Which medicines, prosthetic devices, diabetic supplies, and other medical products did RR 03-2 treat as exempt from South Carolina sales tax?
Apply this to your situation
This page answers the general question as of 2003. Ezel answers yours, under current South Carolina tax law, with citations.
Plain-English summary
South Carolina Revenue Ruling #03-2 was a detailed historical matrix for medicines, prosthetic devices, diabetic supplies, nutrition products, oxygen, hearing aids, wheelchairs, disposable supplies, and other medical products.
Its central distinction was between medical providers and individual patients. Hospitals, doctors, nursing homes, and similar providers were generally treated as the users or consumers of drugs and supplies furnished as part of care, making their purchases taxable unless a specific exemption applied.
For individuals, the ruling applied product-specific conditions. Prescription medicines could qualify; diabetic needles, insulin, testing items, and similar supplies required a diabetic purchaser and written physician authorization; hearing aids had a separate exemption; and specified disposable IV supplies required a prescription and use outside listed institutions.
The ruling defined a prosthetic device narrowly as an artificial device replacing a missing body part. Replacing or assisting a missing function was not enough. Non-dental prosthetics also had to be sold by prescription under the ruling's framework.
RR 10-2 expressly superseded RR 03-2, and RR 11-3 later superseded RR 10-2.
What this means for you
Pharmacies and medical suppliers
Do not classify an item solely by its medical purpose. The exact statutory category, prescription requirement, purchaser, place of use, and documentation controlled.
Hospitals, clinics, and physicians
Providing an item to a patient as part of professional care generally made the provider the taxable consumer, subject to specific statutory exceptions.
Patients and caregivers
Similar-looking items could receive different treatment. For example, hearing aids were exempt under a separate provision, while wheelchairs were not exempt under the ruling's stated rules.
Common questions
Q: Were all prescription medicines exempt?
A: The ruling distinguished sales to individuals from purchases by medical providers and applied additional special rules for particular medicines and uses.
Q: Did every implanted or assistive device qualify as a prosthetic?
A: No. It had to replace a missing body part, not merely a missing or impaired function.
Q: Were diabetic supplies exempt?
A: The listed items were exempt when sold to a diabetic under a physician's written authorization and direction.
Q: Is RR 03-2 current?
A: No. RR 10-2 expressly superseded it, and RR 11-3 later superseded RR 10-2.
Citations and references
- S.C. Code Ann. § 12-36-2120(28) — medicines, prosthetics, diabetic supplies, and specified disposable supplies
- S.C. Code Ann. § 12-36-2120(38) — hearing aids
- S.C. Code Ann. § 12-36-110(1)(i) — providers as users or consumers
- S.C. Code Ann. § 12-36-950 — presumption and exemption proof
- S.C. Regulations 117-308.8 and 117-332 — medical institutions and product definitions
- SC Revenue Ruling 10-2 — expressly superseded RR 03-2
- SC Revenue Ruling 11-3 — later expressly superseded RR 10-2
Source
- Landing page: SC Advisory Opinion Search
- Original PDF: RR03-2.pdf
- Official superseding RR 10-2 PDF: RR10-2.pdf
- Official later RR 11-3 PDF: RR11-3.pdf
Original ruling text
State of South Carolina
Department of Revenue
301 Gervais Street, P. O. Box 125, Columbia, South Carolina 29214
Website Address: http://www.sctax.org
SC REVENUE RULING #03-2
SUBJECT:
Medicines, Prosthetic Devices and Other Medical Supplies
(Sales and Use Tax)
EFFECTIVE DATE: Applies to all periods open under the statute.
SUPERSEDES:
All previous advisory opinions and any oral directives in conflict
herewith.”
REFERENCES:
S. C. Code Ann. Section 12-36-2120 (2000, Supp. 2001)
S. C. Code Ann. Section 12-36-110 (2000)
SC Regulation 117-308.8
SC Regulation 117-332
S. C. Code Ann. Section 12-36-950 (2000)
AUTHORITY:
S. C. Code Ann. Section 12-4-320 (2000)
S. C. Code Ann. Section 1-23-10(4) (Supp. 2001)
SC Revenue Procedural Bulletin #03-1
SCOPE:
The purpose of a Revenue Ruling is to provide guidance to the public and
to Department personnel. It is a written statement issued to apply
principles of tax law to a specific set of facts or a general category of
taxpayers. A Revenue Ruling is an advisory opinion; it does not have the
force or effect of law and is not binding on the public. It is, however, the
Department’s position and is binding on agency personnel until
superseded or modified by a change in statute, regulations, court
decisions, or advisory opinion.
INTRODUCTION:
The South Carolina sales and use tax statute exempts the retail sale of certain medicines,
prosthetic devices and medical supplies. The purpose of this advisory opinion is to provide
guidance as to the application of these exemptions with respect to sales of these items to
individuals, doctors, clinics and hospitals and similar facilities.
LAW AND DISCUSSION:
Code Section 12-36-2120(28) exempts from the sales and use tax:
(a) medicine and prosthetic devices sold by prescription, prescription medicines used to
prevent respiratory syncytial virus, prescription medicines and therapeutic
radiopharmaceuticals used in the treatment of cancer, lymphoma, leukemia, or related
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diseases, including prescription medicines used to relieve the effects of any such
treatment, and free samples of prescription medicine distributed by its manufacturer and
any use of these free samples;
(b) hypodermic needles, insulin, alcohol swabs, blood sugar testing strips, monolet lancets,
dextrometer supplies, blood glucose meters, and other similar diabetic supplies sold to
diabetics under the authorization and direction of a physician;
(c) disposable medical supplies such as bags, tubing, needles, and syringes, which are
dispensed by a licensed pharmacist in accordance with an individual prescription
written for the use of a human being by a licensed health care provider, which are used
for the intravenous administration of a prescription drug or medicine, and which come
into direct contact with the prescription drug or medicine. This exemption applies only
to supplies used in the treatment of a patient outside of a hospital, skilled nursing
facility, or ambulatory surgical treatment center;
(d) medicine donated by its manufacturer to a public institution of higher education for
research or for the treatment of indigent patients; and
(e) dental prosthetic devices;
Furthermore, Code Section 12-36-110 defines "retail sale," in part as:
(1)(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;
SC Regulation 117-308.8 states:
Hospitals, infirmaries, sanitariums, nursing homes and like institutions are engaged
primarily in the business of rendering services. They are not liable for the sales tax with
respect to their gross proceeds or receipts from meals, bandages, dressings, drugs, x-ray
photographs and other tangible personal property where such property is used in the
rendering of the primary medical service to patients. This is true irrespective of whether or
not such tangible items are billed separately to their patients. Hospitals, infirmaries,
sanitariums, nursing homes and like institutions are deemed to be the users or consumers of
such tangible personal property and the instate sellers of these items are required to report
and remit the tax due on the sale of such property to the hospitals, infirmaries, sanitariums,
nursing homes, and like institutions or in the case of out-of-state purchases, use tax shall be
reported and remitted by the purchaser.
Where meals and beverages are furnished by hospitals, infirmaries, sanitariums, nursing
homes and like institutions to the patient as a part of their primary medical service, with or
without a separate charge being made, the hospitals, infirmaries, sanitariums, nursing
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homes and like institutions are deemed to be the users or consumers of the prepared meal if
same is purchased or acquired or the users or consumers of the unprepared food products if
the hospitals, infirmaries, sanitariums, nursing homes and like institutions purchase such
products and prepare the meal.
Sales of meals, foodstuffs or beverages by hospitals, infirmaries, sanitariums, nursing
homes or like institutions to members of the staff, nurses, attendants, employees, visitors or
patients, other than those meals furnished as a part of the primary medical service rendered,
are sales at retail and such institution is required to obtain a retail license for each location
and report and remit the sales tax on the gross proceeds of such sales, to include sales for
cash, credit, payroll deduction and sales at special event functions. This includes sales
made in institutions, cafeterias, snack bars, canteens and commissaries.
Where drugs, prosthetic devices and other supplies are furnished to their patients as a part
of the medical service rendered, such hospitals, infirmaries, sanitariums, nursing homes
and like institutions are deemed to be users or consumers of such drugs, prosthetic devices
and other supplies.
Gases such as oxygen, etc., sold to hospitals, medical doctors, dentists, and others for
professional use are subject to the sales or use tax, whichever may apply.
SC Regulation 117-332 (previously SC Regulation 117-174.257), "Medicines, Prosthetic
Devices and Hearing Aids," states:
Code Section 12-36-2120(28) exempts from the sales and use taxes:
(a) medicines and prosthetic devices sold by prescription, [prescription medicines used to
prevent respiratory syncytial virus,] 1 prescription medicines and therapeutic
radiopharmaceuticals used in the treatment of cancer, lymphoma, leukemia, or related
diseases, including prescription medicines used to relieve the effects of any such
treatment, and free samples of prescription medicine distributed by its manufacturer
and any use of these free samples;
(b) hypodermic needles, insulin, alcohol swabs, blood sugar testing strips, monolet lancets,
dextrometer supplies, blood glucose meters, and other similar diabetic supplies sold to
diabetics under the authorization and direction of a physician;
(c) medicine donated by its manufacturer to a public institution of higher education for
research or for the treatment of indigent patients; and
(d) dental prosthetic devices.
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The exemption for “prescription medicines used to prevent respiratory syncytial virus” became effective
on June 18, 2003 and is not presently shown in SC Regulation 117-332. A proposal to modify this
regulation to include this new exemption will be submitted to the General Assembly in the near future.
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To assist in the administration of this exemption, the Department has adopted definitions
for the terms "medicine" and "prosthetic devices" as follows:
"Medicine" - a substance or preparation used in treating disease.
"Prosthetic Device" - an artificial device to replace a missing part of the body.
The sale of prescription lenses that replace a missing part of the eye are exempted from the
tax, as for example eyeglasses prescribed for a person whose natural lenses have been
surgically removed.
Eyeglasses, contact lens, hearing aids and orthopedic appliances, such as braces,
wheelchairs and orthopedic custom-made shoes, do not come within the exemption at Code
Section 12-36-2120(28). However, sales of hearing aids are exempt pursuant to Code
Section 12-36-2120(38).
Hypodermic needles, insulin, alcohol swabs, blood sugar testing strips, monolet lancets,
dextrometer supplies, blood glucose meters, and other similar diabetic supplies sold to
diabetics are only exempt if sold pursuant to the written authorization and direction of a
physician. (Emphasis added.)
Code Section 12-36-950 states:
It is presumed that all gross proceeds are subject to the tax until the contrary is established.
The burden of proof that the sale of tangible personal property is not a sale at retail is on
the seller.
However, if the seller receives a resale certificate signed by the purchaser stating that the
property is purchased for resale, the liability for the sales tax shifts from the seller to the
purchaser.
The resale certificate must include the purchaser's name, address, retail sales tax license
number, and any other provisions or information considered necessary by the department.
The department may require the seller to provide information it considers necessary for the
administration of this section.
In reviewing the above, one issue that arises concerns the taxability of medicines used by
doctors, nursing homes, hospitals and similar institutions in their practice in providing their
professional services.
A similar issue was addressed in 1997 in an unpublished decision by the South Carolina Court of
Appeals in Associated Medical Specialist, P.A. v. South Carolina Tax Commission and South
Carolina Department Of Revenue, SC Ct. of App., Unpublished Opinion No. 97-UP-447.
In Associated Medical, the Court held that a professional association specializing in oncology
and hematology was the user and consumer of chemotherapy drugs it administered to patients as
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part of its professional services. The Court, while acknowledging that these were prescription
drugs, held that these drugs were not sold by prescription. Therefore, the sale of these drugs to
the professional association did not qualify for the exemption for “medicine ... sold by
prescription.” See Code Section 12-36-2120(28). Note, the exemption for prescription
medicines used in the treatment of cancer, lymphoma, leukemia, or related diseases or used to
relieve the effects of any such treatment was subsequently enacted by the General Assembly in
1998 and became effective on June 28, 1999. (Act 362, Section 2, of 1998)
The terms “sale at retail” and “retail sale” found in Code Section 12-36-110(i) include 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.” That section further states that
“[t]hese institutions, companies, and professionals are deemed to be the users or consumers of
the property.”
The exemption does not exempt medicine. It only exempts “medicine … sold by prescription;”
“prescription medicines used to prevent respiratory syncytial virus,” “prescription medicines and
therapeutic radiopharmaceuticals used in the treatment of cancer, lymphoma, leukemia, or
related diseases, including prescription medicines used to relieve the effects of any such
treatment;” and certain free samples or donated medicines.
Therefore, in order for the retail sale of medicine (other than those used to prevent respiratory
syncytial virus or used in the treatment of cancer, lymphoma, leukemia, or related diseases,
including prescription medicines used to relieve the effects of any such treatment) to be exempt,
the retail sale must be one in which a prescription is used to purchase the medicine. In addition,
the statute specifically exempts “prescription medicines used to prevent respiratory syncytial
virus” and “prescription medicines and therapeutic radiopharmaceuticals used in the treatment of
cancer, lymphoma, leukemia, or related diseases, including prescription medicines used to
relieve the effects of any such treatment.” These provisions would have been unnecessary if the
exemption for “medicine … sold by prescription” exempted all prescription medicines purchased
by doctors or hospitals for the benefit of a patient of the doctor or hospital. However, the
exemption only applies to medicines when sold by prescription.
In addition, the Court noted that “[i]t is not unusual for a sales and use tax exemption to focus on
a transaction to determine whether an item is exempt from taxation. A substantial number of
sales tax and use exemptions focus on items sold by or to particular customers, or items used by
a particular customer.” As such, the Court noted that the language of the statute does not exempt
prescription medicines sold to a professional medical association since they were not “sold by
prescription.”
Finally, SC Technical Advice Memorandum #88-23 states "it is unreasonable to interpret the
intent of the legislature so as to exempt...medicines and drugs merely because such items are sold
pursuant to a prescription. Therefore, … medicines [to be exempt] must require a prescription."
Based on the above, sales by suppliers to doctors, nursing homes, hospitals and similar
institutions of prescription medicines for use in their practices and institutions in treating patients
are retail sales. However, such sales to doctors, nursing homes, hospitals and similar institutions
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are not sales “by prescription” and do not qualify for the exemption found in Code Section 1236-2120(28), unless such prescription medicines are used by the doctor to prevent respiratory
syncytial virus or in “the treatment of cancer, lymphoma, leukemia, or related diseases, [or]
…used to relieve the effects of any such treatment.” In addition, the phrase “related diseases”
limits the exemption for medicines used in “the treatment of cancer, lymphoma, leukemia, or
related diseases, [or] …used to relieve the effects of any such treatment” to medicines used to
treat cancer, lymphoma, leukemia, and other cancer diseases or medicines used to relieve the
effects of any such treatment of cancer, lymphoma, leukemia, and other cancer diseases.
The principles established in Associated Medical, also apply to prosthetic devices. The
exemption does not exempt prosthetic devices. It only exempts “prosthetic devices sold by
prescription.” Therefore, in order for the prosthetic devices to be exempt, the retail sale must be
one in which a prescription is used to purchase the prosthetic device. In addition, the statute
specifically exempts “dental prosthetic devices.” This provision would have been unnecessary if
the exemption for “prosthetic devices sold by prescription” exempted dental prosthetic devices
purchased by dentists from dental labs for the benefit of a particular patient of the dentist.
However, the exemption only applies to prosthetic devices when sold by prescription.
Therefore, sales of prosthetic devices, other than dental prosthetic devices, to a hospital, nursing
home, or a similar institution or doctor are not exempt since such sales do not require a
prescription and are not sold by prescription.
SUMMARY OF EXEMPTIONS FOR MEDICINES, PROSTHETIC DEVICES, AND
OTHER SUPPLIES UNDER CODE SECTION 12-36-2120(28):
Based on the above statutes and regulations, it is the opinion of the Department that the
application of the above exemptions for medicines is as follows:
Medicine sold by prescription. In order for this exemption to be applicable, the medicine
must be of a type that requires a prescription, the sale must require a prescription, and must
actually be sold by prescription. As such, sales of medicine to a hospital, nursing home, or
a similar institution or doctor are not exempt since such sales do not require a prescription.
Prescription medicines used to prevent respiratory syncytial virus. In order for this
exemption to be applicable, the medicine must be of a type that requires a prescription;
however, the medicine does not need to be sold by prescription. As such, sales of these
medicines (to be used for the above purposes) to a hospital, nursing home, or a similar
institution or doctor are exempt.
Prescription medicines and therapeutic radiopharmaceuticals used in the treatment
of cancer, lymphoma, leukemia, or related diseases. In order for this exemption to be
applicable, the medicine must be of a type that requires a prescription (other than
therapeutic radiopharmaceuticals); however, the medicine does not need to be sold by
prescription. As such, sales of these medicines and therapeutic radiopharmaceuticals (to be
used for the above purposes) to a hospital, nursing home, or a similar institution or doctor
are exempt.
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Prescription medicines used to relieve the effects of the treatment of cancer,
lymphoma, leukemia, or related diseases. In order for this exemption to be applicable,
the medicine must be of a type that requires a prescription; however, the medicine does not
need to be sold by prescription. As such, sales of these medicines (to be used for the above
purposes) to a hospital, nursing home or doctor are exempt.
Free samples of prescription medicine distributed by its manufacturer and any use of
these free samples. In order for this exemption to be applicable, the medicine must be of a
type that requires a prescription.
Medicine donated by its manufacturer to a public institution of higher education for
research or for the treatment of indigent patients. This exemption applies to all types of
medicines, not just prescription medicines.
Hypodermic needles, insulin, alcohol swabs, blood sugar testing strips, monolet
lancets, dextrometer supplies, blood glucose meters, and other similar diabetic
supplies. In order for this exemption to be applicable, these items must be sold to a diabetic
under the written authorization and direction of a physician.
Disposable medical supplies. In order for this exemption to be applicable, disposable
medical supplies such as bags, tubing, needles, and syringes, must be dispensed by a
licensed pharmacist in accordance with an individual prescription written for the use of a
human being by a licensed health care provider, must be used for the intravenous
administration of a prescription drug or medicine, and must come into direct contact with
the prescription drug or medicine. This exemption applies only to supplies used in the
treatment of a patient outside of a hospital, skilled nursing facility, or ambulatory surgical
treatment center. The exemption applies to "disposable" medical supplies sold on or after
August 17, 2000 and does not apply to items that are reusable such as electronic pumps and
other medical equipment. In addition, the exemption does not apply to supplies, such as
gauze, that do not require a prescription in order to be sold to the patient.
Prosthetic devices sold by prescription. In order for this exemption to be applicable, the
device, the sale must require a prescription and the device must actually be sold by
prescription and the device must replace a missing part of the body. A device that merely
replaces a missing function is not exempt. As such, sales of prosthetic devices to a hospital,
nursing home, or a similar institution or doctor are not exempt since such sales do not
require a prescription.
Dental prosthetic devices. In order for this exemption to be applicable, the device must
pertain to dentistry and must replace a missing part of the body. A device that merely
replaces a missing function is not exempt. The sale does not require a prescription.
SUMMARY OF OTHER RELEVANT EXEMPTIONS:
The statute also provides several other exemptions that may or may not apply. Code Section 1236-2120 also exempts from the sales ands use tax:
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Sales to the federal government. Code Section 12-36-2120(2) exempts sales of “tangible
personal property … to the federal government. Commission Decision #93-2 held that sales
paid for via Medicare or Medicaid are not sales to the federal government.
Sales to charitable hospitals. Code Section 12-36-2120(47) exempts sales of tangible
personal property to charitable hospitals that are exempt from property taxation under
Section 12-37-220; predominantly serve children; and where the care is provided without
charge to the patient.
Sales of hearing aids. Code Section 12-36-2120(38) exempts sales of “hearing aids, as
defined by Section 40-25-20(5).” Sales of hearing aid batteries and cords are not exempt.
Sales during the sales tax holiday. Code Section 12-36-2120(57) exempts from the sales
and use tax:
(a) sales taking place during a period beginning 12:01 a.m. on the first Friday in August
and ending at twelve midnight the following Sunday of:
(i) clothing;
(ii) clothing accessories including, but not limited to, hats, scarves, hosiery, and
handbags;
(iii) footwear;
(iv) school supplies including, but not limited to, pens, pencils, paper, binders,
notebooks, books, bookbags, lunchboxes, and calculators;
(v) computers, printers and printer supplies, and computer software.
(b) The exemption allowed by this item does not apply to:
(i) sales of jewelry, cosmetics, eyewear, wallets, watches;
(ii) sales of furniture;
(iii) a sale of an item placed on layaway or similar deferred payment and delivery
plan however described;
(iv) rental of clothing or footwear;
(v) a sale or lease of an item for use in a trade or business.
(c) Before July tenth of each year, the department shall publish and make available to the
public and retailers a list of those articles qualifying for the exemption allowed by this
item.
Note: Since the sales tax holiday applies to clothing and footwear, the exemption may
apply to certain clothing and footwear worn for medical reasons.
QUESTIONS AND ANSWERS:
A. Sales to Federal Government Hospitals and Charitable Hospitals Predominantly Serving
Children Where Care Is Provided Without Charge To The Patient:
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1. Are sales of non-prescription and prescription medicines by a pharmaceutical supplier to a
charitable hospital predominantly serving children where care is provided without charge to
the patient exempt from the sales and use tax?
Sales of non-prescription and prescription medicines by a pharmaceutical supplier to a
charitable hospital predominantly serving children where care is provided without charge to
the patient are exempt from the sales and use tax under Code Section 12-36-2120(47),
provided the hospital is exempt from property taxes under Section 12-37-220.
- Are sales of non-prescription and prescription medicines by a pharmaceutical supplier to a
federal government hospital (e.g., Veterans Administration hospital) exempt from the sales
and use tax?
Sales of non-prescription and prescription medicines by a pharmaceutical supplier to a to a
federal government hospital (e.g., Veterans Administration hospital) are exempt from the
sales and use tax under Code Section 12-36-2120(2). - Are sales by a pharmaceutical or medical equipment supplier of hypodermic needles, insulin,
alcohol swabs, blood sugar testing strips, monolet lancets, dextrometer supplies, blood
glucose meters, and other similar supplies for use in treating diabetics to a charitable hospital
predominantly serving children where care is provided without charge to the patient exempt
from the sales and use tax?
Sales by a pharmaceutical or medical equipment supplier of hypodermic needles, insulin,
alcohol swabs, blood sugar testing strips, monolet lancets, dextrometer supplies, blood
glucose meters, and other similar supplies for use in treating diabetics to a charitable hospital
predominantly serving children where care is provided without charge to the patient are
exempt from the sales and use tax under Code Section 12-36-2120(47), provided the hospital
is exempt from property taxes under Section 12-37-220. - Are sales by a pharmaceutical or medical equipment supplier of hypodermic needles, insulin,
alcohol swabs, blood sugar testing strips, monolet lancets, dextrometer supplies, blood
glucose meters, and other similar supplies for use in treating diabetics to a federal
government hospital (e.g., Veterans Administration hospital) exempt from the sales and use
tax?
Sales by a pharmaceutical or medical equipment supplier of hypodermic needles, insulin,
alcohol swabs, blood sugar testing strips, monolet lancets, dextrometer supplies, blood
glucose meters, and other similar supplies for use in treating diabetics to a federal
government hospital (e.g., Veterans Administration hospital) are exempt from the sales and
use tax under Code Section 12-36-2120(2). - Are sales of tangible personal property to a federal government hospital (e.g., Veterans
Administration hospital) exempt from the sales and use tax?
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Sales of tangible personal property to a federal government hospital (e.g., Veterans
Administration hospital) are exempt from the sales and use tax under Code Section 12-362120(2).
- Are sales of tangible personal property to a charitable hospital predominantly serving
children where care is provided without charge to the patient exempt from the sales and use
tax?
Sales of tangible personal property to a charitable hospital predominantly serving children
where care is provided without charge to the patient are exempt from the sales and use tax
under Code Section 12-36-2120(47), provided the hospital is exempt from property taxes
under Section 12-37-220.
B. Sales to Doctors, Nursing Homes, Hospitals and Similar Institutions (Not Discussed in
Section “A” Above): - Are sales of prescription medicines by a pharmaceutical supplier to a doctor, nursing home,
hospital or similar institution for use in treating their patients exempt from the sales and use
tax ?
Sales of prescription medicines by a pharmaceutical supplier to a doctor, nursing home,
hospital or similar institution for use in treating their patients are not sales “by prescription”
and do not qualify for the exemption found in Code Section 12-36-2120(28), unless such
prescription medicines are used by the doctor, nursing home, hospital or similar institution to
prevent respiratory syncytial virus or in “the treatment of cancer, lymphoma, leukemia, or
related diseases, [or] …used to relieve the effects of any such treatment” of cancer,
lymphoma, leukemia, or related diseases.
The phrase “related diseases” limits the exemption for medicines used in “the treatment of
cancer, lymphoma, leukemia, or related diseases, [or] …used to relieve the effects of any
such treatment” to prescription medicines used to treat cancer, lymphoma, leukemia, and
other cancer diseases or prescription medicines used to relieve the effects of any such
treatment of cancer, lymphoma, leukemia, and other cancer diseases. - Are sales of prescription medicines by a pharmaceutical supplier to a doctor, nursing home,
hospital or similar institution for use in preventing respiratory syncytial virus or in the
treatment of cancer, lymphoma, leukemia, or related diseases, or used to relieve the effects of
any such treatment of cancer, lymphoma, leukemia, and other cancer diseases exempt from
the sales and use tax?
Sales of prescription medicines by a pharmaceutical supplier to a doctor, nursing home,
hospital or similar institution for use in preventing respiratory syncytial virus or in the
treatment of cancer, lymphoma, leukemia, or related diseases, or used to relieve the effects of
any such treatment of cancer, lymphoma, leukemia, and other cancer diseases are exempt
from the sales and use tax
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The phrase “related diseases” limits the exemption for medicines used in “the treatment of
cancer, lymphoma, leukemia, or related diseases, [or] …used to relieve the effects of any
such treatment” to prescription medicines used to treat cancer, lymphoma, leukemia, and
other cancer diseases or medicines used to relieve the effects of any such treatment of cancer,
lymphoma, leukemia, and other cancer diseases.
- Are sales of non-prescription medicines by a pharmaceutical supplier to a doctor, nursing
home, hospital or similar institution for use in treating their patients exempt from the sales
and use tax ?
Sales of non-prescription medicines by a pharmaceutical supplier to a doctor, nursing home,
hospital or similar institution for use in treating their patients do not qualify for the
exemption found in Code Section 12-36-2120(28), and are subject to the tax. - Are sales of hearing aids to a doctor, nursing home, hospital or similar institution for use in
treating their patients exempt from the sales and use tax?
Sales of sales of hearing aids to a doctor, nursing home, hospital or similar institution for use
in treating their patients are exempt from the sales and use tax under Code Section 12-362120(38), provided such hearing aids meet the definition found in Code Section 40-25-20(5).
Note: Sales of hearing aid batteries and cords are not exempt. - Are sales of prosthetic devices, other than a dental prosthetic device, to a doctor or hospital
that will be surgically implanted in a patient exempt from the sales and use tax?
No, since the sale to the doctor or hospital does not require a prescription and is not actually
being sold by prescription, the sale of the device to the doctor or hospital does not qualify for
the exemption, and is therefore subject to the tax. - Are sales of dental prosthetic devices to a doctor or hospital that will be surgically implanted
in a patient exempt from the sales and use tax?
Yes, provided the dental prosthetic device is a dental “prosthetic device” as defined in SC
Regulation 117-332. - Are sales of enteral nutrition formulas to a doctor, nursing home, hospital or similar
institution for use in treating their patients exempt from the sales and use tax?
Sales of enteral nutrition formulas to a doctor, nursing home, hospital or similar institution
for use in treating their patients do not qualify for the exemption found in Code Section 1236-2120(28), unless such medicines are of a type that requires a prescription and are used by
the doctor, nursing home, hospital or similar institution in “the treatment of cancer,
lymphoma, leukemia, or related diseases, [or] …used to relieve the effects of any such
treatment.”
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The phrase “related diseases” limits the exemption for prescription medicines used in “the
treatment of cancer, lymphoma, leukemia, or related diseases, [or] …used to relieve the
effects of any such treatment” to prescription medicines used to treat cancer, lymphoma,
leukemia, and other cancer diseases or medicines used to relieve the effects of any such
treatment of cancer, lymphoma, leukemia, and other cancer diseases.
- Are sales of total parenteral nutrition (“TPN”) solutions to a doctor, nursing home, hospital
or similar institution for use in treating their patients exempt from the sales and use tax?
Sales of total parenteral nutrition (“TPN”) solutions to a doctor, nursing home, hospital or
similar institution for use in treating their patients do not qualify for the exemption found in
Code Section 12-36-2120(28), unless such medicines are of a type that requires a prescription
and are used by the doctor, nursing home, hospital or similar institution in “the treatment of
cancer, lymphoma, leukemia, or related diseases, [or] …used to relieve the effects of any
such treatment.” - Are sales of oxygen sold in cylinders and oxygen concentrators to a doctor, nursing home,
hospital or similar institution for use in treating their patients exempt from the sales and use
tax?
Sales of oxygen sold in cylinders and oxygen concentrators to a doctor, nursing home,
hospital or similar institution for use in treating their patients do not qualify for the
exemption found in Code Section 12-36-2120(28), unless such medicines (oxygen sold in
cylinders and oxygen concentrators) are of a type that requires a prescription and are used by
the doctor, nursing home, hospital or similar institution in preventing respiratory syncytial
virus or in “the treatment of cancer, lymphoma, leukemia, or related diseases, [or] …used to
relieve the effects of any such treatment” of cancer, lymphoma, leukemia, or related diseases.
The phrase “related diseases” limits the exemption for prescription medicines used in “the
treatment of cancer, lymphoma, leukemia, or related diseases, [or] …used to relieve the
effects of any such treatment” to prescription medicines used to treat cancer, lymphoma,
leukemia, and other cancer diseases or medicines used to relieve the effects of any such
treatment of cancer, lymphoma, leukemia, and other cancer diseases.
Note: Sales of masks, tubing, regulators, and tank holders do no come within the exemption
and are subject to the sales and use tax. - Are sales of disposable medical supplies such as bags, tubing, needles, and syringes to a
doctor, nursing home, hospital or similar institution for use in treating their patients exempt
from the sales and use tax?
Since sales of disposable medical supplies such as bags, tubing, needles, and syringes to a
doctor, nursing home, hospital or similar institution for use in treating their patients do not
meet the requirements of the exemption under Code Section 12-36-2120(28), such sales are
not exempt from the sales and use tax.
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11. Are sales of wheelchairs to a doctor, nursing home, hospital or similar institution for use in
treating their patients exempt from the sales and use tax?
No.
- Are sales by a pharmaceutical or medical equipment supplier to a doctor, nursing home,
hospital or similar institution of hypodermic needles, insulin, alcohol swabs, blood sugar
testing strips, monolet lancets, dextrometer supplies, blood glucose meters, and other similar
supplies for use in treating diabetics exempt from the sales and use tax?
Sales by a pharmaceutical or medical equipment supplier to a doctor, nursing home, hospital
or similar institution of hypodermic needles, insulin, alcohol swabs, blood sugar testing
strips, monolet lancets, dextrometer supplies, blood glucose meters, and other similar
supplies for use in treating diabetics are not sales “to diabetics” and do not qualify for the
exemption found in Code Section 12-36-2120(28)(b). - Are sales of ostomy bags, catheters, and drainage units to a doctor, nursing home, hospital or
similar institution for use in treating their patients exempt from the sales and use tax?
No, since the sale to the doctor or hospital does not require a prescription and is not actually
being sold by prescription, sales of ostomy bags, catheters, and drainage units to the doctor or
hospital for use in treating their patients do not qualify for the exemption, and are therefore
subject to the tax.
C. Sales to Individuals (Not A Doctor, Nursing Home, Hospital Or Similar Institution For Use
In Treating Their Patients): - Are sales of prescription medicines by a pharmacy to an individual who provides the
pharmacy a prescription from a doctor exempt from the sales and use tax?
Yes, since the medicine is of a type that requires a prescription, the sale requires a
prescription, and is actually be sold by prescription, the sale is exempt from the sales and use
tax. - Are sales of non-prescription medicines by a pharmacy to an individual who provides the
pharmacy a prescription from a doctor exempt from the sales and use tax?
No, since the medicine is of a type that does not require a prescription, the sale is not exempt
from the sales and use tax. - Are sales of oxygen sold in cylinders and oxygen concentrators by a pharmacy or a medical
supply dealer to an individual exempt from the sales and use tax?
Yes, when such sales require a prescription under the law and are actually sold by
prescription to an individual, oxygen sold in cylinders and oxygen concentrators have been
held exempt as medicines sold by prescription.
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Note: Sales of masks, tubing, regulators, and tank holders do no come within the exemption
and are subject to the sales and use tax.
- Are sales of enteral nutrition formulas by a pharmacy or a medical supply dealer to an
individual exempt from the sales and use tax?
Sales of enteral nutrition formulas to individuals are exempt from the sales and use tax under
Code Section 12-36-2120(28)(a) as medicines sold by prescription only if the enteral
nutrition formula is of a type that, under the law, requires a prescription in order to be sold to
the patient. Sales of enteral nutrition formulas that do not require a prescription in order to
be sold to the patient are subject to the sales and use tax - Are sales of total parenteral nutrition (“TPN”) solutions by a pharmacy or a medical supply
dealer to an individual who provides the pharmacy a prescription from a doctor exempt from
the sales and use tax?
Sales of total parenteral nutrition (“TPN”) solutions to individuals are exempt from the sales
and use tax under Code Section 12-36-2120(28)(a) as medicines sold by prescription since
federal law requires that total parenteral nutrition (“TPN”) solutions be sold by prescription
when sold to the patient. - Are sales by medical equipment and supply dealers to an individual of the following items
exempt during the “sales tax holiday?”
orthopaedic shoes
mastectomy and nursing bras
latex and vinyl gloves worn by a caregiver in the home (usually a family member)
hospital-type gowns worn in the home by a patient
diabetic shoes worn by a person with diabetes
compression hosiery
incontinent underwear
dresses worn by nurses or in-home caregivers paid for by the individual
Sales by medical equipment and supply dealers of the above items during the “sales tax
holiday” are taxed or exempt as follows:
orthopaedic shoes
exempt during the “sales tax holiday”
mastectomy and nursing bras
exempt during the “sales tax holiday”
latex and vinyl gloves worn by a caregiver in the home (usually a family member)
exempt during the “sales tax holiday” when used by a family member
taxable during the “sales tax holiday” when used by a paid caregiver since
it
would constitute safety clothing for use in a trade or business.
hospital-type gowns worn in the home by a patient
exempt during the “sales tax holiday”
diabetic shoes worn by a person with diabetes
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exempt during the “sales tax holiday”
compression hosiery
exempt during the “sales tax holiday”
incontinent underwear
exempt during the “sales tax holiday”
dresses worn by nurses or in-home caregivers paid for by the individual
exempt during the “sales tax holiday” provided the nurse or caregiver is not required
by her employer to wear a specific type of uniform. If the nurse or caregiver is merely
required to wear a nurse-style dress, but not a specific style or make, then the
exemption is applicable. If the nurse is required to wear a specific style or make, then
the dress constitutes an employee uniform and the exemption is not applicable.
Note: Rentals of the above items do not qualify for the “sales tax holiday” exemption
since Code Section 12-36-2120(57)(b) specifically states that the exemption does not
apply to the “rental of clothing or footwear.”
- Are sales of wheelchairs to an individual exempt from the sales and use tax?
No. - Are sales of hearing aids to an individual exempt from the sales and use tax?
Sales of hearing aids to an individual are exempt from the sales and use tax under Code
Section 12-36-2120(38), provided such hearing aids meet the definition found in Code
Section 40-25-20(5).
Note: Sales of hearing aid batteries and cords are not exempt. - Are sales of hypodermic needles, insulin, alcohol swabs, blood sugar testing strips, monolet
lancets, dextrometer supplies, blood glucose meters, and other similar diabetic supplies to an
individual exempt from the sales and use tax?
Sales of hypodermic needles, insulin, alcohol swabs, blood sugar testing strips, monolet
lancets, dextrometer supplies, blood glucose meters, and other similar diabetic supplies to an
individual are exempt from the sales and use tax under Code Section 12-36-2120(28)(b),
provided the individual purchasing such items is a diabetic and the sale is pursuant to the
written authorization and direction of a physician. See SC Regulation 117-332.
Note: The exemption does not apply to sales of clothing or footwear specifically designed for
diabetics (e.g., diabetic shoes). Sales (not including rentals) of clothing and footwear
specifically designed for diabetics are only exempt from the tax during the “sales tax
holiday,” provided such items are not used in a trade or business. See Question #6 above. - Are sales of ostomy bags, catheters, and drainage units to an individual exempt from the
sales and use tax?
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Sales of ostomy bags, catheters, and drainage units to an individual are only exempt from the
sales and use tax if such items are used to replace a missing part of the body (e.g., a missing
part of the intestines) and if sold by prescription. If the ostomy bags, catheters, and drainage
units are used to replace a missing function of the body (i.e., the part of the body remains, but
it is not functioning or is not functioning properly), then sales of such items to an individual
are not exempt and subject to the tax See Commission Decision #90-39.
SOUTH CAROLINA DEPARTMENT OF REVENUE
S/Burnet R. Maybank
Burnet R. Maybank, Director
, 2003
July 2
Columbia, South Carolina
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