Were Fogarty embolectomy catheters exempt when used to treat hemodialysis patients?

Plain-English summary

California concluded that Fogarty embolectomy catheters purchased solely for treating patients undergoing hemodialysis qualified as exempt medicines. The opinion treated them as supplies related to kidney dialysis under the historical prescription-medicine regulation.

The facility's purchase was therefore not subject to tax. The letter suggested giving the supplier an exemption certificate containing the information required by Regulation 1667(c)(1).

Common questions

Did the letter exempt every use of a Fogarty embolectomy catheter?

No. Its conclusion addressed catheters used in treating patients undergoing hemodialysis.

Was the facility's purchase taxable under those facts?

No.

What documentation did the letter suggest?

An exemption certificate containing the information described in Regulation 1667(c)(1), provided to the supplier.

Citations and references

• California Revenue and Taxation Code section 6369 — prescription-medicine exemption cited in the opinion
• Historical California Sales and Use Tax Regulation 1591(j) — dialysis appliances and related-supplies provision applied in the opinion
• California Sales and Use Tax Regulation 1667(c)(1) — exemption-certificate information referenced in the opinion

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/425-0388.pdf

Original ruling text

STATE OF CALIFORNIA
425.0388
STATE BOARD OF EQUALIZATION

916-445-6493

May 11, 1984

This is to confirm our telephone conversation held on May 11, 1984 regarding your inquiry as to the application of tax to the sale of Fogarty embolectomy catheters. We understand that your facility provides hemodialysis treatment to patients, and that you purchase embolectomy catheters solely for use in such medical treatment.

Tax does not apply to the sale of prescription "medicines," as that term is defined under Section 6369 of the Revenue and Taxation Code and Sales and Use Tax Regulation 1591. Subsection (j) of Regulation 1591 provides that certain "appliances" and related supplies necessary as the result of any surgical procedure by which an artificial opening is created in the human body for the elimination of natural waste, shall be deemed to be dispensed on prescription within the meaning of [Revenue and Taxation Code] section 6369." Included within the meaning of the term "appliances and related supplies" are kidney dialysis machines (hemodialysis and peritoneal dialysis) and certain related supplies.

We have previously decided that Fogarty embolectomy catheters qualify as tax exempt "medicines" under Regulation 1591 (j) when they are used in the treatment of patients undergoing hemodialysis. Accordingly, your purchase of this item is not subject to tax. We suggest that when you purchase this type of catheter for use in patient hemodialysis, you should provide your supplier with an exemption certificate which contains the required information as described in Subsection (c)(1) of Regulation 1667.

Enclosed for your reference are copies of Sales and Use Tax Regulation 1591 "Prescription Medicines," and Regulation 1667 "Exemption Certificates." If you have any further questions, please write this office.

Very truly yours,

Charles J. Graziano
Tax Counsel

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