Sales Tax State Activity Update - March 2004

Tissue Expanders Exempt as Prosthetic Devices in California

The California State Board of Equalization has amended Regulation 1591(b)(5) to pro-vide that breast tissue expanders and tissue expanders are now considered prosthetic devices that qualify as “medicines”. Prior to the amendment, these implantable items did not qualify as “medicines” as noted in Subdivision (b)(2) of the previous version of Regulation 1591.

Subdivision (c) of the same Regulation explains that tax does not apply to the sale or use of “medicines” when sold or furnished under one of the following conditions:

(1) pre-scribed for the treatment of a human being by a person authorized to prescribe the medicines, and dispensed on prescription filled by a pharmacist in accordance with law, or

(2) furnished by a licensed physician, dentist or podiatrist to his or her own patient for treatment of the patient, or

(3) furnished by a health facility for treatment of any person pursuant to the order of a licensed physician, dentist or podiatrist, or

(4) sold to a li-censed physician, dentist, podiatrist or health facility for the treatment of a human being, or

(5) sold to this state or any political subdivision or municipal corporation thereof, for use in the treatment of a human being; or furnished for the treatment of a human being by a medical facility or clinic maintained by this state or any political subdivision or municipal corporation thereof.

(Regulation 1591, California State Board of Equalization, Amendment effective 2/25/04) 03/04

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