Were Hunter tendon implants used in reconstructive hand surgery exempt medicines?

Plain-English summary

California treated Hunter tendon implants used in reconstructive hand surgery as exempt medicine. The historical rule included articles permanently implanted in the body to assist the functioning of a natural organ, artery, vein, or limb, and the tendon implant met that standard.

Common questions

Did the implant replace the entire limb?

No. The cited provision covered permanent articles that assisted the functioning of a natural body part, as distinguished from replacing that body part.

What procedure was described?

Reconstructive hand surgery.

Was permanence part of the conclusion?

Yes. The source relied on the permanent-implant provision.

Citations and references

• Historical California Sales and Use Tax Regulation 1591(b)(2) — permanent articles assisting natural body function provision quoted in the letter

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/425-0881-300.pdf

Original ruling text

425.0881.300

STATE OF CALIFORNIA

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

July 6, 1978
Mr. J--- P. W--Tax Manager
E--- M--- S----- and ---Roads
--- --- ---, -- XXXXX
Dear Mr. W---:
This is in reply to your letter of June 19, 1978. Your inquiry concerns the correct application of tax to sales of hemodialysis dialyzers, hunter tendon implants and tracheostomy and endotracheal tubes. 1. Hemodialysis dialyzers (coil type and hollow fiber type) allow filtration of the blood while a patient is undergoing treatment on an artificial kidney dialysis machine. We have conclude that hemodialysis dialyzers are exempt from tax as related supplies used in conjunction with artificial kidney dialysis machines under Sales and Use Tax Regulation 1591(i). 2.

Hunter tendon implants – a gliding tendon implant for reconstructive hand

surgery.
We have previously concluded that Hunter tendon implants are exempt from tax under Regulation 1591(b)(2) which provides: “Effective July 1, 1971, the term (‘medicines’) includes bone screws, bone pins, pacemakers, and other articles permanently implanted in the human body to assist the functioning of, as distinguished from replacing all or any part of, any natural organ, artery, vein or limb and which remain or dissolve in the body.” 3. Lanx tracheostomy and endotracheal tubes: Consists of a tube and cuff inserted by means of an incision in a human trachea; respirates patients and removes resulting metabolic waste.

E--- M--- S---

-2-

July 6, 1978
425.0881.300

We have determined that tracheostomy and endotracheal tubes qualify as prosthetic devices under Regulation 1591(b)(5) since they “assist the functioning of a natural part of the human body.” Additionally, they qualify as “appliances . . . necessary as a result of a surgical procedure by which an artificial opening is created in the human body for the elimination of natural waste.” (Regulation 1591(i). We note that tracheostomy and endotracheal tubes do not qualify under either of the above quoted sections if they are use as to aide a patient temporarily during surgery. Their use must be post-operative. If you have further questions regarding this matter, please write this office. Very truly yours,

Mary C. Armstrong
Legal Counsel

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