When is an adjustable bed and its special mattress exempt from Georgia sales tax as prescribed durable medical equipment?

Plain-English summary

A specialty-bedding retailer sold adjustable beds offering features such as head tilt, foot elevation, massage, an anti-snore position, safety stops, and whole-bed height adjustment. These beds generally required special mattresses. Some individual customers bought a bed and mattress under a licensed practitioner's prescription.

Georgia exempts durable medical equipment sold to an individual under a prescription, but not equipment sold to a medical service provider. The Department used the Streamlined Sales and Use Tax Agreement's description of a hospital bed -- a single bed with a three-section frame allowing the head, middle, or foot to be raised -- and extended the same treatment to beds with additional sections that were functionally equivalent.

The Department ruled that the bed and accompanying mattress were exempt when:

• the bed had at least three adjustable sections and met the durable-medical-equipment definition;
• the special mattress was required for the bed to work as intended;
• the purchaser was an individual with an illness or injury, not a medical provider or other business; and
• a prescription was issued to that individual.

What this means for you

Adjustable-bed retailers

Do not rely on marketing labels alone. Review the bed's structure and medical function, confirm the customer is an individual named by the prescription, and retain documentation supporting the tax-free sale for at least three years.

Individual purchasers

A prescription is necessary but the product must also qualify as durable medical equipment. A traditional bed does not become exempt merely because a practitioner recommends it.

Medical providers and businesses

The exemption applied to sales to natural persons. The ruling expressly says it is unavailable to medical service providers and limits the holding to an individual with an illness or injury.

Common questions

Q: What bed design did Georgia treat as durable medical equipment?

A: A single bed with a frame in at least three sections allowing the head, middle, and foot to be raised, as well as more-adjustable beds that are functionally equivalent.

Q: Is the mattress exempt too?

A: Yes, when the qualifying bed requires a special mattress to function as intended and both are sold under the qualifying prescription.

Q: Is a prescription by itself sufficient?

A: No. The bed must satisfy the durable-medical-equipment definition, and the sale must be to the prescribed individual with an illness or injury.

Q: Can a hospital or another medical provider use this exemption?

A: No. The cited regulation and ruling state that this exemption is not available to medical service providers.

Q: Can another retailer rely on this ruling?

A: No. It is limited to the requesting seller's products and represented sale conditions, and the seller must exercise good faith in each untaxed transaction.

Citations and references

Authorities:

• O.C.G.A. § 48-8-2(15), (28) -- durable medical equipment and prescription definitions
• O.C.G.A. § 48-8-3(54) -- prescribed durable medical equipment exemption
• O.C.G.A. § 48-8-38 -- good-faith responsibility for untaxed sales
• O.C.G.A. § 48-8-52 -- minimum three-year record retention
• Ga. Comp. R. & Regs. r. 560-12-2-.30 -- durable medical equipment rules
• Appendix L, Rules to the Streamlined Sales and Use Tax Agreement (2006) -- hospital-bed classification used in the analysis

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2017-08

Original ruling text

Georgia Letter Ruling: LR SUT-2017-08
Dated: March 28, 2017
Topic: Durable Medical Equipment
This letter is in response to your request for guidance on the application of Georgia sales and use tax to beds and
mattresses sold by [Redacted] (“Taxpayer”).
Facts Presented by Taxpayer
Taxpayer is a mattress and specialty bedding retailer. In addition to selling traditional beds and flat mattresses,
Taxpayer sells a variety of adjustable beds and mattresses for customers with specific needs. Some of the features of
these adjustable beds include the following:
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Head tilt
Foot elevation
Massaging effects
Pre-programmed anti-snore position
Safety stop for adjustment features
Adjustable height to elevate or lower the entire bed

All of the adjustable beds can accommodate side rails and wheels as needed by the customer. Generally, an adjustable
bed requires a special mattress so that the bed functions as intended. On occasion, individual customers will purchase
an adjustable bed and accompanying mattress pursuant to a prescription from a licensed practitioner.
Issue
Is Taxpayer required to collect sales and use tax when an adjustable bed or mattress is sold to an individual customer
pursuant to a prescription from a licensed practitioner?
Analysis
Georgia levies and imposes a tax (subject to certain specific exemptions) on the retail purchase, retail sale, storage,
use, or consumption of tangible personal property and on certain services. 1 O.C.G.A. § 48-8-3 provides a specific
exemption for the sale or use of any durable medical equipment that is sold to an individual (i.e., a natural person)
pursuant to a prescription.2 This exemption is not available to medical service providers.3 Georgia law defines “durable
medical equipment” as equipment that can withstand repeated use, is primarily and customarily used to serve a medical
purpose, generally is not useful to a person in the absence of illness or injury, is not worn in or on the body, and is not
mobility enhancing equipment.4
By Regulation, hospital beds, mattresses, and bedding-related attachments are examples of durable medical
equipment, but the Regulation does not define the term “hospital bed.”5 Georgia entered the Streamlined Sales and
Use Tax Agreement (“Streamlined Agreement”) to create a simplified system for the application of sales and use tax. 6
Thus, the Department is generally guided by definitions and classifications in the Streamlined Agreement. In
Appendix L of the Streamlined Agreement, a “hospital bed” is defined as “a single bed with a frame in 3 sections so
the head middle or foot can be raised as required,” and it is classified as durable medical equipment.7 Accordingly,
the Department abides by the Streamlined Agreement: the bed with a frame in three sections for elevation of the head,

1

O.C.G.A. §§ 48-8-1 and 48-8-30(a).
O.C.G.A. § 48-8-3(54); Ga. Comp. R. & Regs. r. 560-12-2-.30(4). “Prescription” means an order, formula, or
recipe issued in any form of oral, written, electronic, or other means of transmission by a duly licensed practitioner
authorized by the laws of this state. O.C.G.A. § 48-8-2(28).
3
Ga. Comp. R. & Regs. r. 560-12-2-.30(4).
4
O.C.G.A. § 48-8-2(15); Ga. Comp. R. & Regs. r. 560-12-2-.30(2)(b)(1).
5
Ga. Comp. R. & Regs. r. 560-12-2-.30(2)(b)(2).
6
O.C.G.A. § 48-8-160, et seq.
7
Appendix L, Rules to the Streamlined Sales and Use Tax Agreement (2006) (emphasis added).
2

Georgia Letter Ruling: LR SUT-2017-08
Dated: March 28, 2017
Topic: Durable Medical Equipment
Page 2 of 2
foot, or middle is eligible for the durable medical equipment exemption. Likewise, if such a bed requires a special
mattress to ensure that it functions as intended, the mattress is considered part of the equipment.
Taxpayer sells beds that are larger or more adjustable than those defined as “hospital beds” by the Streamlined
Agreement. In considering the applicability of the durable medical equipment exemption to those products, each bed
must be reviewed to determine whether it is durable medical equipment. 8 Typically, adjustable beds are durable
medical equipment if they are functionally equivalent to “hospital beds” as defined in the Streamlined Agreement.
That is, since beds with three adjustable sections are primarily and customarily used for a medical purpose, it follows
that beds with additional sections for more tailored adjustment serve the same purpose. As indicated by the
Streamlined Agreement, the adjustment features that define a hospital bed (and distinguish it from a traditional bed)
would not be useful to an individual that does not have an ailment alleviated by such a bed.
As a general rule, O.C.G.A.§48-8-38 imposes a good faith requirement on sellers of tangible personal property who
make sales without collecting sales and use tax. While this provision only expressly addresses a dealer’s obligation to
exercise good faith when accepting resale or exemption certificates, the Department expects all dealers to exercise
good faith when making any sale of tangible personal property without collecting tax. Dealers must maintain records
to support all purchases and sales (including documentation to support sales made without the collection of tax) for a
period of no less than three years.9
Ruling
A single bed with a frame in three sections so the head, middle, or foot can be raised is durable medical equipment.
Moreover, beds that have at least three sections to raise the head, foot, and middle are commonly used to serve a
medical purpose and not useful to those without an injury or illness. If such a bed and accompanying mattress are sold
to an individual person with an illness or injury (and not to a medical service provider or other business) pursuant to
a prescription issued to that individual, the bed and mattress would be eligible for the durable medical equipment
exemption, and Taxpayer would not be required to collect sales and use tax on the sale.
The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances, and taxpayer in question. Should the circumstances regarding the
transactions change or differ materially from those represented, this ruling may become invalid. Subsequent statutory
or administrative rule changes or judicial interpretations of the statutes or rules upon which this ruling is based may
subject similar future transactions to different tax treatment than that expressed in this ruling.

8

Exemptions from taxation are strictly construed. Ga. Comp. R. & Regs. r. 560-12-1-.18. Thus, the statutory definition
of durable medical equipment is controlling over the examples provided by the Regulation.
9
O.C.G.A. § 48-8-52.