When was a wheelchair and occupant securement system exempt from Florida sales tax?

Plain-English summary

Florida's tax result depended on who bought the wheelchair securement system and why. A direct sale to a patient under a physician's prescription was exempt as an orthopedic or prosthetic appliance used to facilitate a disabled person's mobility.

A sale to a for-profit transportation provider for installation in its buses or vans was taxable because the product had no specific across-the-board exemption. Sales to original-equipment manufacturers, distributors, and other resellers were exempt as sales for resale. Properly documented sales to governmental or nonprofit tax-exempt entities were also exempt, and Florida tax did not apply when the product was delivered to the customer outside Florida.

What this means for you

The product's mobility function did not make every sale exempt. Prescription facts, the purchaser's status, resale documentation, exemption documentation, and delivery location controlled the listed outcomes.

Common questions

Q: Was a prescribed direct sale to a wheelchair user exempt? Yes.

Q: Was a sale to a for-profit bus or van operator exempt? No. The ruling treated that sale as taxable.

Q: Were sales to vehicle manufacturers or distributors taxable? Not when they qualified and were documented as sales for resale.

Citations and references

• Fla. Stat. § 212.08(2) — medical products and prosthetic or orthopedic appliances
• Fla. Admin. Code r. 12A-1.020 — medical products and supplies
• Fla. Admin. Code r. 12A-1.021 — prosthetic and orthopedic appliances
• Fla. Admin. Code r. 12A-1.038 — documenting exempt and resale transactions
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 02A-042

Original ruling text

SUMMARY

QUESTION: What is the taxable status of a wheelchair and
occupant "securement system"?

ANSWER - Based on Facts Below: When sold directly to a
patient pursuant to a physician's prescription, they would
be exempt from tax. Sales to for-profit transportation
service providers for installation in their buses or vans
would be taxable. Sales to "Original Equipment
Manufacturers" (OEM's) would be exempt from tax by reason
of resale, as would sales to distributors or other
resellers of the product. Sales to governmental entities
and nonprofit tax-exempt entities would also be exempt from
tax.

Oct 09, 2002

Re: Technical Assistance Advisement 02A-042
XXX ("Taxpayer")
Sales and Use Tax
Orthopedic Products
Section 212.08(2), F.S.,
Rules 12A-1.020, 12A-1.021, F.A.C.

Dear :

This is in response to your letter of August 26, 2002, in which
you request the issuance of a Technical Assistance Advisement
regarding the taxable status of certain products that your
company sells. Your letter provides in part:

The purpose of this letter is to get a written technical
advisement from the Department of Revenue on whether or not
our company's products would be considered exempt under
12A-1.021, "Prosthetic and Orthopedic Appliances".

[Taxpayer] manufacturers Wheelchair and Occupant Securement

Systems (See brochure included). These securement devices
are utilized in vans, buses, and other specialty
Paratransit vehicles in order to safely transport
individuals in wheelchairs to their desired destination
(e.g. school, doctor, hospital, home, etc.). The
securement systems are sold primarily to Original Equipment
Manufacturers (OEM's), authorized distributors or
government agencies (e.g. Jacksonville Transportation
Authority, City of Gainesville) throughout North America,
including Florida, Europe, Japan and Australia[.]

Although our product is not "specifically exempt" under
D.O.R.'s "Nontaxable Medical and General Grocery List" (DR46NT), we believe it fits the definition (bolded section)
of a Prosthetic and Orthopedic Appliance set by the Florida
D.O.R.:

"... 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".

Similar to Patient Safety vests (which are specifically
exempt), the very nature and purpose of our product is to
help the disabled be mobile; by allowing the persons to be
safely transported to wherever they need to be (e.g.
grocery store, doctor's, school, etc.). As a result, the
disabled persons are able to go wherever they need or would
like to, as a "normal" person would, not being restricted
by their disability.

In addition, consider the Americans with Disabilities Act
requires any new or used buses and vans to not only be
equipped with securement devices such as ours, but to also
designate a securement location for the wheelchair
passenger (See Appendix A). As buses and vans are the most
common modes of transportation for the disabled, not using
securement devices, such as ours, would actually hinder the
mobility of those disabled persons in wheelchairs.

APPLICABLE AUTHORITY

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

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

(b) 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 licensed under chapter 458, chapter
   459, chapter 460, chapter 461, or chapter 466, 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 and included in the rules
   promulgated by the Department of Revenue. (emphasis
   supplied)

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.

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.... (emphasis
supplied)

(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.

RESPONSE

In general, all medical products (including prosthetic and
orthopedic appliances) sold or dispensed to patients pursuant to
a doctor's prescription or orders are exempt from tax. Reusable
medical devices, machinery, and equipment that are purchased by
healthcare practitioners are generally taxable. The exception
is that certain medical products and certain orthopedic and
prosthetic appliances are specifically exempt from tax,
regardless of whether a prescription is involved and regardless
of whether the product is sold to a patient or to a healthcare
practitioner.

In the case of your wheel chair securement system, there is no
specific tax exemption for it. However, when it is sold
directly to a patient pursuant to a physician's prescription, it
would be exempt from tax. Sales to for-profit transportation
service providers for installation in their buses or vans would
be taxable. In the examples you have given, sales to "Original
Equipment Manufacturers" (OEM's) would be exempt from tax by
reason of resale, as would sales to distributors or other
resellers of your product. Sales to governmental entities and
nonprofit tax- exempt entities would also be exempt from tax.
(See Rule 12A-1.038, F.A.C., on how to document sales to exempt
customers and sales for resale.) Sales to entities located
outside the state of Florida would not be subject to Florida tax
if the systems are delivered to the customer outside the state
of Florida.

This response constitutes a Technical Assistance Advisement
under s. 21 3.22, 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 #51625