Sales Tax State Activity Update - January 2004

Taxable Status of Certain Medical Products Reviewed in Florida

The Florida Department of Revenue has issued a Technical Assistance Advisement (TAA) to discuss the taxability of certain respiratory care products sold in Florida. The items in question include: humidifiers (to re-humidify dry oxygen prior to delivery to patient): single patient oxygen delivery products such as cannu-las, masks and tents; connectors, tubings and adapters used to complete the oxygen delivery system be-tween the humidification device and patient; pressure reducing and measured flow devices for oxygen de-livery; large volume nebulizers (aerosol generating devices); small volume nebulizers (deliver prescribed medications); aerosol patient applications (masks and collars, for mouth or tracheostomy sites); heaters, to warm delivered humidified gas; volume measuring devices and respiratory muscle exercise devices, respi-rometers, spirometers; mucous expectoration devices (percussors, flutter devices); ventilatory support de-vices, including resuscitators, and adjunctive equipment and supplies for the ventilator.

Relevant to the above items, Sec. 212.08(2)(a), F.S. provides an exemption for any medical products and supplies or medicine dispensed according to an individual prescription or prescriptions written by a prescriber authorized by law to prescribe medicinal drugs, as well as common household remedies recommended and generally sold for internal or external use in the cure, mitigation, treatment, or prevention of illness or disease in human beings, but not including cosmetics or toilet articles.

Further, the law exempts prosthetic and orthopedic appliances, defined in sub-paragraph (2)(b) of the above Code Section to mean any apparatus, instrument, device, or equipment used to replace or substitute for any missing part of the body, to alleviate the malfunction of any part of the body, or to assist any disabled person in leading a normal life by facilitating such person's mobility.

Note that Rule 12A-1.021(1)(b), F.A.C. specifically lists Fluidic Breathing Assitors and Portable Resuscitators as being exempt prosthetic and orthopedic appli-ances. Also of relevance is sub-paragraph (2)(g) of the above Code Section, which states that medical products and supplies used in the cure, mitigation, alleviation, prevention, or treatment of injury, disease, or incapacity which are temporarily or permanently incorporated into a patient or client by a practitioner of the healing arts licensed are exempt.

Therefore, in general terms, any medical product, supply or medicine sold under an authorized prescription is exempt from tax. Medical devices, machinery, and equipment that are purchased by healthcare practitioners for use in their practice are generally taxable, with the exception of certain medical products and certain orthopedic and prosthetic equipment as noted above, which are specifically exempt from tax regardless of whether a prescription is involved and regardless of whether the product is sold to a patient or to a healthcare practitioner. The TAA states that The Department of Health has advised that ventilator systems and nebulizers perform the same function as a Fluidic Breathing Assistor and therefore would be also be exempt from tax. Any parts or attachments to an exempt product would also be exempt.

If any of the items in question above are necessary components or attachments to an exempt item, such as a ventilator or nebulizer, the components or attachments would be exempt. Multiple use therapy equipment such as the volume measuring devices and respiratory muscle exercise devices, respirometers, spirometers, as well as the mucous expectoration devices would be taxable to the healthcare practi-tioner, unless they are to be resold under physician’s orders to the patient. While gases used for medical or therapeutic purposes are exempt, there is no specific exemption for oxygen tanks owned by healthcare practitioners. Attachments to the tanks such as tubing and masks would be taxable. However, the sale of tanks and attachments to patients under physician’s orders would be exempt.

(Florida Department of Revenue, Technical Assistance Advisement 03A-060, 12/11/03) 01/04

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