Is a medical device an orthopedic surgeon implants to help bones heal after surgery exempt from Kansas sales tax?

Plain-English summary

A supplier asked whether a medical device that an orthopedic surgeon uses to help bones heal after surgery — a device "which is absorbed into the body" — is exempt from Kansas sales tax.

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 broadly 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."

The holding. The Department concluded that "when an orthopedic surgeon uses [the device], which is absorbed into the body, in the normal bone healing process following surgery, said purchase would come within the scope of the sales tax exemption in K.S.A. 79-3606(r)." A device that aids the body's normal bone-healing function fits within the statute's coverage of appliances used to alleviate a malfunction of the body.

A condition to keep in mind. The exemption applies to appliances "prescribed in writing by a person licensed to practice the healing arts, dentistry or optometry." The written-prescription requirement is part of the statute's exemption standard.

Bottom line: a device an orthopedic surgeon implants or applies during surgery to support normal bone healing qualifies as an exempt prosthetic and orthopedic appliance under K.S.A. 79-3606(r).

What this means for you

Medical device suppliers and distributors

Devices that fit the K.S.A. 79-3606(r) definition of a prosthetic or orthopedic appliance — including items used during surgery to aid normal bone healing — can be sold exempt from Kansas sales tax when the statute's requirements, including the written-prescription condition, are met.

Hospitals, surgery centers, and orthopedic practices

Purchases of qualifying prosthetic and orthopedic appliances used in patient care may be exempt under 79-3606(r). Keep documentation showing the device was prescribed in writing by a licensed practitioner.

Anyone applying the medical-device exemption

The exemption turns on the device's function (replacing a missing part, alleviating a bodily malfunction, or aiding a disabled person's mobility) and on the written prescription. Confirm both before treating a sale as exempt.

Common questions

Q: Is a device used to help bones heal after surgery exempt from Kansas sales tax?
A: Yes. The Department ruled such a device comes within the prosthetic and orthopedic appliance exemption in K.S.A. 79-3606(r) when an orthopedic surgeon uses it in the normal bone-healing process following surgery.

Q: What kinds of devices does the exemption cover?
A: Appliances used to replace or substitute for a missing body part, to alleviate a malfunction of any part of the body, or to help a disabled person lead a normal life by facilitating mobility.

Q: Are there conditions on the exemption?
A: Yes. The appliance must be prescribed in writing by 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 practitioner, defined to include devices that alleviate a malfunction of the body; the basis for exempting the bone-healing device.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1999-234

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

October 21, 1999

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Dear Ms. TTTTTTTTT:

We wish to acknowledge receipt of your letter dated October 12, 1999, regarding the application of Kansas Retailers’ Sales tax.

K.S.A. 79-3606(r) exempts from 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 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. . .”

Please be advised that it is the opinion of this office that when an orthopedic surgeon uses TTTT, which is absorbed into the body, in the normal bone healing process following surgery, said purchase would come within the scope of the sales tax exemption in K.S.A. 79-3606(r).

This is a private letter ruling pursuant to K.A.R. 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 ruling will be revoked in the future by the operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or published revenue ruling, that materially affects this private letter ruling. If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 10/27/1999 Date Modified: 10/11/2001

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