Are telecommunications devices for the deaf (TDD/TTY) that convert telephone and teletype signals exempt from New York sales tax?

Plain-English summary

Brian Dee, doing business as Edgerton Electronics, sells telecommunications devices for the deaf — TDD or TTY units used with a conventional telephone that convert between telephone and teletype signals so a hard-of-hearing person can communicate by phone. He asked whether these sales are subject to State and local sales tax.

The Department held the devices are exempt — no sales tax.

• The exemption for assistive/prosthetic aids. Section § 1105(a) taxes retail sales of tangible personal property, but § 1115(a)(4) exempts "prosthetic aids, hearing aids, eyeglasses and artificial devices and component parts thereof purchased to correct or alleviate physical incapacity in human beings."
• The regulation names this exact device. 20 NYCRR § 528.5 explains the exemption and, in Example 6, specifically describes "specialized equipment used by the hearing impaired that converts teletype signals into telephone signals and telephone signals into teletype signals" as exempt.
• Result: exempt, State and local. The TDD/TTY devices are the kind of equipment the regulation covers, so they qualify for the § 1115(a)(4) exemption, which also applies to local sales taxes.

What this means for you

Assistive devices that substitute for or restore a body function can be exempt. New York's exemption isn't limited to classic hearing aids and eyeglasses — it reaches equipment purchased to correct or alleviate a physical incapacity, like signal-converters that let a deaf person use a telephone.

Check the regulation's examples, not just the statute. 20 NYCRR § 528.5 lists concrete examples (including this one). When your product matches an example, you have strong footing for the exemption.

No resale or exemption certificate is needed from the customer here. The exemption is built into the nature of the product; the seller simply does not charge tax on a qualifying exempt sale. (Keep records showing the items sold qualify.)

Common questions

Q: Are TDD/TTY devices for the deaf taxable in New York?
A: No. They are exempt as devices purchased to correct or alleviate a physical incapacity under § 1115(a)(4), and 20 NYCRR § 528.5 Example 6 names this exact converter.

Q: Does the exemption cover local sales tax?
A: Yes. The Department said the same exemption applies to local sales taxes.

Q: What about other assistive equipment I sell?
A: The test is whether the item is a prosthetic/assistive/artificial device purchased to correct or alleviate a physical incapacity and is primarily used for that purpose. Match your product to § 1115(a)(4) and the § 528.5 qualifications.

Citations and references

Statutes:

• Tax Law § 1105(a) — tax on receipts from retail sales of tangible personal property
• Tax Law § 1115(a)(4) — exemption for prosthetic aids, hearing aids, eyeglasses, and artificial devices (and component parts) purchased to correct or alleviate physical incapacity

Regulations:

• 20 NYCRR § 528.5 — prosthetic aids exemption and qualifications, including Example 6 (teletype/telephone signal converters for the hearing impaired are exempt)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1982.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a82_41s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-82(41)S
Sales Tax
November 24, 1982

STATE OF NEW YORK
STATE TAX COMMISSION
ADVISORY OPINION

PETITION NO. S820111A

On January 11, 1982 a Petition for Advisory Opinion was received from Brian Dee, DBA
Edgerton Electronics, 933 Motor Parkway, Hauppauge, New York 11788.
The issue raised is whether Petitioner's sales of certain telecommunications devices for the
deaf are subject to State and local sales taxes.
Petitioner sells telecommunications devices for use by individuals who are hard of hearing.
These devices (TDD or TTY) are used in conjunction with conventional telephones by providing for
interconversion of telephone and teletype signals.
Section 1105(a) of the Tax Law, contained in Article 28, imposes the State sales tax on the
"receipts from every retail sale of tangible personal property, except as otherwise provided in this
article." Section 1115(a)(4) of the Tax Law provides for such an exemption, applicable to "Prosthetic
aids, hearing aids, eyeglasses and artificial devices and component parts thereof purchased to correct
or alleviate physical incapacity in human beings."
Section 528.5 of the New York State Sales and Use Tax Regulations further explicates such
statutory provision, as follows: "Prosthetic aids . . . . (a) Exemption. Prosthetic aids, hearing aids,
eyeglasses and artificial devices and component parts thereof, purchased to correct or alleviate
physical incapacity in human beings are exempt from the tax. (b) Qualifications. (1) In order to
qualify as a prosthetic aid, a hearing aid, eyeglasses or an artificial device, the property must either
completely or partially replace a missing body part or the function of a permanently inoperative or
permanently malfunctioning body part must be primarily and customarily used for such purposes and
not be generally useful in the absence of illness, injury or physical incapacity.
. . .
Example 6:

Specialized equipment used by the hearing impaired
that converts teletype signals into telephone signals
and telephone signals into teletype signals and thus
enables a hearing impaired person to communicate by
telephone, are exempt . . . ." 20 NYCRR 528.5.

ROBERT W. BOUCHARD, ACTING COMMISSIONER
GABRIEL B. DiCERBO , DEPUTY COMMISSIONER
FRANK J. PUCCIA, DIRECTOR
TP-8 (8/82)

-2­
TSB-A-82(41)S
Sales Tax
November 24, 1982

The devices described by Petitioner are of a type to which the foregoing regulation provision
applies. Accordingly, they constitute property to which the exemption provision contained in section
1115(a)(4) of the Tax Law applies. The same exemption is also applicable to local sales taxes.

DATED: April 5, 1982

s/GABRIEL DI CERBO
Deputy Director
Technical Services Bureau