's benefit.

Equipment purchased by healthcare practitioners for use in their own practices was generally taxable unless the product appeared in a specific exemption.

Products specifically exempt on the stated facts

The ruling identified these exemptions:

• Thermometers and necessary probes or attachments: specifically exempt under the medical-product rule.
• Portable resuscitators: specifically exempt as listed prosthetic or orthopedic appliances.
• Ventilator systems and nebulizers: treated as fluidic breathing assistors after advice from the Department of Health and therefore exempt.
• Necessary parts and attachments: exempt when they were components or attachments to an otherwise exempt ventilator, nebulizer, thermometer, or other exempt product.
• Single-use blood-gas kits: exempt if they were prescribed products.

For the submitted list's humidifiers, oxygen-delivery cannulas, masks and tents, connectors, tubing, adapters, pressure and flow devices, nebulizers, aerosol applications, heaters, and ventilatory-support items, exemption depended on whether the item was a necessary component or attachment to an exempt product.

Practitioner-owned therapy equipment was generally taxable

The Department treated the listed volume-measuring and respiratory-muscle exercise devices, spirometers, percussors, and flutter devices as taxable when purchased by a healthcare practitioner for practice use.

Those products could instead be exempt when they were single-use prescribed products or were resold or rented to a patient under a physician's order.

Oxygen and oxygen tanks had different treatment

Medical or therapeutic oxygen gas was exempt. But no specific exemption covered oxygen tanks owned by healthcare practitioners, so the tanks and necessary attachments such as masks and tubing were taxable to the practitioner.

A sale or rental of those tanks and attachments to a patient under a physician's order was exempt.

What this means for you

Respiratory-equipment sellers

Classify each invoice by the exact product, whether it is a necessary part of a specifically exempt device, the purchaser, and prescription or physician-order documentation.

Hospitals, clinics, and practitioners

Do not assume that medical use alone makes practice equipment exempt. The ruling separated practitioner-owned capital or therapy equipment from prescribed products furnished to patients.

Accountants and tax professionals

Trace components to the exempt parent device and retain product descriptions, prescriptions, orders, rental records, and evidence of patient versus practitioner ownership.

Common questions

Q: Were ventilators and nebulizers exempt?
A: Yes. Florida treated them as performing the function of an exempt fluidic breathing assistor.

Q: Were thermometers and portable resuscitators exempt?
A: Yes, along with necessary attachments to the exempt products.

Q: Were respiratory exercise and expectoration devices taxable?
A: They were taxable to practitioners for practice use, but could qualify when single-use and prescribed or when sold or rented to a patient under a physician's order.

Q: Was medical oxygen exempt while the tank was taxable?
A: Yes for practitioner-owned tanks on these facts. The gas was exempt, but the tank and attachments were taxable unless sold or rented to a patient under a physician's order.

Citations and references

• Fla. Stat. § 212.08(2) — medical products and prosthetic or orthopedic appliances
• Fla. Admin. Code r. 12A-1.020(6), (7) — prescriptions, test kits, and thermometers
• Fla. Admin. Code r. 12A-1.021(1) — listed prosthetic and orthopedic appliances
• Fla. Admin. Code r. 12A-1.015(5) — medical or therapeutic gases
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 03A-060

Original ruling text

SUMMARY

QUESTION: What is the taxable status of certain respiratory

care products sold in Florida?

ANSWER - Based on Facts Below: In general, any medical

product sold or rented to a patient pursuant to a doctor's
prescription, or orders, is exempt from tax. Single use
"RX" products dispensed and consumed during medical
procedures for the benefit of a patient would also be
exempt. Medical devices, machinery, and equipment that are
purchased by healthcare practitioners for use in their
practice are generally taxable. The exception is that
certain medical products and certain orthopedic equipment
are specifically exempt from tax, regardless of whether a
prescription is involved and regardless of whether the
product is sold to a patient or to a healthcare

practitioner

Dec 11, 2003

Re: Technical Assistance Advisement 03A-060
Sales and Use Tax
Medical Products
Section 212.08(2), F.S.
Rules 12A-1.020, and 12A-1.021, F.A.C.

Dear:

This is in response to your letter of October 22, 2003, in which
you request the issuance of a Technical Assistance Advisement
regarding the taxable status of certain respiratory care

products that your company sells in Florida. The products

inquired about are summarized as follows:

1. humidifiers (to re-humidify dry oxygen prior to
   delivery to patient)

2. single patient oxygen delivery products

a. Cannulas
b. Masks
c. Tents

3. connectors, tubings, and adapters used to complete the
   oxygen delivery system between the humidification
   device and patient.

4. pressure reducing and measured flow devices for oxygen
   delivery

5. large volume nebulizers (aerosol generating devices)

6. small volume nebulizers (deliver prescribed
   medications)

7. aerosol patient applications (masks and collars, for
   mouth or tracheostomy sites)

8. heaters, to warm delivered humidified gas

9. thermometers and thermometer probes

10. volume measuring devices and respiratory muscle
    exercise devices, respiromters, spirometers

11. blood gas kits (single use items used to withdraw
    blood samples)

12. mucous expectoration devices (percussors, flutter
    devices)

13. ventilatory support devices, including resuscitators,
    and adjunctive equipment and s supplies for the

ventilator

LAW

Section 212.08, 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; ...; and common household
remedies recommended and generally sold for internal or
external use in the cure, mitigation, treatment, or
prevention of illness or disease in human beings, but not
including cosmetics or toilet articles, notwithstanding the

presence of medicinal ingredients therein, according to a

list prescribed and approved by the Department of Health,
which list shall be certified to the Department of Revenue

from time to time and included in the rules promulgated by
the Department of Revenue. There shall also be exempt...

prosthetic and orthopedic appliances;.... (emphasis

supplied)

(b) For the purposes of this subsection:

1. "Prosthetic and orthopedic appliances" means any
   apparatus, instrument, device, or equipment used to replace
   or substitute for any missing part of the body, to

alleviate the malfunction of any part of the body, or to

assist any disabled person in leading a normal life by

facilitating such person's mobility. Such apparatus,

instrument, device, or equipment shall be exempted

according to an individual prescription or prescriptions

written by a physician licensed under chapter 458, chapter

459, chapter 460, chapter 461, or chapter 466, or according

to a list prescribed and approved by the Department of

Health, which list shall be certified to the Department of

Revenue from time to time and included in the rules

promulgated by the Department of Revenue.... (emphasis

supplied)

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.

(7)(a) The chemical compounds and test kits specified in
this paragraph which are used for the diagnosis or
treatment of disease, illness or injury are specifically
exempt. Examples of chemical compounds and test kits
include, but are not limited to the following: Albustix
reagent strips and tablets; blood pressure units;
cholesterol tests; clinistix reagent strips; clinitest

tablets; combistix reagent strips; dextrostix, reagent
strips; dextrotest kit and refills; diabetic test kits;
galatest; ictotest reagent tablets; sugar test tablets for

diabetics; thermometers for human use; tuberculin patch

test; urine testing kits; urograph test. (Emphasis

Supplied)

Rule 12A-1.021, F.A.C., dealing with prosthetic and orthopedic

appliances, provides in part:

(1)(a) Prosthetic and orthopedic appliances are exempt. The
term "prosthetic and orthopedic appliances" means any
apparatus, instrument, device, or equipment used to replace
or substitute for any missing part of the body, used to
alleviate the malfunction of any part of the body, or used

to assist any disabled person in leading a normal life by

facilitating such person's mobility. Such apparatus,

instrument, device, or equipment shall be exempted

according to an individual prescription or prescriptions

written by a duly licensed practitioner authorized by the

laws of the state to prescribe medicinal drugs, or

according to a list prescribed and approved by the

Department of Health, which list shall be certified to the

Department of Revenue from time to time.... (emphasis

supplied)

(b) The prosthetic and orthopedic appliances listed

below are specifically exempt:

Fluidic Breathing Assistor

Portable Resuscitators

DISCUSSION AND CONCLUSION

In general, any medical product sold or rented to a patient
pursuant to a doctor's prescription, or orders, is exempt from

tax. Single use "RX" products dispensed and consumed during
medical procedures for the benefit of a patient would also be
exempt. Medical devices, machinery, and equipment that are
purchased by healthcare practitioners for use in their practice
are generally taxable. The exception is that certain medical
products and certain orthopedic equipment are specifically
exempt from tax, regardless of whether a prescription is

involved and regardless of whether the product is sold to a
patient or to a healthcare practitioner. Pursuant to Rule 12A-
1.020 and Rule 12A-1.021, F.A.C., quoted above, thermometers,
test kits, fluidic breathing assistors, and portable

resuscitators are specifically exempt from tax. The Department
of Health has advised the Department that ventilator systems and
nebulizers perform the same function as a "fluidic breathing
assistor" and therefore would be also be exempt from tax. Any
necessary parts or attachments to an exempt product would be

exempt.

Therefore, regarding products listed under number 1 through
number 8, and item number 13, if the products are a necessary
component or attachment to an otherwise exempt product, such as
a ventilator, or nebulizer, the component or attachment would be
exempt. Regarding the product listed as number 9, thermometers,
a specific exemption exists and the exemption would include any
necessary attachments to the thermometer. A portable

resuscitator (included within item number 13) is specifically
exempt. Item number 11, single use blood gas kits would be

exempt if they are an "RX" product.

Physical therapy and respiratory therapy equipment (such as
items 10 and 12 on the list) would be taxable to the healthcare
practitioner. If the products are one time use "RX" products or

if they are to be resold or rented to the patient, pursuant to a

physician's orders, the purchases would be exempt from tax.

Gases, such as oxygen used for medical or therapeutic purposes
are exempt from tax. (Refer to Rule 12A-1.015(5), F.A.C.)

However, there is no specific exemption for oxygen tanks owned

by healthcare practitioners, and thus the tanks and any

necessary attachments such as masks and tubing would be taxable.
The sale or rental of tanks and attachments to patients pursuant

to a physician's orders would be exempt.

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 #57284