Is a ureteral stent exempt from Texas sales tax as a prosthetic device, even though it's only implanted temporarily?

Subject

Urological Catheters/Incontinence Devices/Ureteral Stents — Prosthetic Devices Even If Implanted On Temporary Basis

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9403L1288E14

Plain-English Summary

A taxpayer asked the Comptroller whether ureteral stents are subject to Texas sales and use tax. A ureteral stent is placed next to the ureter (the duct carrying urine from the kidneys to the bladder) during surgery, because the ureter often swells from surgical trauma. While the ureter is swollen and not functioning normally, the stent effectively becomes the "walls" of the ureter, taking over the job of the swollen tissue until it heals — and the stent is typically only in place on a temporary basis.

The Comptroller ruled that the stents qualify as exempt prosthetic devices. Rule 3.284 defines a prosthetic device as any item that is artificial and either (1) replaces a missing part of the body, (2) performs the function of a vital organ or appendage, or (3) is permanently implanted in the body. Citing Comptroller Hearing #22,410, the ruling noted that neither the statute nor the rule requires that an impairment be permanent, or that a prosthetic device perform all of the functions of the affected organ, in order to qualify for the exemption. Because the stent takes over the ureter's function while it is impaired, it meets the definition even though it isn't permanently implanted.

What This Means For You

If you sell or provide ureteral stents: Based on this ruling, ureteral stents can be sold or purchased tax-exempt as prosthetic devices, even where the stent will only remain in the body temporarily while the ureter heals.

If you sell other temporarily-implanted medical devices: This ruling is a useful data point that Texas does not require permanence for a device to qualify as a "prosthetic device" — it's enough that the device performs the function of a vital organ or appendage while that organ is impaired. However, this letter is based on the specific facts presented about ureteral stents; other devices with different facts could come out differently, and only the original recipient of this letter may rely on it for detrimental-reliance protection.

If you're unsure whether a device qualifies: Because eligibility turns on whether an item is "artificial" and either replaces a missing body part, performs a vital organ's function, or is permanently implanted, it's worth confirming with a tax professional or requesting your own letter ruling for devices not squarely covered by this fact pattern.

Q&A

Q: Does a prosthetic device have to be permanently implanted to be tax-exempt in Texas?
A: No. This ruling confirms that neither the statute nor Rule 3.284 requires permanence — a device implanted only temporarily, like a ureteral stent, can still qualify as an exempt prosthetic device.

Q: Does a device have to replace all the functions of the organ it's helping to qualify as a prosthetic device?
A: No. The ruling cites Comptroller Hearing #22,410 for the point that a prosthetic device need not perform all of the functions of the affected organ or appendage in order to qualify for the exemption.

Q: Why does a ureteral stent qualify as a prosthetic device under Rule 3.284?
A: Because once in place, the stent becomes the functional "walls" of the ureter, taking over for the swollen, non-functioning ureter tissue caused by surgical trauma — meeting Rule 3.284's definition of an artificial item that performs the function of a vital organ or appendage.

Original ruling text

March 2, 1994

Dear *****:

This is in response to your letter dated February 24, 1994, requesting an
opinion regarding sales tax as it applies to ureteral stents as described
below.

FACTS: Ureteral stents are generally implanted on a temporary basis.

The ureter is a duct which carries urine from the kidneys to the bladder.
Ureteral stents are placed adjacent to the ureter during surgery to assist with
the movement of the urine from the kidneys to the bladder. The ureter often
swells due to trauma to the organs during surgery. The swelling impedes the
normal function of the ureter during the surgical procedure and afterwards
until the swelling goes down. Once in place, a ureteral stent becomes the
"walls" of the ureter and therefore replaces the swollen walls of the
non-functioning ureter.

Rule 3.284 defines a prosthetic device as any item which is artificial
and replaces a missing part of the body, which performs the function of a vital
organ or appendage of the human body, or which is permanently implanted in the
body.

In Comptroller Hearing #22,410, the Administrative Law Judge (ALJ)
concluded that there are no requirements in either the statute or rule for an
impairment be permanent or a prosthetic device to perform all of the functions
of an affected organ.

QUESTION: Are the ureteral stents described above subject to sales and
use tax? If so, why?

RESPONSE: We agree that the ureteral stents as described and used above
qualify as prosthetic devices and are exempt from sales tax.

This opinion is based on the facts presented. Different facts, though
similar, might lead to different answers. If you have any questions or need
more information, please write or call me toll free at 1-800-531-5441,
extension 50330, or 512-475-0330.

Sincerely,

Bettie Peterson
Tax Administration Division

NOTE: Previous Accession Number 9403097L