Were blood tubing, cannula systems, declotting kits, and related hemodialysis supplies exempt prosthetic devices?

Plain-English summary

California treated blood tubing sets, cannula systems, declotting trays, declotting catheter sets, declotting aspirators, and related accessories and instruments as taxable because they did not qualify as prosthetic devices under the historical rule.

A cannula system could qualify under a separate provision when it was permanently implanted in the human body. The exception depended on permanent implantation, not merely use in hemodialysis.

Common questions

Were blood tubing and declotting supplies exempt?

No under the described facts.

Could a cannula system qualify?

Yes, if permanently implanted in the body.

Was the exception based on the prosthetic-device rule?

No. The letter identified the separate permanent-implant provision as the possible exception.

Citations and references

• California Revenue and Taxation Code section 6369(c)(2) — permanent-implant provision supporting the cannula exception
• California Revenue and Taxation Code section 6369(c)(4) — prosthetic-device provision the listed products did not meet

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/425-0530.pdf

Original ruling text

425.0530

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-2488

December 7, 1977

Ms. J--- K. C--General Accounting Manager
L---/Division of V--XXXX --- --- Boulevard
---, California XXXXX

SR -- XX-XXXXXX

Dear Ms. C---:
This is in reply to your letter of October 24, 1977 to Mr. Templeton of our Long Beach office, which has been referred to the undersigned for reply. You have inquired about the recent amendments to Revenue and Taxation Code Section 6369, effective October 1, 1977. As we understand it, the L--- Division of V--- Corporation manufactures and distributes hemodialysis products, mainly blood tubing sets. A list of the products described in your catalogs includes: Blood Tubing Sets Cannula Systems Declotting Trays Declotting Catheter Sets Declotting Asperators Accessories and Instrumentation Revenue and Taxation Code Section 6369(c) now provides in part: “‘Medicines’ as used in this section shall mean and include: … (2) Bone screws, bone pins, pacemakers, and other articles, other than dentures, permanently implanted in the human body to assist the functioning of any natural organ, artery, vein, or limb and which remain or dissolve in the body;…

Ms. J--- K. C--SR -- XX XXXXXX

-2-

December 7, 1977
425.0530

(4)
Prosthetic devices, other than dentures and auditory, ophthalmic and ocular devices or appliances, designed to be worn on or in the person of the user to replace or assist the functioning of a natural part of the human body…” We have concluded that the products listed above would not be considered prosthetic devices as defined in Section 6369(c)(4). They would, therefore, not be considered “medicines” within the meaning of Revenue and Taxation Code Section 6369 and tax would apply to their sale. A possible exception would exist in the case of the “cannula systems” which appear in some cases to be implanted in the human body. These items would be exempt from the tax if they are permanently implanted in the human body. If you have further questions concerning this matter, please write this office. Very truly yours,

Mary C. Armstrong
Legal Counsel

MCA:jw
bc:

Long Beach – Auditing (SK)
Audit Evaluation and Planning Unit