Were nonmedicated wound dressings and packing exempt because they promoted healing and moisture?

Plain-English summary

The seller described nonmedicated wound dressings and packing used on serious open wounds. According to the request, the materials promoted new-cell development and helped retain moisture to accelerate healing.

California nevertheless applied Regulation 1591(c)(2), which specifically excluded dressings from the definition of medicine. The claimed healing effects did not change the products' classification, so their sales were taxable.

Common questions

Did promoting healing make the products medicine?

No. The express dressing exclusion controlled the opinion.

Did the source concern medicated dressings?

No. The described items were not medicated.

Citations and references

• California Revenue and Taxation Code section 6369 — prescription-medicine exemption referenced in the opinion
• California Sales and Use Tax Regulation 1591(c)(2) — dressings excluded from the definition of medicine

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/425-0987.pdf

Original ruling text

425.0987

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION

MEMBER
First District

1020 N STREET, SACRAMENTO, CALIFORNIA
PO BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001
TELEPHONE (916) 920 - 7445

BRAD SHERMAN
Second District, Los Angeles
ERNEST J. DRONENBURG, JR.
Third District, San Diego
MATTHEW K. FONG
Fourth District, Los Angeles
GRAY DAVIS
Controller, Sacramento

November 16, 1994

BURTON W. OLIVER
Executive Director

Re:

X----------------------------Sales Tax on Medical Supplies

Dear X------------------------,
I am responding to your latest letter to me dated October 5, 1994. You asked if sales or use tax applies to the sales by your company X---------- of certain medical items. You attached to your letter copies of presumably pages from a supply catalogue. OPINION In our previous correspondence I have discussed the legal principles governing the prescription medicines exemption from sales and use tax provided by Revenue and Taxation Code section 6369, interpreted and implemented by Regulation 1591, and so for the sake of brevity will not repeat it here. (Unless otherwise stated, all further statutory citations are to the Revenue and Taxation Code.) Please remember that, as a rule, items used to diagnose a condition or to apply medicine or treatment to the patient are not considered to be medicines. (Reg. 1591(c) (2).) Based on the above standard, we conclude as to the items at issue as follows: 1. Microfoam Surgical Tape. You indicate that this product is "tape utilized to hold dressings in place during the surgery." The catalogue says it is for "pressure dressings." "Dressings" are specifically listed in Regulation 1591(c) (2) as being "devices" excluded from the definition of "medicine." Sales of this item are subject to tax. 2. Soap. You ask if sales of soaps are exempt from tax. As you know, we have previously determined that medicated soaps when applied to the skin of the patient for treatment of the patient are considered "medicines" under Regulation 1591(b) (1). (Annot. 425.0700.) You ask if over-the-counter soaps such as Ivory and Dial are considered medicines also. The regulation not only requires that the item be a "substance or preparation intended for use by external or internal application in the diagnosis, cure, mitigation, treatment or prevention of disease," but also that it be "commonly recognized as a substance or preparation intended for that use." Over-the-counter soaps such as Dial or Ivory are sold for general household and cosmetic use and cannot be said to be commonly recognized as medicines. (See, e.g., Annot. 425.0820.) Such soaps do not qualify

as medicines under the regulation with the result that their sales are subject to tax. We note that sales of medicated soaps over-the-counter or for non-exempt purposes are also subject to tax. 3. Wound Dressing and Wound Packing. You state that this type of item "is utilized on serious, open wounds and although it is not medicated, it is made of material that actually speeds up the healing process which generates new cells to develop. It also helps keep the wound moisturized which promotes accelerated healing." Again, "dressings" are specifically excluded from the definition of "medicine" under Regulation 1591(c) (2), with the result that sales of such items are subject to tax. 4. Testicular Gel Implants. "This is silicon implants put into the testicles when replacement is necessary due to disease (ex. cancer)." We have previously determined that such implants are medicines under Regulation 1591(b) (2). 5. Condoms. We have previously determined that these items are "appliances, devices, etc." excluded from the definition of "medicine" under Regulation 1591 (c) (2), with the result that sales of such items are subject to tax. 6. Robinson Urethral Catheter. As you noted, we have previously held that Robinson catheters are not medicines but that urethral catheters are. You attach copies of a portion of Senior Tax Counsel Mary C. Armstrong's letter dated October 2, 1989, showing this conclusion and of a catalogue page showing the Robinson catheter but do not include a description of the operation of the product. I am therefore unable to give you a definitive opinion on this subject and can only assume that we have previously found that the Robinson catheter is not permanently implanted, used for drainage through a natural or artificial opening in the body, or is a supply related to an exempt item. (See, Annot. 425.0230.) 7.

Feeding Tubes. See response to #5.

8.

Feeding Bags and Anti-Reflux Valves. See response to #5.

I hope that the above discussion has answered your question. If you need anything further, please do not hesitate to write again. Sincerely,

John L. Waid
Tax Counsel
JLW:te
Cc:

OH – District Administrator