Were diagnostic opaques and dyes exempt medicines when administered internally for X-ray examinations?

Plain-English summary

California treated diagnostic opaques and dyes as exempt medicines. Hospitals and medical practitioners administered the substances internally to patients to facilitate diagnostic X-ray photographs, and the products were classified as drugs in the Pharmacopeia.

The opinion relied on their internal application to the human body for diagnosing disease.

Common questions

Did laboratory use outside the body support this exemption?

No. The holding relied on internal administration to the patient.

What diagnostic function did the products serve?

They facilitated X-ray imaging during patient examinations.

Did the same letter address another product?

Yes. It separately treated permanently implanted cardiac pacemakers as medicine.

Citations and references

• California Revenue and Taxation Code section 6369 — medicine definition applied to internally administered diagnostic substances

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/425-0580.pdf

Original ruling text

STATE OF CALIFORNIA

425.0580

STATE BOARD OF EQUALIZATION

September 1, 1965

Gentlemen:
This is in reply to your letter of August 27 regarding the application of California sales or use tax with respect to diagnostic opaques and dyes and Implantable Cardiac Pacemakers. It is our understanding that opaques and dyes are sold to hospitals and medical practitioners for administering to patients undergoing examination. The opaques and dyes are applied internally and facilitate the taking of diagnostic x-ray photographs. They are classified in Pharmacopeia as drugs. Implantable Cardiac Pacemakers are mechanical devices which assist the heart in maintaining an adequate heart beat rate. These devices are surgically implanted in patients by hospitals and doctors. Inasmuch as opaques and dyes are substances intended for use by internal application to the human body in the diagnosis of disease, and Implantable Cardiac Pacemakers are devices which are surgically implanted and remain permanently in patients, both qualify as medicines under Section 6369 of the Revenue and Taxation Code. Very truly yours,

George A. Trigueros
Associate Tax Counsel
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