Did hospital-owned medical linear accelerators, accessories, and replacement parts qualify for Louisiana's medical-device sales-tax exemption?

Plain-English summary

Medical linear accelerators, their accessories, and their parts did not qualify for the medical-device sales-tax exemption.

The equipment met some statutory conditions: physicians prescribed its use, health-care professionals supervised it, and it treated disease. But it was durable equipment used repeatedly for many patients rather than exclusively by, or administered exclusively to, one patient.

Why exclusivity controlled

The Department read “exclusively” to mean for one person only. A patient, hospital, or doctor's office could buy an exempt device for a single patient's benefit, but equipment designed for numerous applications benefiting different patients fell outside the exemption.

Common questions

Q: Did physician prescription make the equipment exempt?

A: No. Prescription satisfied only one of the exemption's requirements.

Q: Did supervised cancer treatment make it exempt?

A: No. The equipment still had to meet the single-patient exclusivity requirement.

Q: Were accessories and replacement parts treated differently?

A: No. The ruling denied the exemption to the equipment, accessories, and parts.

Q: Could a hospital buy a device tax-free for one patient?

A: The ruling said a hospital or doctor's office could purchase an exempt item on a patient's behalf if the item was exclusively for that one patient.

Citations and references

• La. R.S. 47:305(D)(1)(s) — medical devices exemption
• LAC 61:III.101.C — Private Letter Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA PLR 03-009

Original ruling text

Private Letter Ruling 03-009
Redacted Version
Sales Tax—Medical Devices Exemption
September 9, 2003
This private letter ruling addresses whether or not the parts and accessories purchased for use in
previously installed medical linear accelerators qualify for the medical devices exemption.
Facts
Company manufactures and sells medical linear accelerators. This equipment is sold primarily to
hospitals for use in providing radiation treatment to cancer patients. The equipment requires
specially constructed facilities to house the machines and to provide radiation shielding.
Physicians use the medical linear accelerator equipment to provide radiation treatment to
individual cancer patients. This equipment provides the highest radiation dose rates for rapid
patient treatment. One of Company’s customers has claimed that the equipment and parts
purchased for previously installed equipment fall under the exemption for medical devices as
stated in La. Rev. Stat. Ann. § 47:305(D)(1)(s) (West 2003). This customer asked Company to
stop charging sales tax stating that they would remit sales tax to the state on the appropriate
items and would not pay sales tax charged that they believe is inappropriate.
Issue
Do the medical linear accelerators, accessories, or parts for this equipment meet the definition of
a medical device that is exempted from Louisiana sales and use tax as provided by
§ 47:305(D)(1)(s)?
Ruling
The sales tax exemption for medical devices, which is defined in § 47:305(D)(1)(s), includes:
Any and all medical devices used exclusively by the patient in the medical
treatment of various diseases or administered exclusively to the patient by a physician,
nurse, or other health care professional or health care facility in the medical treatment
of various diseases under the supervision of and prescribed by a licensed physician.
The medical linear accelerator equipment, accessories, and parts do not qualify as exempt medical
devices. While the use of the medical linear equipment meets some of the criteria mandated for the
exemption, including being prescribed by physicians, being used under the supervision of a
physician or healthcare professional, and being used in the treatment of a medical disease, the use of
the medical linear equipment, accessories, and parts does not meet the statutory criterion relating to
being “used exclusively by the patient” or “administered exclusively to the patient.”
By using the word “exclusively” to modify how the device must be used or administered to the
patient, the Louisiana Legislature has limited the application of the exemption. The American
Heritage Dictionary 473 (2d ed. 1982) defines “exclusive” as “not divided or shared with others”
or “single or independent; sole.” Black’s Law Dictionary 564 (6th ed. 1990) defines “exclusive”

Private Letter Ruling No. 03-009
Page 2 of 2

as “…Sole…vested in one person alone. Apart from all others, without the admission of others to
participation.” Because “exclusive” means that something is intended for one person only, the
medical device exemption only applies to items that will be used by or administered to a single
patient.
Patients can purchase exempt medical devices or a hospital or doctor’s office can purchase the
items tax-free on behalf of their patients. In either instance, the exempted item must be
exclusively for the benefit of only one, individual patient. Because the medical linear accelerator
equipment, accessories, and parts are not “used exclusively by the patient” or “administered
exclusively to the patient” but are designed for numerous applications for the benefit of many
different patients, they do not qualify for the medical devices exemption provided in
§ 47:305(D)(1)(s).
Summary
The medical linear accelerator equipment, accessories, and parts do not qualify for the medical
devices exemption in § 47:305(D)(1)(s). These items are not used exclusively on a single patient;
instead, the items of durable medical equipment are used repeatedly for the benefit of many
patients. Thus, these objects do not fit within the scope of the exemption.
If you have any questions or need additional information, please contact the Policy Services
Division at (225) 219-2780.
Sincerely,
Cynthia Bridges
Secretary

By: _____
Christina Fletcher
Attorney
Policy Services Division

A Private Letter Ruling (PLR) is issued under the authority of LAC 61:III.101.C. A PLR provides guidance
to a specific taxpayer at the taxpayer’s request. It is a written statement issued to apply principles of law
to a specific set of facts or a particular tax situation and is limited to the matters specifically addressed. A
PLR does not have the force and effect of law and may not be used or cited as precedent. A PLR is
binding on the Department only as to the taxpayer making the request and only if the facts provided with
the request were truthful and complete and the transaction was carried out as proposed. The
Department’s position concerning the particular tax situation addressed remains in effect for the
requesting taxpayer until a subsequent declaratory ruling, rule, court case, or statute supersedes it.