Was the Arroya adaptive downhill skiing system exempt as a prescription medicine?

Plain-English summary

California treated the Arroya downhill skiing system as taxable. The system was a lightweight, maneuverable sled sold with straps that secured a skier with disabilities to the sled.

The opinion classified the system as an apparatus, device, or other physical equipment excluded from “medicine” under the historical regulation. Although Regulation 1591(b) contained exceptions for some products, including specified prosthetic devices, none covered the Arroya system.

Common questions

Did the product's adaptive purpose make it exempt?

No. The opinion applied the listed medicine exceptions and found no one covering this type of skiing equipment.

What exactly was taxed?

The retail sale of the described maneuverable sled and special strap system.

Why does the source include a 1997 memorandum?

The later memorandum proposed concise annotation language based on the attached 1983 opinion.

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(c)(3) — equipment exclusion quoted in the opinion
• Historical California Sales and Use Tax Regulation 1591(b) — exceptions considered and found inapplicable

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/425-0822-750.pdf

Original ruling text

STATE OF CALIFORNIA

425.0822.750

STATE BOARD OF EQUALIZATION

916-445-6493

November 29, 1983

Dear X---------------------,
This in reply to your letter of October 10, 1983 in which you request our opinion as to the correct application of tax to “adaptive equipment” designed for people with disabilities. We understand that your firm manufactures a downhill skiing system (“Arroya”) for persons with disabilities. Essentially, this system consists of a maneuverable sled to be used by handicapped persons. This is a lightweight durable device which is sold with a special strap system that secures the skier to the sled much like a foot to a ski boot. Generally, under California Sales and Use Tax Law, the sale or use of tangible personal property in this state is subject to tax, unless otherwise exempted from taxation. Section 6369 of the Revenue and Taxation Code and Sales and Use Tax Regulation 1591 (copy enclosed), which interprets and applies the statute, provides that prescription “medicines” are exempt from sales and use tax. Regulation 1591 (c)(3) provides that the following items are excluded from the term “medicines”: “Articles which are in the nature of splints, bandages, pads, compresses, supports, dressings, instruments, apparatus, contrivances, appliances, devices or other mechanical, electronic, optical, or physical equipment or article or component parts and accessories thereof.” (Emphasis added) Paragraph (b) of Regulation 1591 lists several exceptions to the items excluded from the term “medicines” in paragraph (c). For example, certain prosthetic devices qualify as exempt medicines under paragraph (b)(5) of this regulation. None of the exceptions contained in paragraph (b), however, cover the type of item you have presented for our consideration. Accordingly, we are of the opinion that the “Arroya” downhill skiing system is excluded from the term “medicines” under Regulation 1591, and that the retail sale of this device is subject to tax. If you have any further questions concerning this matter, please write this office. Very truly yours,

Charles J. Graziano
Tax Counsel

State of California

Board of Equalization

Memorandum

To:

David H. Levine

From:

John L. Waid

Subject:

Annotation Section 425.000(b)
Specific Items Classified

425.0822.750

Date:

February 27, 1997

Attached hereto please find a copy of a ltter dated November 29, 1983, from Staff counsel Charles Graziano to Mr. Peter Axelson regarding the “Arroya” downhill skiing system, which appears to be a device to allow paraplegics to ski downhill. We have annotated most issues concerning transport for the handicapped, but this area has not been covered. I suggest the following language: “Skiing Systems. The ‘Arroya’ downhill skiing system consists of a maneuverable sled sold with a special strap system that secures the skier to the sled. It is designed to let disabled persons ski. None of the exemptions in Regulation 1591(b) cover this type of item. Accordingly, sales of ‘Arroya’ downhill skiing systems are subject to tax.” JLW:sr