Sales Tax State Activity Update - December 2004

Vermont Announces Taxability of Diabetic Supplies

The Vermont Department of Taxes has issued a Formal Ruling to discuss the taxability of alcohol swabs, lancets, and glucose tablets, which are medical supplies commonly used by diabetics.

32 V.S.A. § 9741(2) provides several medical related exemptions including supplies used in treatment intended to alleviate human suffering or to correct, in whole or in part, human physical disabilities. Regulation § 1.9741(2)-1 further explains that medical supplies are exempt if they are commonly and primarily used in treatment, including self-treatment, and are designed primarily to cure, correct, or reduce the severity of human ailments, injuries or disabilities. Items that are primarily hygienic or preventative in nature are not exempt.

• Alcohol swabs contain isopropyl alcohol, an antiseptic used primarily to prevent infection. They are typically used to prepare the skin prior to administering an injection or prior to the drawing of blood. The Vermont Department of Taxes has concluded that these swabs are not primarily curative or corrective in nature, but are preventative, and are therefore not exempt.
• Lancets are used to penetrate the skin on the finger so that a small sample of blood can be obtained. Diabetics will pierce their skin so that blood glucose levels can be tested. The Vermont Department of Taxes has concluded that the lancets are not designed primarily to cure, correct, or reduce the severity of a human ailment, injury or disability. Instead, they are used as part of a preventative regimen, and are therefore not exempt.
• Glucose tablets are frequently used by diabetics to increase low blood sugar levels. The Vermont Department of Taxes has ruled that the tablets are used in the treatment of a human physical ailment and are exempt from tax.

The full text may be accessed at: http://www.state.vt.us/tax/pdf.word.excel/legal/rulings/04-03.pdf Vermont Department of Taxes, Ruling 2004-03, 5/12/04

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