Which disposable and reusable anesthesia breathing and intubation products were exempt from Florida sales tax?

Plain-English summary

Florida exempted the endotracheal tubes but treated the other listed anesthesia products as generally taxable equipment purchased by healthcare practitioners. The dividing line was how the product reached or became part of the patient, not simply whether it was used during medical care.

The seller asked about disposable breathing circuits, carbon-dioxide absorbents, breathing bags, adapters and connectors, laryngoscope handles and blades, endotracheal tubes, and intubation guides or stylettes.

Endotracheal tubes were incorporated into the patient

Section 212.08(2)(g) exempted medical products temporarily or permanently incorporated into a patient by a licensed healing-arts practitioner. The Department applied that exemption to endotracheal tubes.

Practitioner equipment was generally taxable

Breathing circuits, CO2 absorbents, bags, accessories, laryngoscope handles and blades, and intubation accessories were equipment used by practitioners to provide medical services. The healthcare provider's purchase was generally taxable even when the product was used in treatment.

Prescription and patient-sale facts could change a product's result

The Department stated that a medical product could be exempt when:

• It was sold or rented to a patient under a doctor's prescription or orders.
• It was a qualifying single-use “RX” product dispensed and consumed during the procedure for the patient's benefit.
• It was temporarily or permanently incorporated into the patient.
• It fell within a separately stated product exemption.

So a listed item otherwise treated as practitioner equipment could receive different treatment if the seller established one of those facts.

What this means for you

Medical-device and anesthesia suppliers

Classify the transaction by purchaser, prescription or order, single-use RX status, and whether the item enters the patient's body. “Used in surgery” alone did not establish exemption.

Hospitals and anesthesia practices

Purchases of tools and equipment for practice use are generally different from products sold, rented, dispensed, or incorporated into an individual patient.

Accountants and tax professionals

Maintain product-level documentation. Similar components in the same anesthesia circuit can have different tax treatment.

Common questions

Q: Were endotracheal tubes exempt?
A: Yes. They were temporarily incorporated into the patient by a healthcare practitioner.

Q: Were reusable laryngoscope handles exempt?
A: No under the stated practitioner-use facts.

Q: Were disposable breathing circuits automatically exempt?
A: No. Single patient use alone was not enough; the ruling required qualifying RX, patient-sale or rental, or incorporation facts.

Q: Could a product sold directly to a patient under physician orders be exempt?
A: Yes, according to the general rule stated in the advisement.

Citations and references

• Fla. Stat. § 212.08(2)(a) — prescribed medical products and supplies
• Fla. Stat. § 212.08(2)(g) — products temporarily or permanently incorporated into a patient
• Fla. Admin. Code r. 12A-1.020(6) — medical products sold to patients and practitioners
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 04A-011

Original ruling text

SUMMARY

QUESTION: What is the taxable status of certain anesthesia
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. A medical product incorporated into a patient,
either temporarily or permanently, by a healthcare
practitioner would be exempt from tax. 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.

Feb 16, 2004

Re: Technical Assistance Advisement 04A-011
Sales and Use Tax
Medical Products
Section 212.08(2), F.S.
Rule 12A-1.020, F.A.C.

Dear :

This is in response to your letter of January 7, 2004, in which
you request the issuance of a Technical Assistance Advisement
regarding the taxable status of certain anesthesia products that
your company sells in Florida. The products inquired about are
single patient use unless noted otherwise and are summarized as
follows:

1. Anesthesia Breathing Circuits [Disposable single
patient use breathing circuits for the delivery of
prescribed anesthetic gases]

2. CO2 Absorbents [A canister contained chemical used to
   absorb carbon dioxide in the patient's exhaled air and
   prevent excess CO2 in the breathing circuit]
3. Breathing Bags [Used by the Anesthesiologist to
   deliver anesthetic gases and is an integral part of
   the anesthesia patient circuit]
4. Accessories [Various adapters and modified connectors
   used to complete the anesthetic circuit and make
   access to monitor and fresh gas inlets possible]
5. Intubation Tools [Item to safely and quickly achieve
   an open and patent airway system for the delivery of
   anesthetic gases]
   a. Laryngoscope handles (non-disposable)
   b. Laryngoscope blades (disposable and non-disposable)
   c. Endotracheal Tubes
   d. Accessories (guides and stylettes)

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....

(g) Medical products and supplies used in the cure,
mitigation, alleviation, prevention, or treatment of
injury, disease, or incapacity which are temporarily or
permanently incorporated into a patient or client by a
practitioner of the healing arts licensed in the state 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.

(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.
...

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. A medical product incorporated into a patient, either
temporarily or permanently, by a healthcare practitioner would
be exempt from tax. 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.

Therefore, regarding the products inquired about, all, with the
exception of the endotracheal tubes, would be taxable as
equipment used by the healthcare practitioners in providing
medical services. If any of the products are "RX" products (in
addition to being for one time use) or if any of the products
are to be resold or rented to the patient, pursuant to a
physician's orders, the purchases would be exempt from tax.

Endotracheal tubes would be exempt as a medical product
temporarily incorporated into a patient by a healthcare
practitioner.

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 #58230