Were the RIA-Mat Angiotensin II 125 and Res-O-Mat T3I 125 laboratory kits exempt medicines?

Plain-English summary

California corrected its earlier advice and treated the RIA-Mat Angiotensin II 125 and Res-O-Mat T3I 125 in-vitro diagnostic kits as taxable. The products were used exclusively for laboratory specimen testing, with no component applied internally or externally to the patient's body.

The earlier letter had misunderstood the phrase “externally to the patient's body” as describing application onto the outside of the body. The correction explained that laboratory work occurring outside the patient was not external application to the human body under the medicine definition.

Common questions

Did the kits qualify because the testing occurred “externally” to the patient?

No. That meant outside the body in a laboratory, not application onto the body's exterior.

Had California previously advised that the kits were exempt?

Yes. This letter expressly withdrew that conclusion and apologized for the misinterpretation.

Was any kit component applied to the patient?

No under the corrected facts.

Citations and references

• Historical California Sales and Use Tax Regulation 1591(b)(1) — medicine definition applied in the correction letter

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/425-0163-600.pdf

Original ruling text

STATE OF CALIFORNIA

425.0163.600

STATE BOARD OF EQUALIZATION
916-445-2641
January 17, 1977
REDACTED TEXT
Dear REDACTED TEXT,
It has been called to our attention that, by our letter to you of August 17, 1976, we may have misadvised you as to the proper application of the California sales tax to sales of your products RIA-Mat Angiotensin II 125 Kit and Res-O-Mat T3I 125. We advised you that the two items qualified as “medicines” under paragraph (b) (1) of our Regulation 1591. Although both items in question were expressly described b you in vitro assay diagnostic systems, you also stated in your letter of July 23, 1976, that the items were used “…by the application of the component substances in the test kit externally to the patient’s body….” We misinterpreted this language to mean that the component substances were applied to the body externally. It is our understanding that the two items are used exclusively in laboratory specimen tests and that no part is applied to the human body either internally or externally. “Medicines” is limited to those substances “intended for use by external or internal application to the human body.” Items used in laboratory testing performed “externally to the patient’s body” do not qualify as items externally applied to the human body within the meaning of the regulation. you.

We apologize for any inconveniences our misperception may have occasioned Very truly yours, Gary J. Jugum Tax Counsel

j:alicetilton