Does a prescribed medical device that treats a bodily malfunction qualify for the Kansas sales tax exemption for prosthetic and orthopedic appliances?

Plain-English summary

A company that sells a medical device — one that enables a man with impotence to obtain and sustain an erection — asked whether the device qualifies for the Kansas sales tax exemption for prosthetic and orthopedic appliances.

The exemption. K.S.A. 79-3606(r) exempts "all sales of prosthetic and orthopedic appliances prescribed in writing by a person licensed to practice the healing arts, dentistry or optometry." The statute defines those appliances as "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," including accessories attached to motor vehicles, but not motor vehicles or property that becomes a fixture to real property.

The device qualifies. The Department's opinion was that the device "qualifies under the state's definition of prosthetic and orthopedic appliances, since it is 'used to alleviate the malfunction of any part of the body.'" It agreed that the device, "when sold pursuant to a prescription order[,] would qualify as a prosthetic device exempt from Kansas retailers' sales tax."

Bottom line: a device that alleviates a bodily malfunction fits the statutory definition of a prosthetic appliance and is exempt from Kansas sales tax — but only when it is sold pursuant to a written prescription from a licensed practitioner. The prescription requirement is essential to the exemption.

What this means for you

"Alleviate the malfunction" is one of three qualifying uses

The exemption reaches devices that replace a missing body part, alleviate a bodily malfunction, or assist a disabled person's mobility. A device only has to fit one of these categories; here, the "alleviate the malfunction" prong applied.

The written prescription is the gatekeeper

The exemption applies to appliances "prescribed in writing" by a licensed healing-arts, dentistry, or optometry practitioner, and the Department conditioned exemption on sale "pursuant to a prescription order." A seller should obtain and keep the prescription; a sale without one is not covered.

Some things are excluded by definition

The statute excludes motor vehicles and personal property that becomes a fixture to real property, even if otherwise device-like. Vehicle accessories, however, are included.

Keep prescription records

Because the exemption turns on the written prescription, sellers of qualifying devices should retain documentation tying each exempt sale to a valid prescription order.

Common questions

Is our medical device exempt from Kansas sales tax?
If it fits the statutory definition of a prosthetic or orthopedic appliance — for example, it is used to alleviate the malfunction of a part of the body — and it is sold pursuant to a written prescription, then yes, it is exempt under K.S.A. 79-3606(r).

Do we need a prescription for every exempt sale?
Yes. The exemption applies to appliances prescribed in writing by a licensed practitioner, and the Department conditioned exemption on sale pursuant to a prescription order.

What does the definition cover?
Devices used to replace a missing body part, alleviate a bodily malfunction, or assist a disabled person's mobility — plus vehicle accessories — but not motor vehicles or property that becomes a fixture to real property.

Who can write the prescription?
A person licensed to practice the healing arts, dentistry, or optometry.

Citations and references

• K.S.A. 79-3606(r) — exempts sales of prosthetic and orthopedic appliances prescribed in writing by a licensed healing-arts, dentistry, or optometry practitioner; defines the appliances (replace a missing part, alleviate a malfunction, or assist mobility) and excludes motor vehicles and property that becomes a fixture to real property.
• K.A.R. 92-19-59 — authorizes Kansas private letter rulings; this ruling binds the Department only as to the requesting taxpayer and the facts presented.
• Issued October 9, 1998 by Mark D. Ciardullo, Tax Specialist, Office of Policy & Research, Kansas Department of Revenue.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1998-156

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

October 9, 1998

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Dear XXXXXXXXXXXXX:

The purpose of this letter is to respond to your letter dated September 14, 1998.

Your company sells a product called XXXXXXXXXXXXXXXXXXXXXXX.

XXXXXXXXX is a device that can enable a man with impotence to obtain and sustain a satisfactory erection to complete intercourse.

K.S.A. 79-3606(r) exempts from Kansas retailers’ sales tax:

all sales of prosthetic and orthopedic appliances prescribed in writing by a person licensed to practice the healing arts, dentistry or optometry. For the purposes of this subsection, 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 term shall include accessories to be attached to motor vehicles, but such term shall not include motor vehicles or personal property which when installed becomes a fixture to real property;

It is the opinion of the Kansas Department of Revenue that XXXXXXXXX qualifies under the state’s definition of prosthetic and orthopedic appliances, since it is “used to alleviate the malfunction of any part of the body.” The department would agree that XXXXXXXX, when sold pursuant to a prescription order would qualify as a prosthetic device exempt from Kansas retailers’ sales tax.

This is a private letter ruling pursuant to Kansas Administrative Regulation 92-19-59. It is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to an accurate determination by the department, this ruling is null and void. This private letter ruling will be revoked in the future by operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or a published revenue ruling, that materially affects this ruling.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC

Date Composed: 10/12/1998 Date Modified: 10/10/2001

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