Were tracheostomy and endotracheal tubes exempt when used to breathe for a patient and remove waste?

Plain-English summary

California exempted the described tracheostomy and endotracheal tubes when used postoperatively. The tube and cuff were inserted through a tracheal incision to breathe for the patient and remove metabolic waste.

The letter found two historical bases: the tubes assisted the functioning of a natural body part and were appliances necessary after surgery created an artificial opening for waste removal. Neither basis applied when the tubes only aided a patient temporarily during surgery.

Common questions

Did the tubes qualify during surgery?

No, not when used only as temporary intraoperative assistance.

What use did qualify?

Postoperative use under the functions described in the letter.

Why were two regulatory provisions discussed?

One covered prosthetic devices that assist a natural body part; the other covered postoperative appliances associated with an artificial opening for waste removal.

Citations and references

• Historical California Sales and Use Tax Regulation 1591(b)(5) — prosthetic-device provision applied to the airway tubes
• Historical California Sales and Use Tax Regulation 1591(i) — postoperative artificial-opening and waste-removal provision also applied

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/425-0883-900.pdf

Original ruling text

425.0883.900

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
425.0883.900

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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