Were excimer-laser coronary angioplasty catheters exempt medicines like the two catheter types then named in Regulation 1591?

Plain-English summary

A seller argued that excimer-laser coronary angioplasty catheters should receive the medicine exemption available to certain catheter products.

California said the then-current regulation specifically named only intra-aortic balloon-pump catheters and coronary angioplasty balloon catheters. Functional similarity did not add another product to that limited list.

Laser angioplasty catheters were instruments excluded from medicine, so their sales were taxable.

Common questions

Did functional similarity extend the named exemption?

No.

Were laser angioplasty catheters taxable?

Yes.

Citations and references

• Historical 18 Cal. Code Regs. § 1591(n) — two catheter types named by the regulation effective August 23, 1996
• Historical 18 Cal. Code Regs. § 1591(c)(2) — instruments excluded from medicine

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/425-0232-001.pdf

Original ruling text

425.0232.001

STATE OF CALIFORNIA

JOHAN KLEHS
First District, Hayward

STATE BOARD OF EQUALIZATION
450 N STREET, SACRAMENTO, CALIFORNIA
(PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-0082)
TELEPHONE (916) 324-3828
FAX (916) 323-3387

DEAN F. ANDAL
Second District, Stockton
ERNEST J. DRONENBURG, JR.
Third District, San Diego
KATHLEEN CONNELL
Controller, Sacramento
_______

September 24, 1997

JOHN CHIANG
Acting Member
Fourth District, Los Angeles
_______

Ms. K--- R. A--Senior Accountant
S--XXX --- ----- ---, CO XXXXX-XXXX

E. L. SORENSEN, JR.
Executive Director

RE:

SC -- XX-XXXXXX
Excimer Laser Coronary Angioplasty Catheters

Dear Ms. A---:
I am responding to your letter dated July 31, 1997 to the Legal Department requesting advice as to the applicability of use tax to S---’ sales of excimer laser coronary angioplasty catheters to purchasers for use in California. You assert these products “relate to percutaneous transluminal laser coronary angioplasty/atherectomy purposes” (emphasis in original) and cite Sales and Use Tax Annotation 425.0231 as support for your position that such items should be considered “medicines” within the meaning of Regulation 1591, the sales of which are exempt from tax. The Board recently added new subdivision (n) to Regulation 1591 as follows: “Sales of intra-aortic balloon pump catheters and coronary angioplasty balloon catheters are not subject to tax. Sales of related supplies are subject to tax. The term “related supplies” includes, but is not limited to, coronary guiding catheters, coronary guide wires, guide wire introducers, sheath introducer systems, torquing devices, hemostatic valves, inflation devices, and syringes.” (Effective August 23, 1996.) The Board thus limited the compass of this subdivision to those two items only. No other items qualify, though possibly similar in function. Accordingly, laser angioplasty catheters are not “medicines” as defined in Regulation 1591(b)(5) but rather are “instruments” excluded from the definition of “medicines” under Regulation 1591(c)(2). Their sales are, for that reason, subject to tax.

Ms. K--- R. A---

-2-

September 24, 1997
425.0232.001

For your information, I have enclosed copies of Regulation 1591 and of Tax Tip Pamphlet Number 45, “Hospitals.” I hope the above discussion has answers your question. If you need anything further, please do not hesitate to write again. Sincerely,

John L. Waid
Senior Tax Counsel
JLW:sr

cc:

-- District Administrator
-- District Administrator