Did SC PLR 92-8 exempt a bioabsorbable guided tissue regeneration dental device as a dental prosthetic device?

Plain-English summary

South Carolina PLR 92-8 held that a guided tissue regeneration (GTR) device was not a dental prosthetic device and therefore did not qualify for the historical sales-and-use-tax exemption.

The device helped guide the regrowth of periodontal tissue or bone. But the cited definition required a prosthetic device to replace a missing body part, and the GTR device did not do that.

How the device worked

The GTR device was a foil-thin, perforated product made of polylactic acid with attached sutures. A dentist placed it beneath the gums around a tooth where bone and periodontal-ligament loss had occurred.

It was bioabsorbable: the body hydrolyzed it over time, so it was not removed. The product was intended to guide tissue regeneration, reduce future tooth loss, or help bone regrow around a titanium post during implant surgery.

Why the exemption failed

Under Section 12-36-110 as quoted in the ruling, dentists generally were treated as the users or consumers of drugs, prosthetic devices, and supplies furnished to patients as part of professional services. Their purchases were therefore retail purchases unless an exemption applied.

Section 12-36-2120(28) exempted dental prosthetic devices. Regulation 117-174.257 defined a prosthetic device as an artificial device replacing a missing body part.

The ruling also cited SC Revenue Ruling 90-1, which treated crowns, bridges, dentures, posts, and implants as dental prosthetic devices, while excluding materials used to construct a prosthetic and items that did not replace a body part.

The GTR device assisted natural tissue regrowth or helped prevent the loss of a functional body part. It did not itself replace the missing tissue or tooth. The exemption therefore did not apply.

What this means for you

Dental-device sellers

A product's clinical use in reconstructive treatment did not make it a prosthetic device under this ruling. The decisive question was whether the product itself replaced a missing body part.

Dentists and periodontists

The ruling treated the dentist as the consumer of supplies used in providing professional services. Without a specific exemption, the purchase was taxable at the dentist level.

Medical-product tax teams

The PLR distinguished a product that supports biological regrowth from an artificial replacement such as a crown, bridge, denture, post, or implant.

Current transactions

Check today's statute, regulations, and Department guidance. The definitions and provider-consumer rule cited here are historical.

Common questions

Q: Was the GTR device a dental prosthetic device?

A: No. It did not replace a missing body part.

Q: What did the device do instead?

A: It guided tissue or bone regrowth and could help prevent tooth loss or support implant surgery.

Q: Who was treated as the consumer of the device?

A: Under the historical rule quoted in the PLR, the dentist was the consumer of supplies furnished as part of professional services.

Q: Did use during implant surgery make the GTR device an implant?

A: No. The ruling distinguished the tissue-guidance product from a prosthetic device that actually replaced a body part.

Q: Can another dental practice rely on PLR 92-8?

A: No. The ruling was temporary, fact-specific, and nonprecedential.

Citations and references

• S.C. Code Ann. § 12-36-910(A) — sales tax on retail sales of tangible personal property
• S.C. Code Ann. § 12-36-1310(A) — use tax on tangible personal property purchased at retail
• S.C. Code Ann. § 12-36-110 — historical retail-sale definition and provider-as-consumer rule
• S.C. Code Ann. § 12-36-2120(28) — historical dental prosthetic-device exemption
• S.C. Regulation 117-174.257 — historical prosthetic-device definition
• SC Revenue Ruling #90-1 — dental prosthetic-device classifications cited by the PLR

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/PLR92-8.pdf

Original ruling text

SC PRIVATE LETTER RULING #92-8

TO:

ABC Company

SUBJECT:

Guided Tissue Regeneration Device
(Sales and Use Tax)

TAX ANALYST:

Deana West

REFERENCE:

S.C. Code Ann. Section 12-36-2120 (Supp. 1991)
Regulation 117-174.257

AUTHORITY:

S.C. Code Ann. Section 12-4-320 (Supp. 1991)
SC Revenue Procedure #87-3

SCOPE:

A Private Letter Ruling is a temporary document issued to a taxpayer,
upon request, and it applies only to the specific facts or circumstances
related in the request. Private Letter Rulings have no precedential value
and are not intended for general distribution.

Question:
Is the Guided Tissue Regeneration device, as described in the facts, a dental prosthetic device
exempt from the sales and use tax pursuant to Code Section 12-36-2120(28)?
Facts:
A Guided Tissue Regeneration Device (GTR) is a new bio-medical device that is about to be
introduced in South Carolina. The GTR will be sold to periodontists and general practitioners
for use in patients with periodontal disease who need reconstructive surgery. The purpose of the
device is to enable and guide the regeneration of periodontal tissues.
The GTR is made of a polylactic acid and is a foil-thin, perforated device with pre-attached
sutures that are used to fasten around the neck of a tooth. The device is placed beneath a
patient's gums in the area where the bone and the periodontal ligament loss occurred. It is bioabsorbable and is not removed from the patient's mouth as the body hydrolyzes the device over
time.

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ABC Company believes the device will most likely reduce the incidence of tooth loss in the
future, making GTR applications an alternative or replacement for dentures and implants.
Furthermore, for patients who have already suffered tooth loss, this device will be used in
implant surgery, guiding re-growth of bone tissue around a titanium post rather than a natural
tooth.
Discussion:
Code Section 12-36-910(A) imposes a sales tax on the gross proceeds of sales upon every person
engaged or continuing within this State in the business of selling tangible personal property at
retail.
Code Section 12-36-1310(A) imposes a use tax on the storage, use or other consumption in this
State of tangible personal property purchased at retail from outside South Carolina for storage,
use or other consumption in this State.
Therefore, there must be a retail sale of tangible personal property in order for the sales tax or
use tax to be imposed. Code Section 12-36-110 provides that a "sale at retail" and "retail sale"
mean all sales of tangible personal property except those defined as wholesale sales. As set forth
in Code Section 12-36-110, the terms include:

(i) sales of drugs, prosthetic devices, and other supplies to hospitals, infirmaries,
sanitariums, nursing homes, and similar institutions, medical doctors, dentists,
optometrists, and veterinarians, if furnished to their patients as a part of the service
rendered. These institutions, companies, and professionals are deemed to be the users
or consumers of the property;...
The law, therefore, provides that a dentist, not the patient, is generally considered the consumer
of the materials used in rendering professional services. Accordingly such purchases are taxable
at the time of purchase by a dentist.
An exemption from the sales and use tax is provided, however, in Code Section 12-36-2120(28)
for dental prosthetic devices as follows:
...medicine and prosthetic devices sold by prescription; hypodermic needles, insulin,
alcohol swabs, and blood sugar testing strips sold to diabetics under the authorization
and direction of a physician; and dental prosthetic devices;....
Guidance as to the definition of the term "prosthetic device" that has been adopted by the Tax
Commission can be found in Regulation 117-174.257 which reads, in part:
Prosthetic Device - an artificial device to replace a missing part of the body.
Eyeglasses, contact lens, hearing aids and orthopedic appliances, such as braces,
wheelchairs and orthopedic custom-made shoes, do not come within the exemption.

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SC Revenue Ruling #90-1 addressed items which constitute dental prosthetic devices. Items
which are considered dental prosthetic devices include: crowns, bridges, dentures, posts, and
implants. Items which are not considered dental prosthetic devices include: amalgam, pins,
materials purchased by a dentist to construct a prosthetic device, and any item which does not
replace a part of the body.
The GTR device described in the facts does not replace a missing part of the body, as required by
Regulation 117-174.257. Rather, it is a new product that assists in the regrowth of tissue or the
prevention of the loss of a functional body part and the need for an artificial substitute.
Conclusion:
The Guided Tissue Regeneration (GTR) device is not a dental prosthetic device as defined in
Regulation 117-174.257 and SC Revenue Ruling #90-1. Accordingly, it is not allowed the sales
and use tax exemption available in Code Section 12-36-2120(28).

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