Were a dealer's retail sales of a redacted, single-use medical product to Florida hospitals subject to sales and use tax?

Plain-English summary

Florida held that the taxpayer's sales of a redacted, single-use medical product to hospitals were taxable.

The product guided coils and other items in a medical system to a location in the body, but the product itself was not inserted into or left in the patient. It also was not a prescription product. Under Fla. Admin. Code R. 12A-1.020, a one-time-use item needed to be prescribed or temporarily or permanently incorporated into a patient to qualify on the theories presented.

Because neither condition was met and no specific exemption applied under Fla. Stat. Sec. 212.08(2), the Department classified the product as taxable “instrument” or “equipment.”

What this means for you

Medical-product sellers

A medical purpose alone did not make the product exempt. The Department focused on prescription status and whether the item was incorporated into the patient.

Hospitals and healthcare entities

Hospitals and healthcare providers generally pay tax on taxable items used or consumed in providing medical services unless a specific exemption applies.

Common questions

Was the product exempt because it was used in a medical procedure? No. Its medical use did not satisfy a specific exemption.

Why did Florida treat it as taxable? It was not prescribed and was not temporarily or permanently incorporated into the patient.

How did the Department classify it? As taxable medical instrument or equipment under Rule 12A-1.020.

Citations and references

• Fla. Stat. Sec. 212.05
• Fla. Stat. Sec. 212.08(2)
• Fla. Admin. Code R. 12A-1.020

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 22A-017

Original ruling text

QUESTION: Are Taxpayer’s sales of XXXX (“Product”) subject to Florida Sales and Use Tax when
sold at retail in Florida?
ANSWER: Yes. Product is not inserted into the body. Furthermore, Product is not a
prescription product. There is no exemption for Product. Therefore, sales of Product are
subject to Florida Sales and Use Tax.

August 31, 2022
XXXX
Attn.: XXXX
XXXX
XXXX
XXXX
Subject: Technical Assistance Advisement 22A-017
STATUTE CITE: Sections 212.05 and 212.08(2), Florida Statutes (F.S.)
RULE CITE: 12A-1.020, Florida Administrative Code (F.A.C.)
XXXX ("Taxpayer")
FEIN: XXXX
BP#: XXXX
Dear XXXX:
This is in response to your letter dated April 20, 2022, requesting this Department’s issuance of
a Technical Assistance Advisement (“TAA”) pursuant to section 213.22, F.S., and Rule Chapter 1211, F.A.C., concerning the taxability of a medical product being sold by Taxpayer. An examination
of your letter has established you have complied with the statutory and regulatory requirements
for issuance of a TAA. Therefore, the Department is hereby granting your request for a TAA.
Requested Advisement
Are Taxpayer’s sales of XXXX (“Product”) subject to Florida Sales and Use Tax when sold at retail
in Florida?

Florida Department of Revenue
Page 2

Stated Facts
Taxpayer sells medical products to hospitals in Florida. Taxpayer is registered as a dealer to
collect and remit Florida sales and use tax.
Taxpayer’s Product is used to guide the coils and other products in the XXXX system to the
location within the body where the coils and other products will be housed. Product is a onetime use item. Product is not inserted into the body, and Product does not stay in the body.
Product is not a prescription product.
Taxpayer Position
Taxpayer believes that sales of Product are subject to Florida sales and use tax when sold in
Florida.
Law and Discussion
Unless a specific exemption applies, s. 212.05, F.S., provides it is the legislative intent that every
person is exercising a taxable privilege that engages in the business of selling tangible personal
property1 in this state. For exercising such a privilege, a tax is levied on each taxable transaction
or incident. The tax is due and payable at the rate of 6 percent, plus any applicable surtaxes
imposed under s. 212.055, F.S., on the total consideration received for each item or article of
tangible personal property when sold at retail in this state.
Exemptions from tax are strictly construed against the claimant. Wanda Marine Corp. v. Dep't of
Revenue, 305 So. 2d 65, 69 (Fla. 1st DCA 1975).
Rule 12A-1.020(2)(b), F.A.C., provides that hospitals, healthcare entities, and licensed
practitioners are required to pay tax at the time of purchase on taxable items used or consumed
in providing medical services.
Rule 12A-1.020(6)(a), F.A.C., defines “[m]edical products, supplies, or devices” as “any products,
supplies, or devices that are intended or designed to be used for a medical purpose to treat,
prevent, or diagnose human disease, illness, or injury. The purpose is assigned to a product,
supply, or device by its label or its general instructions for use.”
Rule 12A-1.020(6)(b), F.A.C, provides that unless specifically exempt, products, supplies, or
devices sold to hospitals and healthcare entities, or to licensed practitioners are subject to tax.
The rule lists “instruments” and “equipment” as items (products, supplies, or devices) that do
not qualify for the exemption from sales tax.
1

“Tangible personal property” means and includes personal property which may be seen, weighed,
measured, or touched or is in any manner perceptible to the senses. See s. 212.02(19), F.S.

Florida Department of Revenue
Page 3

As a one-time use item, to be exempt, Product would need to be dispensed by prescription, or
temporarily or permanently incorporated into a patient. See Rule 12A-1.020(6)(c)1., (d)1., and
(e), F.A.C. The stated use of Product does not meet either of these requirements. Accordingly,
Product is properly classified as an “instrument” or “equipment” subject to tax.
The sale of medical equipment, products, and supplies, used by healthcare facilities located in
Florida, are subject to tax, absent a specific exemption. Product is tangible personal property
and is not specifically exempt from tax under the provisions of s. 212.08(2), F.S., Exemptions;
Medical and Rule 12A-1.020, F.A.C.; therefore, sales in Florida of Product are subject to tax.
Conclusion
Taxpayer’s sales of Product are subject to Florida sales and use tax when sold at retail in Florida.
This response constitutes a Technical Assistance Advisement under section 213.22, F.S., which is
binding on the Department only under the facts and circumstances described in the request for
this advice as specified in section 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 that
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 section 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, the 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.
If you have any further questions with regard to this matter and wish to discuss them, you may
contact me directly at (850) 717-6363.
Sincerely,

Leigh L. Ceci
Leigh L. Ceci
Tax Law Specialist
Technical Assistance and Dispute Resolution
Record ID: 7000714302