Were the listed blood-testing instruments and disposable cartridges taxable in Texas, and when could the seller accept an exemption certificate?

Plain-English summary

The Comptroller held the Hepcon/System A-10 and B-10 instruments, HemoTec ACT System, and disposable cartridges taxable.

The seller could accept an exemption certificate instead of tax only when the certificate was taken at the time of sale, used the form prescribed by Rule 3.285, and came from a hospital claiming one of the organizational exemptions listed in Rule 3.322(b) or (c).

Sales to private for-profit hospitals, doctors, clinics, and other health-care organizations remained taxable.

What this means for you

The devices themselves were not exempt. Any tax-free sale depended on the purchasing hospital's qualifying organizational status and timely, proper documentation.

Common questions

Were the named devices taxable? Yes.

Could a hospital provide an exemption certificate? Only if it claimed a qualifying exemption under Rule 3.322(b) or (c) and supplied the prescribed certificate at the time of sale.

Were sales to private for-profit hospitals exempt? No.

What certificate rule applied? Rule 3.285.

Citations and references

• Comptroller Rule 3.285 — prescribed exemption-certificate form.
• Comptroller Rule 3.322(b), (c) — hospital organizational exemptions referenced by the letter.
• Comptroller Rule 3.284 — enclosed by the Comptroller for reference on taxable sales.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8707L0824C01

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TX 78774

BOB BULLOCK
Comptroller July 16, 1987

Dear *:

Thank you for your recent letter regarding the taxability of
Hepcon/System A-10 Instruments, Hepcon/System B-10 Instruments, HemoTec ACT
System, Disposable Cartridges.

These devices are taxable.

As we discussed, you may accept an exemption certificate in lieu of tax
under
the following circumstances:

a. the certificate is taken at the time of sale,
b. the certificate is in the form prescribed in Rule 3.285 (enclosed),
and
c. the hospital providing the certificate claims exemption as one of the
type organizations listed in Rule 3.322(b) or (c) (enclosed).

You must charge tax on all sales to private for-profit hospitals (i.e.,
doctors, clinics, etc.) or other health care organizations. I am
enclosing
Rule 3.284 for your reference.

This opinion is based upon the facts you presented. If there are
additional
or different facts, this opinion may change.

Please feel free to contact me if you have additional questions. You may
write me, call toll free 1-800-252-5555 from anywhere in Texas or phone
512/463-4600.

Sincerely,
Al Van Allen
Tax Policy Division