Were urine drain bags used with catheters exempt medical products in California?

Plain-English summary

California distinguished urine drain bags by how the patient used them. A leg bag worn fully on the body by an ambulatory patient qualified as an exempt prosthetic drainage device. A bedside bag used by a patient confined to bed was taxable because it was not fully worn by the user.

The same product-by-product letter said urinary catheters were generally taxable unless they met a permanent-implant, artificial-opening drainage, or body-worn prosthetic exception. Catheter insertion trays, closed drainage kits, and irrigation trays containing both taxable and exempt items were taxable on the full price unless the seller allocated the sales price between the two groups.

Common questions

Did attaching a bedside bag to an exempt catheter make the bag exempt?

No. The letter separately classified bedside bags as taxable because they were not fully worn on the body.

Were all urinary catheters exempt?

No. The opinion listed only the permanent-implant, qualifying drainage, and prosthetic-device exceptions.

How were mixed urinary-care kits treated?

The entire price was taxable unless the seller allocated the price between taxable and exempt contents.

Citations and references

• California Revenue and Taxation Code section 6369(c)(4) — prosthetic-device treatment applied to fully body-worn leg bags
• California Revenue and Taxation Code sections 6369(c)(2) and (g) — permanent-implant and artificial-opening catheter exceptions
• California Revenue and Taxation Code section 6369(b)(2) — device exclusion applied to other catheter and feeding products

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/425-0168-145.pdf

Original ruling text

425.0168.14

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
(916) 324-5589

June 11, 1990

Mr. A--- Y. C. Y----- and --XXXX --- --- -----, Washington XXXXX-XXXX
Dear Mr. Y---:
This is in response to your letter of May 7, 1990 regarding the correct application of tax to
various medical products listed in your letter.
You have requested that we circle the appropriate response (taxable or exempt) next to
each item with a reference to the statute, regulation or rule supporting our conclusion. We are
unable to provide you with such a summary response because several of the items listed are both
taxable and exempt depending on the circumstances of their use.
Your list of items and our comments as to the correct application of tax in each instance
follow. (All references are to the Revenue and Taxation Code unless otherwise noted.)
Permanent Urinary Incontinence Products
Catheter – A flexible tubular device
used to drain urine from the bladder
through the urinary tract and to
inject medications into the urinary
bladder. These catheters include
in-dwelling catheters and male
external catheters (condom
catheters).

Taxable Status
All catheters are taxable,
with three exceptions: (1)
catheters which are
permanently implanted are
exempted under section
6369(c)(2); (2) catheters
which are used for drainage
purposes through
artificial openings are
exempted under section
6369(g) dealing with
ostomy materials (this
exemption includes
supplies); and (3)
catheters or other types
of drainage devices used
for drainage through

Mr. A--- Y. C. Y---

-2-

June 11, 1990
425.0168.145

natural openings are
exempted as prosthetic
devices under section
6369(c)(4).
Insert Tray – A sterile tray (or
kit) containing the items needed for
urinary catheterization, such as
sterile gloves, an underpad to
protect the linens and maintain
sterility, paper drape to cover
the body, rayon balls and cleansing
or disinfecting solution, forceps,
lubricating gel and a syringe.

Tax applies to the entire
price of medical kits and
trays unless the sales
price is allocated between
taxable and non-taxable
items. (Business Taxes
Law Guide (BTLG) Annot.
425.0840.)

Drain Bag – Used with a catheter
to collect the urine as it drains.
There are two types. Bedside bags
are used for patients confined to
bed. Leg bags are used for
ambulatory patients.

Bedside bags – taxable.
Leg bags – Exempt (if
fully worn on the body).
( § 6369(c)(4).)

Closed Drainage System Kits or
Bladder Care Kits – Contain all
the items in an insert tray plus
catheter and pre-connected drain
bag.

Tax applies to the entire
price of medical kits and
trays unless the sales
price is allocated between
taxable and non-taxable
items. (BTLG Annot.
425.0840.)

Irrigation Products – Products used
to cleanse the bladder and also to
remove clots and sediment and
thereby lengthen the life of the
catheter. Bladder irrigation is a
sterile procedure.
Irrigation Tray – Contains a
Syringe and all of the other
Items necessary for irrigation underpad, solution container,
alcohol swab, etc.

Tax applies to the entire
price of medical kits and
trays unless the sales
price is allocated between
taxable and non-taxable
items. (BTLG Annot.
425.0840.)

Mr. A--- Y. C. Y---

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June 11, 1990
425.0168.145

Irrigation Solution – Solutions
commonly used for bladder
irrigation are sterile water,
normal saline, urological G
or renacidin.

Exempt (BTLG Annot.
425.0840.)

Surgical Dressings – Products used
assist in the patient’s healing
process after surgery in which a
scalpel was used.

Exempt if the dressing
contains a medicine.
(§ 6369.)

Enteral (Tube-Feeding Products) –
Enteral feeding is the ingestion of
nutrition through a tube inserted
into an opening in the body. Nasogastric feeding is administered
through a tube in the nose. Gastrointestinal feeding is administered
through a catheter inserted in a
surgical opening in the stomach.
Examples of the types of enteral
products are:
Nutrients (tube-feeding formulas
of life sustaining prescription
food products.)

Exempt. (§ 6369(b).)

Naso-Gastro Tubes

Taxable (unless also used
for suction).
(§ 6369(b)(2).)

Catheters for Gastro-Intestinal
Feeding

Taxable (unless also used
for suction).
(§ 6369(b)(2).)

Administration Kits which include
a set of feeding bags and
gavages.

Taxable unless sales price
allocated between taxable
and non-taxable items
BTLG Annot. 425.0840.)

Purchase or Rental for a
sophisticated pump that is used
to ingest doctor-prescribed
quantities and timely doses

Taxable. (§ 6369(b)(2).)

Mr. A--- Y. C. Y---

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June 11, 1990
425.0168.145

of nutrients through a tube and
into the patient’s body.
Ostomy Products – Products used by
Patients who have had ostomy surgery.
These products include such items as
ostomy bags used to collect body waste,
skin protectors and gels to dress the
ostomy site.

Exempt. (§ 6369(g).)

Tracheostomy Products – Products used
by patients who have had tracheostomy
surgery. These products include such
items as tracheostomy care kits, solutions
and other related tracheostomy
products for used for cleansing and
maintenance after the surgery.

Exempt (§ 6369(g)) but
taxable if used prior
to or during surgical
procedure.

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

Mary C. Armstrong
Senior Tax Counsel

MCA:wak
2244C