Are walk-in bathtubs, in-home wheelchair lifts, and modular ramps exempt from Colorado sales tax as medical equipment?

Plain-English summary

A company sells three home-accessibility products and asked whether each qualifies for Colorado's durable medical equipment exemption: walk-in bathtubs (with or without a lift to help a person get in and out), in-home wheelchair mobility lifts (which carry a person and wheelchair up stairs, indoors or out), and modular ramps (placed over stairs so a wheelchair can get into and out of a home — not portable, but not permanently affixed). All can be obtained through a prescription from a licensed medical professional.

Colorado exempts both durable medical equipment (DME) and mobility enhancing equipment, and the Department sorted the three products between those two exemptions:

Wheelchair lifts and modular ramps — appear to be "mobility enhancing equipment." That category is statutorily defined as equipment (and repair/replacement parts) dispensed pursuant to a prescription that:

1. is primarily and customarily used to provide or increase the ability to move from one place to another;
2. is appropriate for use in a home, a person's community, or a motor vehicle;
3. is not generally used by a person with normal mobility; and
4. does not include a motor vehicle or factory-installed motor-vehicle equipment.

The lifts (carrying a person up a flight of stairs) and ramps (letting a wheelchair enter/exit a home or business) fit: they're prescribed, they increase the ability to move from place to place, they work in a home or business, and they're not used by people with normal mobility. The Department noted the statute explicitly lists lift chairs and patient lifts as examples. So they appear to qualify as mobility enhancing equipment.

Walk-in bathtubs — not mobility enhancing, but possibly DME. A bathtub isn't primarily used to move a person from place to place, so it's not mobility enhancing equipment. The Department then tested it against DME, defined as prescribed equipment that (1) can withstand repeated use, (2) is primarily/customarily used to serve a medical purpose, (3) is generally not useful absent illness or injury, and (4) is not worn on the body. A walk-in bathtub is prescribed, withstands repeated use (it becomes a permanent fixture), and isn't worn on the body. The sticking point is prong (3): tubs can be marketed for or used by people without an illness or injury, and in those cases would likely be taxable, so the Department had some reservation. But it generally believes walk-in bathtubs serve a medical purpose, and concluded that if a tub is prescribed by a licensed provider for someone with an illness or injury, it appears eligible for the DME exemption.

Across all three: even though a buyer could get any of these without a prescription, the Department stressed that to be exempt they must be dispensed pursuant to a prescription.

What this means for you

Accessibility and home-modification businesses

Sort your products by the right exemption: stair lifts and modular ramps read as mobility enhancing equipment (they help a person move from place to place), while a walk-in bathtub is tested as durable medical equipment (it serves a medical purpose but doesn't aid movement). In both cases, keep the prescription — without it the item is taxable, no matter how medical it looks.

Medical suppliers

For a walk-in bathtub, the close call is whether it's for someone with an illness or injury. Prescribed-for-a-medical-condition tubs appear exempt; tubs sold for general comfort/convenience to someone without illness or injury are likely taxable. The prescription plus the medical need are what carry the exemption.

Accountants and tax professionals

Two parallel four-part definitions under § 39-26-717: mobility enhancing equipment (movement-focused, home/community/vehicle, not for the normally-mobile) and durable medical equipment (medical purpose, repeated use, not useful absent illness/injury, not body-worn). The "not useful absent illness or injury" prong is what makes the walk-in bathtub a closer call than the lifts and ramps. Every exemption here is gated on a prescription. Watch the home-rule-city caveat below.

Common questions

Q: Are wheelchair stair lifts and modular ramps exempt in Colorado?
A: They appear to qualify as mobility enhancing equipment when prescribed — they help a person move from place to place, work in a home or business, and aren't used by people with normal mobility.

Q: Is a walk-in bathtub exempt?
A: It can be, as durable medical equipment, if it's prescribed by a licensed provider for someone with an illness or injury. The Department had reservations because tubs can be bought by people without illness or injury, in which case they're likely taxable.

Q: Do these items have to be prescribed to be exempt?
A: Yes. Even though a buyer could obtain them without a prescription, the Department said they're exempt only if dispensed pursuant to a prescription.

Q: What's the difference between mobility enhancing equipment and durable medical equipment?
A: Mobility enhancing equipment is about helping a person move from place to place (lifts, ramps, lift chairs, patient lifts). Durable medical equipment serves a medical purpose, withstands repeated use, isn't useful absent illness/injury, and isn't worn on the body (the walk-in bathtub route).

Q: Can I rely on this letter?
A: No. A General Information Letter is general guidance, is not binding on the Department, and makes no determination on any specific facts. It also doesn't cover self-collected home-rule city taxes.

Citations and references

Statutes and rules:
- § 39-26-717, C.R.S. (exemptions for medical equipment and supplies)
- § 39-26-717, C.R.S. (statutory four-part definition of "mobility enhancing equipment"; lists lift chairs and patient lifts as examples)
- § 39-26-717, C.R.S. (statutory four-part definition of "durable medical equipment")
- Department Rule 24-35-103.5 (GIL / PLR procedure)

Related rulings: [[gil-14-014-hemodialysis-devices]] (durable medical equipment four-part test), [[gil-14-012-infusion-pumps]] (prescription / provider-furnished routes), [[gil-15-021-medical-equipment-and-supplies]], [[gil-15-017-replacement-batteries-in-electric-wheelchairs]].

Source

• Landing page: https://tax.colorado.gov/sales-use-tax-letter-rulings
• Original PDF: https://tax.colorado.gov/sites/tax/files/documents/GIL-14-024.pdf

Original ruling text

Office of Tax Policy
P.O. Box 17087
Denver, CO 80217-0087
[email protected]

GIL-14-024
November 4, 2014
XXXXXXXXXXXXX
Attn: XXXXXXXXXX
XXXXXXXXXXXXX
XXXXXXXXXXXXX
Re: Walk-in Bathtubs, Wheelchair Lifts, Modular Ramps
Dear XXXXXXXXX,
You submitted on behalf of XXXXXXXXXXXXXX (“Company”) a request for guidance to
determine the applicability of Colorado sales or use tax on walk-in bathtubs, in-home
wheelchair mobility lifts, and modular ramps.
The Colorado Department of Revenue (“Department”) issues general information letters
and private letter rulings. A general information letter provides a general overview of the
relevant tax issues and is not binding on the Department. A private letter ruling provides
a specific determination for a specific set of facts, is binding on the Department but not
on the taxpayer, and requires payment of a fee. For more information about general
information letters and private letter rulings, please see Department Rule 24-35-103.5 at
www.colorado.gov/revenue/tax > Tax Library > Rulings.
The Department initially treats your request as one of a general information letter. If you
would like the Department to issue a private letter ruling on the issues you raise, you can
resubmit a request and fee in compliance with Department Rule 24-35-103.5. It is
important to remember that general information letters, such as this one, are general
discussions of tax law and are not a determination of the tax consequence of any
particular action or inaction.
Issues
Do walk-in bathtubs, in-home wheelchair mobility lifts, and modular ramps qualify for the
durable medical equipment exemption?
Background
Company sells walk-in bathtubs, in-home wheelchair mobility lifts, and modular ramps.
Walk-in bathtubs may have lifts to aid a person’s ability to get in and out of the bathtub
or may be purchased without a lift. In-home wheelchair mobility lifts are used for
transporting a person and a wheelchair up stairs. These lifts can be used inside or
outside the house. A modular ramp is placed over stairs so people in wheelchairs can

get into and out of their homes. The modular ramp is not portable, but is not permanently
affixed to the house.
All products are sold directly to customers and can be obtained through a prescription by
a licensed medical professional. The products are either delivered from a location
outside Colorado to an in-state warehouse and then delivered directly to the customer by
Company’s representatives, or may be delivered directly to the customer via common
carrier from an out-of-state location. Company represents that title transfers to the
customer at the point of delivery to the customer.
Discussion
Colorado exempts a number of medical equipment and supplies from state and stateadministered sales and use taxes. Specifically, Colorado exempts all sales of durable
medical equipment and mobility enhancing equipment. Mobility enhancing equipment is
statutorily defined as:
Equipment, including repair and replacement parts for such equipment, dispensed
pursuant to a prescription, that:
1) Is primarily and customarily used to provide or increase the ability to move
from one place to another;
2) Is appropriate for use in a home, in a person’s community, or in a motor
vehicle;
3) Is not generally used by a person with normal mobility; and
4) Does not include any motor vehicle or equipment on a motor vehicle
normally provided by a motor vehicle manufacturer.
Company represents that in-home wheelchair mobility lifts and modular ramps are all
dispensed pursuant to a prescription by a licensed provider. In addition, in-home
wheelchair mobility lifts and modular ramps are primarily and customarily used to
provide or increase the ability to move from one place to another and can be used in a
home or business because the in-home wheelchair mobility lift allows a person to get up
a flight of stairs within or outside a home, and the modular ramp allows a person to get
into and out of a home or business that requires climbing stairs to enter the home or
business. In-home wheelchair mobility lifts and modular ramps are also not generally
used by a person with normal mobility. Therefore, it appears that in-home wheelchair
mobility lifts and modular ramps are mobility enhancing equipment. Moreover, the
statute explicitly lists lift chairs and patient lifts as examples of mobility enhancing
equipment. However, it does not appear that walk-in bathtubs are mobility enhancing
equipment because the bathtub is not primarily and customarily used to provide or
increase the ability to move from one place to another.
Colorado also exempts from tax the sale and use of durable medical equipment. We,
thus, consider whether the walk-in bathtub qualifies as durable medical equipment.
Durable medical equipment is statutorily defined as:
Equipment, including repair and replacement parts for such equipment, dispensed
pursuant to a prescription, that:
1) Can withstand repeated use;
2) Is primarily and customarily used to serve a medical purpose;
3) Is generally not useful to a person in the absence of illness or injury; and
4) Is not worn on the body.
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DR 4010A (06/11/14)

Company represents that a walk-in bathtub is dispensed pursuant to a prescription by a
licensed provider. In addition, walk-in bathtubs are able to withstand repeated use
because the walk-in bathtub becomes a permanent fixture of a house and is not worn in
or on the body.
It is the Department’s understanding that these bathtubs may be marketed for or used in
the absence of illness or injury and, in these circumstances, would likely be subject to
tax. For this reason, Department has some reservation about whether the walk-in bath
qualifies for this exemption. However, we generally believe that walk-in bathtubs are
used to serve a medical purpose. Therefore, if a walk-in bathtub is provided pursuant to
a prescription by a licensed provider to someone with an illness or injury, such walk-in
bathtub would appear to be eligible for the durable medical equipment exemption.
Although it is the Department’s understanding that someone may obtain any of these items
without a prescription, we note that in order for these items to be exempt, they must be
dispensed pursuant to a prescription.
Miscellaneous
This letter represents the good faith opinion of Department personnel who are knowledgeable
on state taxes issues. However, the Department does not make a specific determination here
on any of the issues raised and the Department is not bound by this general information letter.
The Department administers state and state-administered local sales and use taxes. This letter
does not address sales and use taxes administered by home-rule cities and home-rule
counties. You may wish to consult with local governments which administer their own sales or
use taxes about the applicability of those taxes. Visit our web site at
www.colorado.gov/revenue/tax for more information about state and local sales taxes.
Enclosed is a redacted version of this letter. Pursuant to statute and regulation, this redacted
letter will be made public within 60 days of the date of this letter. Please let me know in writing
within that 60 day period whether you have any suggestions or concerns about this redacted
letter.
Sincerely,

Office of Tax Policy
Colorado Department of Revenue

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DR 4010A (06/11/14)