Were preloaded, nonreusable Visistat skin staplers exempt from sales tax?

Plain-English summary

California initially believed the Visistat device was refillable and reusable. The seller then confirmed that it was sold prefilled and was not reusable.

On the corrected facts, California treated the stapler as a container sold with contents that qualified as medicine. Sales of the preloaded stapler were therefore exempt under the cited container rule.

Common questions

Why did the conclusion change?

The original analysis rested on incorrect facts about refillability and reuse.

Would the same conclusion necessarily apply to a reusable stapler?

No. The product's preloaded and nonreusable design was central.

Citations and references

• California Sales and Use Tax Regulation 1591 — qualifying medicinal contents
• California Sales and Use Tax Regulation 1589(b)(1)(C) — containers sold with contents

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/425-0926.pdf

Original ruling text

425.0926

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

JOHAN KLEHS
First District, Hayward

LEGAL DIVISION - MIC 82
450 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0082)

DEAN ANDAL
Second District, Stockton

Telephone No.: (916) 324-3828
Fax No: (916) 323-3387

ERNEST J. DRONENBURG, JR.
Third District, San Diego
BRAD SHERMAN
Fourth District, Los Angeles

September 26, 1995

KATHLEEN CONNELL
Controller, Sacramento
────────

Mr. M--- W. P--General Ledger Supervisor
P--One --- Drive
P.O. Box XXXXX
R--- T--- Park, NC XXXXX

BURTON W. OLIVER
Executive Director

RE:

SC OH XX-XXXXXX
Skin Staplers

Dear Mr. P---:
I am answering your letter to me dated August 21, 1995, following up on mine to you of July 27, 1995, wherein I determined that the Visistat Skin Staplers did not qualify as medicines under Sales and Use Tax Regulation 1591, based on my conclusion, from the information you supplied, that the staplers were refillable and reusable. You now confirm that they are sold pre-filled and are not reusable. We have previously determined that such staplers constitute containers sold with contents the sale of which are exempt from tax under Regulation 1591. As a result, sales of such pre-loaded staplers are exempt from tax under Regulation 1589(b)(1)(C). For your information, I have included a copy of Regulation 1589. I hope the above discussion has answered your question. If you need anything further, please do not hesitate to write again. Sincerely,

John L. Waid
Senior Staff Counsel
JLW:sr
Enclosure:
cc:

Reg. 1589

Out-of-State District Administrator - OH