When were sales or leases of kinetic-therapy and pressure-reduction medical beds exempt from Florida sales tax?

Plain-English summary

A therapy bed was exempt when sold or leased for an individual patient's own use under a licensed physician's prescription. The Department treated kinetic-therapy and pressure-reduction beds as devices used to alleviate bodily malfunction, even though they were not specifically named on the exemption list.

A hospital, immediate-care facility, physician, or other provider's purchase for general use on its premises was taxable like other tangible personal property. The prescription requirement attached to the individual patient's use, not merely to the equipment's medical purpose.

A treatment facility could instead purchase the bed for resale or re-lease to a patient if four conditions were met: the bed was separately stated on the patient's bill; prescribed exclusively for a particular patient; brought in for that patient and removed when no longer prescribed; and purchased from the supplier using a resale certificate.

What this means for you

Medical use by itself did not make the facility's equipment purchase exempt. The key distinction was a documented, patient-specific prescription and transaction. Facilities using equipment across patients generally faced tax unless they structured and documented a genuine resale or re-lease meeting the ruling's conditions.

Common questions

Q: Was a prescribed therapy bed for one patient's use exempt? Yes.

Q: Was a hospital's general equipment purchase exempt? No.

Q: Could a facility purchase the bed for resale or re-lease? Yes, if it met all four patient-specific billing, prescription, removal, and resale-certificate requirements.

Q: Did the ruling cover both kinetic-therapy and pressure-reduction beds? Yes.

Citations and references

• Fla. Stat. § 212.08(2)(a), (b) — medical-product exemptions
• Fla. Admin. Code r. 12A-1.020(6)(a), (b) — medical products
• Fla. Admin. Code r. 12A-1.021 — prosthetic and orthopedic appliances
• Fla. Admin. Code r. 12A-1.038 — resale certificates
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 02A-019

Original ruling text

SUMMARY

QUESTION: Taxpayer sells and leases therapeutic medical
beds to acute care patients in hospital intensive care
units, medical and surgical floors, skilled nursing
facilities, and the patient's home. Do these beds qualify
for exemption as a medical or prosthetic device when they
are purchased by a treatment facility or leased to a
patient?

ANSWER - Based on Facts Below: Generally, in order for a
medical device to qualify for exemption, it must be a
prosthetic device that is prescribed by a physician.
Although not specifically exempt, these therapeutic beds
would qualify as a device "used to alleviate the
malfunction of any part of the body...." Rule 12A1.021(1)(a), F.A.C. However, a prescription would be
required in order for the purchase of the bed to be tax
exempt. Therefore, the sale directly to the treatment
facility for use on their premises would be subject to tax
in the same manner as other sales of tangible personal
property. The treatment facility could purchase and resell
or re-lease the therapeutic bed to the patient with a
resale certificate, provided that the charge is separately
stated, the bed is prescribed for a specific patient, and
removed from the premises when it is no longer prescribed

Mar 20, 2002

Re: Technical Assistance Advisement 02A-019
XXX ("Taxpayer")
Sales and Use Tax - Kinetic Therapy Beds
Statutes: 212.08(2)(a), (b), F.S.
Rules: 12A-1.020(6)(a), (b), 12A-1.021, F.A.C.

Dear :

This response is in reply to your letter dated February 7, 2002,

requesting the Department's issuance of a Technical Assistance
Advisement ("TAA") pursuant to s. 213.22, F.S., and Chapter 1211, F.A.C., regarding the referenced matter and parties. An
examination of your petition has established that you have
complied with the statutory and regulatory requirements for
issuance of a TAA. Therefore, the Department is hereby granting
your request for issuance of a TAA.

FACTS

Taxpayer is in the business of selling and leasing therapeutic
medical beds to acute care patients in hospital intensive care
units, medical and surgical floors, skilled nursing facilities
and the patients home. These specialized medical beds are used
in the treatment and prevention of disorders associated with
long-term patient immobility, such as pneumonia, atelectasis or
lung collapse, ventilation profusion problems, pressure
ulcerations, skin breakdown, and wound infection. These
specialized medical beds are prescribed by a physician for the
treatment of patients suffering from spinal cord injury, severe
pulmonary complications, multiple trauma, severe burns, skin
graphs, and severe pain.

Taxpayer's products can be classified into two general treatment
classifications: Kinetic Therapy and Pressure Reduction Therapy.
In general, Kinetic Therapy is the continuous side to side
rotation of the patient. The treatment helps to prevent or
treat complications associated with immobility. Pressure
Reduction Therapy provides redistribution of patient weight and
reduction in surface interface pressures, thereby maintaining
proper blood flow.

The placement of an order for Taxpayer's products is initiated
with a written prescription in the form of a doctor's order or
certificate of medical necessity issued by the patient's
treating physician. Typically, the doctor's order is
communicated to the purchasing agent for the facility in which
the patient is being treated. Each order is for a specifically
named patient, as prescribed by a specific treating physician.
Taxpayer issues billings for the product to the facility in
which the patient is being treated.

The product is installed by Taxpayer's medical technicians, who
are responsible for setting the controls on the product to the
specifications of the physician in charge of the patient. The
equipment is then monitored periodically by the Taxpayer's
nursing staff to insure that the product is working properly.
Once it is determined that the patient is no longer in need of
the device, Taxpayer's medical technicians remove the bed from
the treatment facility, sterilize the device and make it
available for use by another patient.

Taxpayer's products are furnished for the treatment of one
specific patient on the prescription of that patient's treating
physician. The products are intended by the Taxpayer to have
medicinal qualities and are intended to substitute for the
patients natural movements which are the body's natural defenses
against pressure ulcerations pneumonia, and wound infection.
Patients requiring the use of Taxpayer's products typically have
lost the ability to move on their own due to a spinal cord
injury, head injury, or coma.

APPLICABLE LAW

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

(2) EXEMPTIONS; MEDICAL.

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;.... There shall also be exempt from the
tax imposed by this chapter... prosthetic and orthopedic
appliances;....

For the purposes of this subsection:

1. "Prosthetic and orthopedic appliances" means any
   apparatus, instrument, device, or equipment used to replace
   or substitute for any missing part of the body, to
   alleviate the malfunction of any part of the body, or to

assist any disabled person in leading a normal life by
facilitating such person's mobility. Such apparatus,
instrument, device, or equipment shall be exempted
according to an individual prescription or prescriptions
written by a physician....

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:

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., provides, in part:

(1)(a) Prosthetic and orthopedic appliances are exempt.
The term "prosthetic and orthopedic appliances" means any
apparatus, instrument, device, or equipment used to replace
or substitute for any missing part of the body, used to
alleviate the malfunction of any part of the body, or used
to assist any disabled person in leading a normal life by
facilitating such person's mobility. Such apparatus,

instrument, device, or equipment shall be exempted
according to an individual prescription or prescriptions
written by a duly licensed practitioner authorized by the
laws of the state to prescribe medicinal drugs, or
according to a list prescribed and approved by the
Department of Health, which list shall be certified to the
Department of Revenue from time to time....

DISCUSSION AND CONCLUSION

Generally, in order for a medical type device to qualify for
exemption from Florida's sales tax, it must be a prosthetic type
device that is prescribed by a physician. See Rule 12A1.021(1)(a), F.A.C. Although not specifically exempt, a Kinetic
Therapy or Pressure Reduction Therapy bed would qualify as a
device "used to alleviate the malfunction of any part of the
body...." Id. However, a prescription would be required in order
for the purchase of the device to be tax exempt.

Accordingly, sales of Kinetic Therapy or Pressure Reduction
Therapy beds are exempt when sold to an individual for his or
her own use under the direction of a licensed physician.
However, sales of these medical devices to hospitals, immediate
care facilities, physicians, or other health care providers for
use on their premises are subject to tax in the same manner as
other sales of tangible personal property.

Furthermore, the hospital or treatment facility could purchase
and resell or re-lease the specialty bed to the patient provided
that: 1) The specialty bed is separately stated on the patient's
bill; 2) the specialty bed has been prescribed for the exclusive
use of a particular patient by a duly licensed physician; 3) the
specialty bed is brought into the hospital or treatment facility
for a particular patient and removed from the facility after it
is no longer prescribed for such patient; and 4) the hospital or
treatment facility extends to Taxpayer a resale certificate in
accordance with Rule 12A-1.038, F.A.C., at the time the facility
leases or purchases the specialty bed.

This response constitutes a Technical Assistance Advisement
under s. 213.22, F.S., which is binding on the Department only

under the 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 and
administrative rule changes or those 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. Confidential information must be
deleted before public disclosure. In an effort to protect
confidentiality, we request that you provide the undersigned
with an edited copy of your request for Technical Assistance
Advisement, the backup material and this response, deleting
names, addresses and any other details which might lead to
identification of the taxpayer. Your response should be
received by the Department within 15 days of the date of this
letter.

Sincerely,

Michael T. Cavanaugh
Tax Law Specialist
Technical Assistance and Dispute Resolution
850-922-9411

Enclosure
Control # 48767

12A-1.021 Prosthetic and Orthopedic Appliances.
(1)(a) Prosthetic and orthopedic appliances are exempt.
The term "prosthetic and orthopedic appliances" means any
apparatus, instrument, device, or equipment used to replace or
substitute for any missing part of the body, used to alleviate
the malfunction of any part of the body, or used to assist any
disabled person in leading a normal life by facilitating such

person's mobility. Such apparatus, instrument, device, or
equipment shall be exempted according to an individual
prescription or prescriptions written by a duly licensed
practitioner authorized by the laws of the state to prescribe
medicinal drugs, or according to a list prescribed and approved
by the Department of Health, which list shall be certified to
the Department of Revenue from time to time. A list of
prosthetic and orthopedic appliances (DR-46NT), Nontaxable
Medical and General Grocery List, dated October 1987, which is
incorporated in this rule and made part of this rule by
reference, and which has been certified to the Department of
Revenue by the Department of Health, is available, without cost,
by one or more of the following methods: 1) writing the Florida
Department of Revenue, Forms Distribution Center, 168
Blountstown Highway, Tallahassee, Florida 32304; or, 2) faxing
the Forms Distribution Center at (850)922-2208; or, 3) using a
fax machine telephone handset to call the Department's automated
Fax on Demand system at (850)922-3676; or, 4) visiting any local
Department of Revenue Service Center to personally obtain a
copy; or, 5) calling the Forms Request Line during regular
office hours at (800)352-3671 (in Florida only) or
(850)488-6800; or, 6) downloading selected forms from the
Department's Internet site at the address shown inside the
parentheses (http://www.myflorida.com/dor/). Persons with
hearing or speech impairments may call the Department's TDD at
(800)367-8331.
(b) The prosthetic and orthopedic appliances listed below
are specifically exempt:
Arch Supports, excluding shoe reliners and pads
Artificial Limbs
Artificial Eyes
Artificial Larynx
Artificial Heart Valves
Artificial Arteries
Artificial Noses and Ears
Abdominal Belts
Back Braces
Batteries, for use in Prosthetic and Orthopedic Appliances
Bone Cement, Nails, Pins, Plates, Screws and Wax
Braces and Supports Worn on the Body to Correct or
Alleviate a Physical Incapacity or Injury

Canes (all)
Catheters
Colostomy Bags and Appliances
Crutches, Crutch Tips, and Pads
Dentures, Denture Repair Kits, Cushions, etc.
Dialysis Machines and Artificial Kidney Machines, Parts and
Accessories
Eyeglasses, Eyelid Load Prosthesis
Fluidic Breathing Assistor
Hearing Aids (repair parts, batteries, wires, condensers,
etc.)
Heart Stimulators
Hypodermic Needles, Hypodermic Syringes, Hypodermic Syringe
Tubing and Parts, when used for medical purposes
Human Organs
Lithotriptor
Mastectomy Pads
Pacemakers (Cardiac)
Patient Safety Vests
Portable Resuscitators
Rupture belts
Suspensories
Trusses
Urinal Bags
Walking Bars
Walkers, including walker chairs
Wheelchairs, including powered models, their parts and
repairs
*NOTE: Gold, silver and other materials/devices temporarily
or permanently incorporated into the human body by physicians or
dentists shall be exempt (i.e.: organ implant, dentures, dental
bridge work and crowns).
(c) Taxpayers who have a question concerning the taxable or
exempt status of a prosthetic or orthopedic appliance may submit
a description of the appliance (appliance name, recommended
usage, etc.) to the Florida Department of Revenue, Technical
Assistance, P.O. Box 7443, Tallahassee, Florida 32314-7443 for a
determination of taxability.
(2)(a) Parts, special attachments, special lettering and
other like items that are added to or attached to tangible
personal property so that a handicapped person can use them are

taxable, unless such items are purchased by a person pursuant to
an individual prescription or prescriptions as prescribed in
paragraph (a) of subsection (1). For example: items installed
on motor vehicles to make them adaptable for use by handicapped
persons, such as special controls for paralytics or amputees,
when purchased by a person pursuant to a written prescription,
are exempt. However, standard or optional equipment, as well as
the motor vehicle, is taxable.
(b) If tangible personal property is sold with special
controls, lettering or devices, and the additional charge for
the added features is separately stated on the sales invoice for
the tangible personal property, that portion of the sales
receipts attributable to the added features is taxable, unless
purchased pursuant to an individual prescription or
prescriptions. For example, a television set sold with a closed
captioned device built-in, the portion of the price attributable
to the closed captioned device, if separately stated on the
sales invoice and purchased by a person pursuant to a written
prescription, may be deducted from the selling price before
computing tax.

Specific Authority 212.17(6), 212.18(2), 213.06(1) FS. Law
Implemented 212.08(2) FS. History-Revised 10-7-68, 1-7-70,
Amended 1-17-71, Revised 6-16-72, Amended 6-9-76, 6-26-78,
12-31-81, Formerly 12A-1.21, Amended 12-8-87.