Did implanted hydrocephalus shunt valves, catheters, reservoirs, supports, and connectors qualify as medicines?

Plain-English summary

California exempted the listed pressure-regulating valve, ventricular catheters and catheter-reservoirs, access devices, reservoir, catheter support, connectors, and atrial or peritoneal catheters. Together, these products formed a surgically implanted shunt that drained excess cerebrospinal fluid from the brain cavity to the peritoneal cavity or jugular vein.

The products qualified because they were permanently implanted to assist the functioning of the brain.

Common questions

What did the shunt system do?

It maintained intracranial pressure by providing a drainage pathway for excess cerebrospinal fluid.

Why were its components exempt?

They were permanently implanted and assisted brain function.

Did the opinion cover temporary external drainage products?

No. It addressed the listed implanted shunt components.

Citations and references

• California Sales and Use Tax Regulation 1591(b)(2) — permanent-implant provision applied to the hydrocephalus shunt 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/425-0418.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Out-of-State – Compliance (JL)

From:

Charles J. Graziano

Subject:

X-----------------

425.0418

Date:

March 1, 1984

This is in reply to your memo of January 25, 1984 concerning the current application of tax to the sale of certain medical items produced by X-------------------. The products in question are articles or devices used in the medical treatment of persons suffering from hydrocephalus, an abnormal accumulation of fluid in the cranial vault. This treatment consists of surgically implanting a valve regulated shunt system in the patient. Essentially, the shunt consists of a slit-valve, a radiopaque ventricular catheter, connector(s), and either a atrial or peritoneal catheter. The purpose of this shunt system is to properly maintain intracranial pressure by serving as a pathway for the drainage of excess cerebrospinal fluid between the patient’s brain cavity (ventricle) and either the patient’s peritoneal cavity (i.e., ventriculo-peritoneal shunt), or jugular vein (i.e., ventriculo – atrial shunt). We have previously decided that these ventricle shunt products qualify as exempt prescription medicines under Sales and Use Tax Regulation 1591 (b) (2) because they are articles permanently implanted in the human body to assist the functioning of the brain. Therefore, it is our opinion that tax does not apply to the sale or use of the following X------------ products: Pressure-Regulation Components X------------------- Cruciform-Slit Valve

Exempt

Ventricular Access Devices
X------------------- Ventricular Catheters
X------------------- Slotted Ventricular Catheters
X------------------- Catheter-Reservoir

Exempt
Exempt
Exempt

X------------------- Slotted Catheter-Reservoir
X------------------- Frontal Horn Catheter-Reservoir
X------------------- Slotted Frontal Horn Catheter-Reservoir X------------------- McComb Neonatal Catheter-Reservoir

Exempt
Exempt
Exempt
Exempt

Proximal and Distal Components
X------------------- Rickham Type Reservoir
X------------------- Burr Hole Catheter Support
X------------------- Fixation and Joining Connectors

Exempt
Exempt
Exempt

Distal Catheters
X------------------- Atrial Catheters
X------------------- Peritoneal Catheters

CJG:ba

Exempt
Exempt