Is a coronary atherectomy catheter, used to excise and retrieve plaque from diseased arteries, taxable in Texas?

Subject

Catheters — Used In Cardiac Catheterization Or To Excise And Retrieve Plaque (Atherectomy) From Diseased Arteries — Medical Diagnostic Tool

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9403L1292E05

Plain-English Summary

A company that manufactures and sells a coronary atherectomy system wrote to the Comptroller asking about the Texas sales tax treatment of its device. The atherectomy system uses catheters to excise and retrieve plaque from diseased coronary arteries; the catheters are single-use and disposable.

The Comptroller ruled that the coronary atherectomy system is taxable. The response pointed the taxpayer to Rule 3.284 (Drugs, Medicines, Medical Equipment and Devices), enclosed for reference, but did not identify any exemption that applied to this device. The letter also notes that the opinion is based on the specific facts presented, and that different facts — even if similar — could lead to a different answer.

What This Means For You

If you manufacture or sell medical devices used in cardiac procedures: Do not assume a device is tax-exempt simply because it is used in a medical or surgical context. This particular disposable catheter system, used to excise and retrieve arterial plaque, was found taxable rather than exempt.

If you are unsure whether your medical device qualifies for an exemption: Review Rule 3.284 (Drugs, Medicines, Medical Equipment and Devices) closely, since that is the rule the Comptroller applied here, and consider requesting your own letter ruling — this opinion applies only to the facts as presented to the Comptroller in this specific request.

Q&A

Q: Is a coronary atherectomy catheter system taxable in Texas?
A: Yes. The Comptroller ruled that this disposable, single-use catheter device, used to excise and retrieve plaque from diseased coronary arteries, is taxable.

Q: What rule did the Comptroller apply to reach this conclusion?
A: The Comptroller referenced Rule 3.284, Drugs, Medicines, Medical Equipment and Devices, enclosing it for the taxpayer's reference, but did not find the device exempt under it.

Q: Can this taxpayer rely on this ruling if the facts of their business change?
A: No. The letter explicitly states the opinion is based on the facts presented, and that different facts, though similar, might lead to a different answer.

Citations

• 34 Tex. Admin. Code § 3.284 (Drugs, Medicines, Medical Equipment and Devices) — referenced and enclosed by the Comptroller as the governing rule

Original ruling text

March 17, 1994

Dear *:

Thank you for your letter dated March 9, 1994, regarding
sales tax as it applies to a medical device manufactured and
sold by your company.

The device is a coronary atherectomy system and it is used
to excise and retrieve plaque from diseased coronary
arteries. The catheters are intended for one time use and
are disposable.

The coronary atherectomy system is taxable. I am enclosing
Rule 3.284, Drugs, Medicines, Medical Equipment and Devices
for your reference.

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
5-0330, or 512-475-0330.

Sincerely,

Bettie Peterson
Tax Administration Division

NOTE: Previous Accession Number 9403174L