Did mobility equipment remain exempt when a hospital ordered it for a specific patient and the hospital or Medicare paid?

Plain-English summary

California treated wheelchairs, crutches, canes, quad canes, and walkers ordered by a hospital for a specifically identified patient as purchased by that individual for personal use at a physician's direction. A physician wrote the order, a duty nurse placed it with the vendor, and the vendor billed the hospital plan.

The exemption was not lost merely because the hospital plan or Medicare paid for the equipment instead of the patient paying directly.

Common questions

Did the hospital's role as purchaser automatically make the equipment taxable?

No, because the equipment was ordered for a specific patient's personal physician-directed use.

Did Medicare or hospital-plan payment defeat the exemption?

No.

Which items did the opinion cover?

Wheelchairs, crutches, canes, quad canes, and walkers.

Citations and references

• California Revenue and Taxation Code section 6369.2 — personal-use mobility-device exemption applied in the letter
• California Sales and Use Tax Regulation 1591.2(c) — provision identified in the source's 2002 note

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/425-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/425-0130.pdf

Original ruling text

425.0130

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
November 26, 1979
Dear REDACTED TEXT:
This is in response to your telephone inquiry of November 20, 1979. Your inquiry was in response to our letter of October 16, 1979 concerning the correct application of tax to REDACTED TEXT’s purchase of certain medical devices, specifically items which are exempt from tax pursuant to Revenue and Taxation Code Section 6369.2. Section 6369.2 provides that wheelchairs, crutches, canes, quad canes and walkers are exempt from tax when they are sold to an individual for the personal use of that individual as directed by a physician. At REDACTED TEXT when a physician determines that a patient needs one of the above listed devices, he will write an order for the equipment. A duty nurse will then order the equipment from a vendor. The vendor bills you for the property and payment is made either by REDACTED TEXT or by Medicare. You wish to know if your purchases in this manner entitle REDACTED TEXT to the exemption provided for in Revenue and Taxation Code Section 6369.2. We are of the opinion that wheelchairs, crutches, canes, quad canes and walkers ordered in the manner you describe can be considered to be purchased by an individual for his own use at the direction of a physician, and therefore exempt from tax under Section 6369.2.* The fact that payment for the equipment is made by either REDACTED TEXT or Medicare does not cause the exemption to be lost. office.

If you have further questions concerning this matter, please write or call this Very truly yours, Mary C. Armstrong Staff Counsel

*"See now also Regulation 1591.2(c)" Note added by SPJ 3/15/02 Retyped 8/12/03 by Debbie Self