Which diabetic equipment, medicine, food, accessories, and shipping charges were exempt or taxable under Texas's 1988 rules?

Plain-English summary

The Comptroller classified a large diabetic-products catalog by redacted product-line code:

• Lines BL, BM, BS, CC, CS, IA, INIO, IS UM, and VI were exempt therapeutic devices when sold to an individual under a doctor's prescription, but taxable when sold to a health-care provider.
• Line BA batteries were exempt when bought for use in exempt therapeutic or prosthetic devices.
• Lines BO, FP, ID, MJ, and TS were taxable.
• Line FOR items were exempt food products except for the listed candy, chocolate, cough-drop, mint, raisin, and truffle products.
• Line IR glucose items were exempt as drugs or medicine when prescribed or dispensed by a physician. Monogel and the Sleep Sentry Alarm were exempt when prescribed by a doctor for an individual.
• Lines LL, NO, and SQ—insulin—were exempt as drugs or medicines.
• Line SY hypodermic needles and syringes were exempt when sold for a medical purpose, such as to a diabetic with an insulin prescription.
• Line MA items were exempt therapeutic devices when sold to an individual under a doctor's prescription, except for the named records, log books, doors, data logger, printer, carrying case, data manager, and logbook.
• Within line OF, Scott-Tussin expectorant and cough syrup were taxable unless prescribed; digital thermometers were taxable; blood-pressure kits were taxable unless prescribed by a physician for an individual; “Folding care” was exempt; and Sulpan boots were exempt if prescribed.
• Line SH shipping charges were taxable if any taxable item was shipped.

What this means for you

The historical answer depended on the exact item, whether it was prescribed, who bought it, and how it was used. A product's association with diabetes did not create a blanket exemption.

Common questions

Were prescribed therapeutic devices exempt? Yes, for the listed product lines when sold to an individual under a doctor's prescription; the same items were taxable when sold to a health-care provider.

Was insulin exempt? Yes, for product lines LL, NO, and SQ.

Were needles and syringes exempt? Yes when sold for a medical purpose under the described condition.

Were shipping charges taxable? Yes if the shipment included any taxable items.

Citations and references

• 34 Tex. Admin. Code Rule 3.284 — historical medical-products rule enclosed with the letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8802L0891E03

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

February 4, 1988

Dear *:

On behalf of Mr. Bullock, I hope you'll accept my apology for the delay
in answering your question involving changes in the sales tax law. This
isn't the way we normally do business.

Our people were, and still are, swamped by a deluge of inquires as they
attempted to interpret provisions of the new law and draft rules which
would not adversely impact businesses. In many instances, an answer to a
question just wasn't available when the question arrived.

The items in product lines BL, BM, BS, CC, CS, IA, INIO, IS UM, AND VI
are exempt as therapeutic devices when sold to an individual under a
doctors prescription. These items are taxable when sold to a health care
provider.

The batteries in product line BA will be exempt if they are purchased for
use in exempt therapeutic or prosthetic devices.

The items in product lines BO, FP, ID, MJ, and TS are taxable.

The items in product line FOR are exempt as food products except for the
following:

Estee Gummy Bears
Estee-ettes
Estee Peanut Butter Cups
Estee Gum Drops
Estee Chocolate Bar
Estee Cough Drops
Louis Sherry Gum Bears
Louis Sherry Hard Candy
Louis Sherry Lollipops
Sorbee Hard Candy
Louis Sherry Chocolate Bar
Go Lightly Sugar-Free Candy
Estee Mints
Estee Chocolate Raisins
F.W. Hard Candy
Wilber Chocolate Bar
Delty Chocolates
Delty Turtleloves
Frankonia Truffles (individually and gift pack)

The glucose items in product line IR are exempt as drugs or medicine if
prescribed or dispensed by a physician. The monogel and Sleep Sentry
Alarm are exempt if prescribed by a doctor for an individual.

Product lines LL, NO and SQ items (insulin) are exempt as drugs or
medicines.

Product line SY (hypodermic needles and syringes) are exempt when sold
for medical purpose (e.g. sold to diabetics having a prescription form
insulin).

The items in product line MA are exempt as therapeutic if sold to an
individual under a doctor's prescription except for the following:

Daily records
Diascan quarterly log book
Diascan doors
B D Diabetic Diary
Larken Data Logger
Larken Printer
All Purpose Carrying Case
Ames Diary
Lifescan Data Manager
Lifescan Logbook

The taxability of the items in product line OF is as follows:

Scott-Tussin Expectorant and Scott-Tussin cough syrup-
taxable unless prescribed

Digital thermometers-taxable
Blood pressure kits-taxable unless prescribed by a
physician for an individual

Folding care is exempt

Sulpan boots-exempt if prescribed by a doctor.

Product line SH (shipping changes) are taxable if any taxable items are
being shipped.

I have enclosed Rule 3.284 which should provide additional information.

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

If you have any questions or need more information, please call our
toll-free number 1-800-531-5441. The regular number is 512/463-4600.

Sincerely,
Eddie C. Washington
Tax Policy Division