Were empty IV containers, enema bags, and syringes exempt when hospitals filled them with exempt medicines?

Plain-English summary

A redacted director's absent January 21, 1982 letter asked whether hospitals' empty intravenous-solution containers and enema bags were exempt because they were used with exempt medicines, and whether the same analysis applied to syringes with exempt prescription contents. The response cites no numbered authority and refers to an unidentified prior Board determination that is not supplied.

Tax applied to hospitals' purchases of the empty containers, bags, and syringes.

Although a pharmacist or nurse filled them with exempt medicine and the patient was customarily charged for the IV solution or enema preparation, the containers themselves were not sold to the patient. They formed part of the hospital's medicine-handling system, stayed in the hospital's possession, and were discarded there.

The hospital was therefore the consumer of the containers and syringes.

The PDF supplies no product, purchase, pharmacy, nursing, patient-billing, possession, disposal, audit, appeal, or later-outcome record.

Common questions

Did exempt medicine make its empty container exempt?

No. The letter separately classified the container based on who consumed it.

Did charging the patient for the preparation transfer the container?

No on the described facts. The container never left hospital possession before disposal.

Did the syringe receive different treatment?

No. The same consumer analysis applied.

Citations and references

• The March 2, 1982 response cites no statute, regulation, ruling, case, medicine definition, or other numbered authority
• January 21, 1982 redacted director's letter requesting an opinion on hospital purchases of empty intravenous-solution containers and enema bags and asking about syringes sold with exempt prescription contents — request, requester role beyond director, product specifications, purchase and sale invoices, pharmacy and nursing procedures, medicine records, patient bills, possession records, and disposal records not reproduced in the official PDF
• Prior unidentified Board determination that the containers formed part of a hospital's medicine-handling system and stayed in hospital possession until disposal — date, identifier, author, facts, authority, copy, distribution, implementation, and later history not supplied
• March 2, 1982 Staff Counsel Mary C. Armstrong response treating hospitals as consumers of the empty containers, bags and syringes even when pharmacists or nurses filled them with exempt medicines and patients were customarily charged for the preparation — no requester reply, hospital or supplier transaction, return, audit, assessment, refund claim, appeal, or later outcome supplied; blind copy sent to a redacted Subdistrict
• Official Annotation 300.0035's empty-container, pharmacist-or-nurse compounding, exempt-medicine, customary patient charge, medicine-handling-system, hospital possession and disposal, syringe, and March 2, 1982 rules — annotation omits the January 21 request provenance, unidentified prior determination, absence of numbered authority, absent product and transaction records, copied subdistrict, later outcome, and reliance status and supplies no additional proceeding record

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/300-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/300-0035.pdf

Original ruling text

300.0035

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-3237

March 2, 1982

Mr. R--- J. F--Director
F--- and A--XXXX --- Drive
---, CA XXXXX

Dear Mr. F---:
This is in response to your letter of January 21, 1982. You have requested our opinion concerning the correct application of tax to empty intravenous solution containers and empty enema bags. As we understand it, hospitals purchase both of these products without their contents. In both cases a pharmacist or nurse prepares or compounds the contents which are exempt medicines. The patient is customarily charged for the intravenous solution or enema preparation. You would like to know whether a hospital’s purchase of containers for these items is exempt from tax because it is sold with an exempt medicine? If so, does the same analysis apply to the syringe which is sold with its exempt prescription contents? We are of the opinion that tax applies to the hospitals’ purchases of empty intravenous solution containers and enema bags because there is no sale of the containers with the medicine to the patient. We have previously determined that such containers are part of a hospital’s medicine handling system and never leave the hospital’s possession until they are thrown out by the hospital. As such, the hospital is the consumer of such containers and tax will apply to their sale to the hospital. The same analysis would apply to a syringe.

Mr. R--- J. F---

-2-

March 2, 1982
300.0035

If you have further questions concerning this matter, please write this office again. Very truly yours,

Mary C. Armstrong
Staff Counsel

MCA:ba

bc:

--- --- Subdistrict