Did Illinois classify the listed airway, infusion, insulin-pump, TENS, CPAP, suction, and restraint products for the reduced medical rate?

Plain-English summary

Illinois did not decide whether the requester's tracheotomy supplies, IV equipment, insulin pumps, TENS devices, respirator masks, CPAP equipment, suction tips, or restraints qualified for the reduced medical-appliance rate. The Department said a GIL could not give a specific answer and supplied the governing test instead.

A medical appliance had to be intended by its manufacturer to directly substitute for a malfunctioning body part. A prescription or use by a health professional was not enough. The GIL listed artificial limbs, prostheses, braces, wheelchairs, pacemakers, dialysis machines, hearing aids, eyeglasses, and contact lenses as qualifying examples.

Diagnostic, treatment, and rehabilitation equipment generally did not qualify because it did not directly substitute for a malfunctioning body part. The letter stated historical Illinois state rates of 1% for qualifying medicines and medical appliances and 6.25% for other tangible property, plus applicable local taxes.

What this means for you

Do not infer a product classification from this GIL's general examples. The key evidence is the manufacturer's intended function: direct substitution for a failed body part, rather than diagnosis, treatment, or rehabilitation.

Common questions

Q: Did the Department say insulin pumps or CPAP machines qualified?
A: No. It did not classify any listed item individually.

Q: Does a prescription automatically qualify an item?
A: No. The GIL expressly said not every prescribed or professionally used item qualified.

Citations and references

• 86 Ill. Adm. Code 130.310 and 130.310(c)(2)
• 2 Ill. Adm. Code 1200.110 and 1200.120

Subject

Medical Appliances

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2010.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2010/st-10-0041.pdf

Original ruling text

ST 10-0041-GIL 05/14/2010 MEDICAL APPLIANCES
A medical appliance is defined as an item which is intended by its manufacturer for use in
directly substituting for a malfunctioning part of the body. See 86 Ill. Adm. Code 130.310(c).
(This is a GIL.)

May 14, 2010

Dear Xxxxx:
This letter is in response to your letter dated March 19, 2010, in which you request information.
The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”) are issued by the
Department in response to specific taxpayer inquiries concerning the application of a tax statute or
rule to a particular fact situation. A PLR is binding on the Department, but only as to the taxpayer
who is the subject of the request for ruling and only to the extent the facts recited in the PLR are
correct and complete. Persons seeking PLRs must comply with the procedures for PLRs found in the
Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information Letter
(“GIL”) is to direct taxpayers to Department regulations or other sources of information regarding the
topic about which they have inquired. A GIL is not a statement of Department policy and is not
binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our website at
www.tax.illinois.gov to review regulations, letter rulings and other types of information relevant to your
inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. In your letter you have stated and made inquiry as follows:
COMPANY is requesting a written opinion on the taxability of several medical products
and equipment. I have listed the equipment below with a description of the product.
•

Tracheotomy tubing and care supplies - endotracheal tube is a catheter
inserted in the trachea to maintain a patient airway.

•

IV equipment (needle, catheter(tubing), fluid bags, pole/stand) – intravenous
infusion administration of fluids into a vein by means of a steel needle or plastic
catheter, used most often to maintain fluid and electrolyte balance, or to correct
fluid volume deficits. Many medications are administered by this route.

•

Insulin Pumps – a device consisting of a syringe filled with a predetermined
amount of short-acting insulin, a plastic cannula and a needle, and a pump that
periodically delivers the desired amount of insulin.

•

Tens (transcutaneous electrical nerve stimulation (TENS) transcutaneous neural
stimulation (TNS) – use of a battery-powered device to relieve acute or chronic
pain. Electrodes attached to the skin transmit electrical impulses that produce a
mild tingling, tapping, or massaging sensation. The effectiveness of this method

is thought to depend on its interruption of pain impulses from the periphery to the
central nervous system, increased production of endorphins, and improved blood
supply to the affected part; an increased blood supply encourages healing and
helps reduce muscle spasm.
•

Respirator masks – Air purifying mask that is reusable.

•

CPAP Machines and Masks – (continuous positive airway pressure(CPAP) a
method of positive pressure ventilation used with patients who are breathing
spontaneously, done to keep the alveoli open at the end of exhalation and thus
increase oxygenation and reduce the work of breathing.

•

Yankauer sunction [sic] tip and tubing – a tip attached to a suction tube for
bedside suctioning of an artificial airway.

•

Restraints – the forcible confinement or control of a person.
restraint to a bed, wheelchair or chair.

Specifically,

Thank you for your time and assistance.

DEPARTMENT’S RESPONSE:
Although we cannot give you a specific answer in the form of a General Information Letter, we
hope you find the following helpful. For useful information regarding the taxation of food, drugs,
medicines and medical appliances, I refer you to the Department’s regulation at 86 Ill. Adm. Code
130.310 which can be accessed on the Department’s website. In addition, you may want to review
letters that the Department has previously issued regarding medical appliances which can be found
on the Department’s website.
All gross receipts from sales of tangible personal property in Illinois are subject to Retailers’
Occupation Tax unless an exemption is specifically provided. Medicines and medical appliances are
not taxed at the normal rate of 6.25% plus applicable local taxes. These items are taxed at a reduced
rate of 1% plus applicable local taxes. See 86 Ill. Adm. Code 130.310. Items subject to this lower tax
rate include prescription and nonprescription medicines, drugs, medical appliances, and insulin, urine
testing materials, syringes, and needles used by diabetics, for human use.
The definition of a medical appliance is "an item which is intended by its manufacturer for use
in directly substituting for a malfunctioning part of the body." “Medical appliances” may be prescribed
by licensed health care professionals for use by a patient, purchased by health care professionals for
the use of patients, or purchased directly by individuals. See 86 Ill. Adm. Code 130.310(c)(2). Please
note that not all items prescribed by or used by physicians or other licensed health care professionals
qualify for the low rate.
Medical appliances that qualify for the reduced rate include such items as artificial limbs,
dental prostheses and orthodontic braces, crutches and orthopedic braces, wheelchairs, heart
pacemakers, and dialysis machines. Other examples of items that qualify for the reduced rate are
corrective medical appliances such as hearing aids, eyeglasses and contact lenses. As a general
proposition, diagnostic, treatment, and rehabilitative equipment items do not qualify for the reduced
rate of tax as medical appliances because such items are not "for use in directly substituting for a
malfunctioning part of the body," 86 Ill. Adm. Code 130.310(c)(2).

I hope this information is helpful. If you require additional information, please visit our website
at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217) 782-3336.
Very truly yours,

Debra M. Boggess
Associate Counsel
DMB:msk