Were prescribed disposable adult diapers and pant-and-pad systems exempt as medicines in California?

Plain-English summary

California treated the described disposable adult diapers and pant-and-pad systems as taxable. Although the customer had a doctor's prescription, the opinion said a prescription exempts only an item that first qualifies as “medicine” under Regulation 1591.

The incontinence supplies did not qualify as medicine under the regulatory exclusion cited in the source letter. The opinion contrasted them with products such as petroleum jelly, rubbing alcohol, or medical oxygen, which could qualify as medicines and become exempt when purchased under a physician's order.

Common questions

Did the doctor's prescription by itself create an exemption?

No. The product also had to meet the regulation's definition of medicine.

Does the official material consistently identify the same subsection?

No. The annotation summary points to Regulation 1591(c)(2), while the supporting opinion says paragraph (c)(3).

Citations and references

• California Sales and Use Tax Regulation 1591(b) — items classified as medicines
• California Sales and Use Tax Regulation 1591(c)(3) — exclusion cited in the February 29, 1984 supporting opinion; the annotation summary instead identifies subdivision (c)(2)

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/425-0325.pdf

Original ruling text

425.0325

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

916-445-3723
February 29, 1984
Dear Begin deleted text REDACTED TEXT End deleted text, This is in reply to your letter of February 14, 1984. We understand that your company sells medical supplies. You specialize in incontinent supplies; that is, disposable adult diapers, pant and pad systems, etc. You have recently received an order from a woman with MS. She has a doctor's prescription for your product, and she said that it was her understanding that she would not have to pay tax. You have assumed that, even with a prescription, sales tax is required. Our Regulation 1591, "Prescription “medicines” provides that sales tax does not apply to sales of items classified as "medicines" under paragraph (b) of the regulation, if the medicines are sold on a prescription basis. It is true that the exemption applies to a number of items such as vaseline, rubbing alcohol or medical oxygen which can typically be purchased without prescription. However, these items meet the definition of the term "medicines,” and thus if they are bought in accordance with the order of a physician and surgeon the sale is exempt. Incontinent supplies of the type in question, however, do not come within the definition of the term "medicine." The items in question are excluded from "medicines" under paragraph (c) (3) of the regulation. Accordingly, tax applies to the sale of the items in question notwithstanding the fact that they are sold on a prescription basis. Very truly yours,

Gary J. Jugum
Assistant Chief Counsel
GJJ/jkr