Were reusable prescription electrical stimulator devices exempt when sold to patients or to medical practitioners for office use?

Subject

Medical Products, Electrical Stimulator Devices

Plain-English summary

A reusable electrical stimulator sold to the patient under a licensed medical practitioner's prescription was exempt from sales tax. The ruling addressed FDA-approved microcurrent and cranial stimulators used to treat anxiety, depression, insomnia, and pain.

A practitioner buying a device for use in the medical practice, without reselling it to a patient, was the consumer and owed tax on the purchase.

The seller could claim a refund for tax collected in error only after refunding the customers and keeping documentation of those repayments.

What this means for you

The same device received different treatment depending on the purchaser and disposition: prescribed sale to the end-user patient versus practitioner-owned office equipment.

Common questions

Q: Was a prescribed device sold to a patient exempt? Yes.

Q: Was a practitioner's office-use device exempt? No.

Q: Could the seller recover tax collected from patients? Yes, after refunding them and documenting the refunds.

Citations and references

• Fla. Stat. § 212.08(2) — prescription medical products and supplies
• Fla. Admin. Code rr. 12A-1.002(1) and 12A-1.020(6) — practitioners and medical products
• Fla. Stat. § 499.005(24) — legend devices and prescriptions
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 01A-046

Original ruling text

SUMMARY

QUESTION: What is the taxable status of reusable,
prescription medical devices.

ANSWER - Based on Facts Below: The sale of a medical device
(such as a therapeutic electrical stimulator device) to an
end user (patient) pursuant to a prescription from a
licensed medical practitioner is exempt from tax. The
purchase by a medical practitioner of a medical device
which will be used in his or her medical practice and not
resold to a patient is taxable.

Aug 07, 2001

Re: Technical Assistance Advisement 01A-046
XXX ("company")
Sales Tax
Medical Products, Electrical Stimulator Devices
Section 212.08(2), F.S.
Rules 12A-1.002(2), 12A-1.020(6), F.A.C.

Dear :

This is in response to your letter of April 27, 2001, requesting
the issuance of a Technical Assistance Advisement regarding the
taxable status of certain electrical stimulator devices which
your company sells in Florida. Your letter provides in part:

To be specific, we sell XXX (micro current electrical
stimulators) and XX-XXX (cranial electrical stimulators)
that are FDA approved electro medical products for the
treatment of anxiety, depression, insomnia and pain. These
products require a doctor's prescription. (Your emphasis)

Law

Section 212.08(2), F.S., provides in part:

(2) EXEMPTIONS; MEDICAL.

(a) There shall be exempt from the tax imposed by this
chapter any medical products and supplies or medicine
dispensed according to an individual prescription or
prescriptions written by a prescriber authorized by law to
prescribe medicinal drugs;....

Rule 12A-1.020, F.A.C., provides, in part:

(6)(a) Medical products and supplies used in the cure,
mitigation, alleviation, prevention or treatment of injury,
illness, disease or incapacity are taxable, unless:

1. Temporarily or permanently incorporated into a patient
   or client by a practitioner of the healing arts licensed by
   the State of Florida.

2. Ordered and dispensed by or on the prescription of a
   duly licensed practitioner authorized by the laws of the
   state to prescribe medicinal drugs; or

3. Ordered and dispensed by a pharmacist pursuant to the
   established dispensing procedures determined by the joint
   committee of medical, osteopathic and pharmacy professions
   as created by section 465.186, F.S.

(b) The sale of medical products or supplies to physicians,
dentists, veterinarians and hospitals is taxable even
though the medical products or supplies may be used in
connection with medical treatment, unless the products and
supplies are specifically exempt from tax under this rule
or in Rule 12A-1.021, F.A.C.

[Rule 12A-1.021, F.A.C. deals with certain exempt
prosthetic and orthopedic appliances, which are not at
issue here.]

Rule 12A-1.002, F.A.C., dealing with "Practitioners of the
Healing Arts" provides:

(1) All licensed practitioners of the healing arts are the
consumers of the various items of tangible personal
property which they use in the rendition of their
professional services and the tax will apply upon their
purchases of items of tangible personal property, including
equipment except such items as are exempt under Rule 12A1.020.

Section 499.005, F.S., provides in part:

Prohibited acts.--It is unlawful to perform or cause the
performance of any of the following acts in this state:

(24) The distribution of a legend device to the patient or
ultimate consumer without a prescription or order from a
practitioner licensed by law to use or prescribe the
device.

Conclusion

The sale of a medical device (such as a therapeutic electrical
stimulator device) to an end user (patient) pursuant to a
prescription from a licensed medical practitioner is exempt from
tax. The purchase by a medical practitioner of a medical device
which will be used in his or her medical practice and not resold
to a patient is taxable.

With regard to refund procedures, you would be entitled to a
refund of any sales tax erroneously collected and subsequently
refunded to your customers. Documentation establishing the
refund to the customer would be required. An Application for
Refund (DR-26) can be found on the Department's internet site
(http://sun6.dms.state.fl.us/dor/), under forms.

Closing Statement

This response constitutes a Technical Assistance Advisement
under s. 213.22, F.S. which is binding on the department only
under facts and circumstances described in the request for this

advice as specified in s. 213.22, F.S. Our response is
predicated on those facts and the specific situation summarized
above. You are advised that subsequent statutory or
administrative rule changes or judicial interpretations of the
statutes or rules upon which this advice is based may subject
similar future transactions to a different treatment than
expressed in this response.

You are further advised that this response, your request and
related backup documents are public records under Chapter 119,
F.S., which are subject to disclosure to the public under the
conditions of s. 213.22, F.S. Your name, address, and any other
details which might lead to identification of the taxpayer must
be deleted by the Department before disclosure. In an effort to
protect the confidentiality of such information, we request you
provide the undersigned with an edited copy of your request for
Technical Assistance Advisement, backup material and response
within fifteen days of the date of this advisement.

Sincerely,

Jonathan E. Swift
Tax Law Specialist
Technical Assistance and Dispute Resolution
(850) 922-4840

Control #45086