Which surgical products sold to hospitals qualified for Florida's prescription and single-patient medical-product exemption?

Plain-English summary

The Florida Department of Revenue applied two main tests to a supplier's list of surgical products sold to hospitals: the item had to be dispensed under federal or state law only by a licensed practitioner's prescription or order, and it had to be intended for one patient without reuse.

Most of the listed products met those represented conditions and were exempt, including snares, single-use markers and light handles, cautery cleaners, closures, blades, needles, drains, clamps, and other single-patient surgical items.

Reusable identification tape and labels were taxable. Brushes were exempt only in their single-use versions and taxable when reusable. Floor mats, floor-suction products, and a spill solidifier were taxable because they were not required to be dispensed by prescription or order.

What this means for you

Medical suppliers and hospitals

Classify each SKU by its legally required dispensing label and intended reuse, not merely by whether it is used in surgery.

Tax and compliance teams

Retain product labeling showing prescription-or-order restrictions and single-patient use. The rule did not require a purchaser exemption certificate for qualifying labeled products, but the seller had to keep supporting records.

Common questions

Q: Were all products used in surgery exempt?
A: No.

Q: Were reusable products exempt?
A: No, under the medical-product rule applied here.

Q: What happened when a brush was offered in both forms?
A: The single-use version was exempt and the reusable version was taxable.

Citations and references

• Fla. Stat. §§ 212.05, 212.08(2), and 213.22
• Fla. Admin. Code r. 12A-1.020(6)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 13A-009

Original ruling text

Executive Director
Marshall Stranburg

SUMMARY
TAX: Sales and Use Tax
TAA NUMBER: 13A-009
ISSUE: Medical Products
STATUTE CITE(S): 212.05, 212.08(2), F.S
RULE CITES(S): 12A-1.020, F.A.C.
QUESTION(S): Are Taxpayer’s list of surgical products and supplies subject to Florida sales
tax?
ANSWER: Section 212.08(2)(a), F.S., provides a specific exemption for certain medical
products and supplies when such medical products and supplies are dispensed according to a
prescription written by a prescriber authorized by law to prescribe medicinal drugs. Items are
also exempt if included on Form DR-46NT, Nontaxable Medical and General Grocery List, as
approved by the Department of Health.
Rule 12A-1.020(6), F.A.C., provides that the sales of medical products, supplies, or devices to
hospitals, healthcare entities, or licensed practitioners are exempt when: 1) dispensed under
federal or state law only by the prescription or order of a licensed practitioner; and 2) intended
for use on a single patient and not intended to be reusable.
May 3, 2013
Re:

Technical Assistance Advisement – TAA 13A-009
Sales and Use Tax - Medical Product
Section: 212.05 and 212.08(2), Florida Statutes (F.S.)
Rule: 12A-1.020, Florida Administrative Code (F.A.C.)
Petitioner: XXX [hereinafter “Taxpayer”]

Dear XXX:
This letter is a response to your petition dated April 8, 2013, for the Department's issuance of a
Technical Assistance Advisement ("TAA") concerning the above referenced party and matter.
Your petition has been carefully examined and the Department finds it to be in compliance with
the requisite criteria set forth in Chapter 12-11, Florida Administrative Code. This response to
your request constitutes a TAA and is issued to you under the authority of Section 213.22, F.S.

Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – James McAdams, Director  Information Services – Tony Powell, Director

www.myflorida.com/dor
Tallahassee, Florida 32399-0100

Technical Assistance Advisement
Page 2

Presented Facts
Your petition provides the following:
[Taxpayer] is a worldwide leader of specialty medical products. We carry an expensive
line of products including XXX, XXX, XXX, XXX, XXX, XXX, and XXX (all products
are primarily single use).
This inquiry is in regards to the taxability on the sale of medical products to hospitals for
use by physicians during a surgical procedure. Please provide a binding ruling on the
taxability of the product families listed on the enclosed list.
The enclosed list of products, along with information about each one, was included with your
petition. The list is as follows:
Medical Product
Snares
Marking Pens
Light Handles
Cautery Tip Cleaner
Transparent Dressings
Wound Closures
Pin Cover
Blades & Scalpels
Needles
Fog Solution
Fog Sponge
Kittner
Vessel Loops
Clamp Cover
Suture Boots
Surgidyne Wound Drainage
Locking Tags
Guards
ID Tape
Brushes
Floor Mats
Floor Suction
Needle Counter
NeedleNest
Safety Pins
Scalpel Holder
Secure It
Soldifier
Syringe Holder
Verisite/Surgiguard Labels

Patient Contacting
Y
Y
N
N
Y
Y
N
Y
Y
Y
Y
Y
Y
Y
Y
Y
N
N
N
N
N
N
N
N
N
N
Y
N
N
N

RX Only ICON
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
N
N
Y
Y
Y
Y
Y
N
Y
Y

Single Use ICON
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
N
N (reuseable brushes only)
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y

Technical Assistance Advisement
Page 3

You also provided documents from your website on each of the medical products listed. After a
presentation and discussion of the statutory and regulatory provisions that address sales tax on
medical products, the Department will discuss each item listed above.
Requested Advisement
Are Taxpayer’s sales of the medical products listed above subject to tax in Florida?
Law & Discussion
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(6), F.A.C., provides in pertinent part:
(6) MEDICAL PRODUCTS, SUPPLIES, OR DEVICES.
(a) “Medical products, supplies, or devices” are any products, supplies, or devices that
are intended or designed to be used for a medical purpose to treat, prevent, or diagnose
human disease, illness, or injury. The purpose is assigned to a product, supply, or device
by its label or its general instructions for use.
(b) Unless specifically exempt, products, supplies, or devices sold to hospitals and
healthcare entities or to licensed practitioners are subject to tax. . . .
(c)1. Medical products, supplies, or devices sold to hospitals, healthcare entities, or
licensed practitioners are exempt when:
a. The medical product, supply, or device must be dispensed under federal or state law
only by the prescription or order of a licensed practitioner; and
b. The medical product, supply, or device is intended for use on a single patient and is not
intended to be reusable.

2. Medical trays and surgical or procedure kits containing medical products, supplies, or
   devices that are labeled to be dispensed only by the prescription or order of a licensed
   practitioner and are intended for use on a single patient are exempt, even when the
   medical tray or kit contains one or more items that, when sold separately, would be
   subject to tax.

Technical Assistance Advisement
Page 4

3. No exemption certificate or Annual Resale Certificate is required to be obtained by the
   selling dealer from the purchasing hospital, healthcare entity, or licensed practitioner to
   document exempt sales of medical products, supplies, or devices that are labeled to be
   dispensed only by the prescription or order of a licensed practitioner. However, selling
   dealers are required to maintain documents in their records evidencing that the medical
   product, supply, or device sold to a hospital, healthcare entity, or licensed practitioner is
   labeled to be dispensed only by the prescription or order of a licensed practitioner.

(d) 4. No exemption certificate or Annual Resale Certificate is required to make
purchases of medical products, supplies, or devices exempt from tax when:
a. The item is listed as an item exempt from tax in Form DR-46NT, Nontaxable Medical
Items and General Grocery List; or,
b. The label of the medical product, supply, or device indicates that it must be dispensed
under federal or state law by the prescription or order of a licensed practitioner and that it
is intended for use on a single patient.
Unless a specific exemption applies, s. 212.05, F.S., provides it is the legislative intent that every
person is exercising a taxable privilege that engages in the business of selling tangible personal
property at retail in this state. For exercising such a privilege, a tax is levied on each taxable
transaction or incident. The tax is due and payable at the rate of 6 percent, plus any applicable
discretionary sales surtaxes imposed under s. 212.055, F.S., on the total consideration received
for each item or article of tangible personal property when sold at retail in this state.
Section 212.08(2)(a), F.S., provides a specific exemption for certain medical products and
supplies when such medical products and supplies are dispensed according to a prescription
written by a prescriber authorized by law to prescribe medicinal drugs. Items are also exempt if
included on Form DR-46NT, Nontaxable Medical and General Grocery List, as approved by the
Department of Health.
Rule 12A-1.020(6), F.A.C., provides that the sales of medical products, supplies, or devices to
hospitals, healthcare entities, or licensed practitioners are exempt when: 1) dispensed under
federal or state law only by the prescription or order of a licensed practitioner; and 2) intended
for use on a single patient and not intended to be reusable.
Medical Products Discussion
1. Snares: A snare is a wire loop used for removing polyps and tumors. Taxpayer states
this item is dispensed under federal law or state law only by a prescription and is intended
for a single use. Sales of this item to a hospital under these conditions are not subject to
tax.

Technical Assistance Advisement
Page 5

2. Marking Pens: Marking pens include utility markers, surgical skin markers, preoperative
   marking products, utility markers, lab markers and superfrost markers. These items
   provide a method of identifying and marking instruments, specimens, incision sites prior
   to surgery, labware, and other objects. The markers are waterproof, non-smearing, and
   can be used on most surfaces. Taxpayer states these items are dispensed under federal
   law or state law only by a prescription and are intended for a single use. Sales of these
   items to a hospital under these conditions are not subject to tax.
3. Light Handles (disposable): Taxpayer offers two disposable light handle systems – rigid
   light or flexible cover. Taxpayer states these items are dispensed under federal law or
   state law only by a prescription and are intended for a single use. Sales of these items to
   a hospital under these conditions are not subject to tax.
4. Cautery Tip Cleaner: Cautery tip cleaners assist in the cleaning and removing of material
   from cautery tips during surgical procedures. A cautery instrument and the cautery tip
   are used to coagulate tissue and to control bleeding. Taxpayer states this item is
   dispensed under federal law or state law only by a prescription and is intended for a
   single use. Sales of this item to a hospital under these conditions are not subject to tax.
5. Transparent Dressings: Taxpayer’s documentation indicates these items are “blend tone
   skin closures – flexible.” These items are a less painful alternative to sutures and
   stapling. Taxpayer states these items are dispensed under federal law or state law only by
   a prescription and are intended for a single use. Sales of these items to a hospital under
   these conditions are not subject to tax.
6. Wound Closures: Taxpayer’s documentation indicates these items are “filament
   reinforced skin closures.” These items are a less painful alternative to sutures and
   stapling. Taxpayer states these items are dispensed under federal law or state law only by
   a prescription and are intended for a single use. Sales of these items to a hospital under
   these conditions are not subject to tax.
7. Pin Covers: Pin covers are used to protect patients, staff, and clothing from the sharp
   ends of pins and wires. Taxpayer states these items are dispensed under federal law or
   state law only by a prescription and are intended for use on a single patient and are
   intended for a single use. Sales of these items to a hospital under these conditions are not
   subject to tax.
8. Blades and Scalpels: Blades and scalpels are thin sharp blades used in surgery. These
   items come in many different sizes and shapes designed for specific types of surgeries.
   Taxpayer states these items are dispensed under federal law or state law only by a
   prescription and are intended for a single use. Sales of these items to a hospital under
   these conditions are not subject to tax.

Technical Assistance Advisement
Page 6

9. Needles: Taxpayer offers a variety of needles that come in many different sizes and
   shapes designed for specific types of medical procedures. Taxpayer states these items are
   dispensed under federal law or state law only by a prescription and are intended for a
   single use. Sales of these items to a hospital under these conditions are not subject to tax.
10. Fog Solution and Sponge: Anti-fog agents and treatments are chemicals that prevent the
    condensation of water in the form of small droplets on the surface of items that resemble
    fog and have applications for use in the medical field. Taxpayer states these items are
    dispensed under federal law or state law only by a prescription and are intended for a
    single use. Sales of these items to a hospital under these conditions are not subject to tax.
11. Kittner: Taxpayer’s information describes this item as a blunt dissecting instrument
    allowing for safe use during laser surgery. Taxpayer states this item is dispensed under
    federal law or state law only by a prescription and is intended for a single use. Sales of
    this item to a hospital under these conditions are not subject to tax.
12. Vessel Loops: Vessel loops are used in occluding, retracting, and identifying arteries,
    veins, tendons, and nerves in surgical procedures. Taxpayer states these items are
    dispensed under federal law or state law only by a prescription and are intended for a
    single use. Sales of these items to a hospital under these conditions are not subject to tax.
13. Clamp Cover: Clamp covers assist in the atraumatic clamping of delicate vessels during
    surgery. Taxpayer states these items are dispensed under federal law or state law only by
    a prescription and are intended for a single use. Sales of these items to a hospital under
    these conditions are not subject to tax.
14. Suture Boots: Taxpayer’s correspondence describes these items as suture aid booties that
    are used to protect, tag, and to help locate sutures. Taxpayer states these items are
    dispensed under federal law or state law only by a prescription and are intended for a
    single use. Sales of these items to a hospital under these conditions are not subject to tax.
15. Surgidyne Wound Drainage: Taxpayer’s correspondence states these items, which
    include drains, collection canisters, and bulb evacuators, are designed to provide superior
    drainage and increased patient comfort to help facilitate early patient ambulation and
    improved surgical recovery time. Taxpayer states these items are dispensed under federal
    law or state law only by a prescription and are intended for a single use. Sales of these
    items to a hospital under these conditions are not subject to tax.
16. Locking Tags: Locking tags are color-coded identification tags for use in identifying
    instruments, carts, trays, containers, or cabinets. These items are available pre-printed
    with “Repair”, “Sharpen”, or “Good” on one side and blank on the other side for writing
    instructions. Taxpayer states these items are dispensed under federal law or state law
    only by a prescription and are intended for a single use. Sales of these items to a hospital
    under these conditions are not subject to tax.

Technical Assistance Advisement
Page 7

17. Guards: Taxpayer’s correspondence refers to these items as “DuoGuards,” endoscope
    guards, and instrument tip protectors. The DuoGuards ensure clamping instruments stay
    in the proper open position. Endoscope guards safeguard the eyepieces of delicate
    endoscopic equipment during storage. Instrument protectors are designed to protect the
    tips of various instruments such as retractors, needles, and endoscopes. These items
    come in a variety of sizes and shapes and colors. Taxpayer states these items are
    dispensed under federal law or state law only by a prescription and are intended for a
    single use. Sales of these items to a hospital under these conditions are not subject to tax.
18. ID Tape and Write-On ID Labels: Taxpayer’s correspondence refers to these items as
    instrument identification tape and write-on ID labels. The tape is flexible and adheres
    securely to instruments and will not chip, flake, peel, or crack and comes in a variety of
    colors and widths. The write-on labels are used on trays, storage areas, cabinets, and
    carts and come in a variety of shapes and colors. Taxpayer describes these items as
    dispensed under federal law or state law only by a prescription but are not intended for a
    single use. Since these items can be reused, sales to a hospital are subject to tax.
19. Brushes: Taxpayer’s correspondence refers to these items as “instrument and channel
    cleaning brushes.” These items are designed to clean surgical/medical instruments and
    endoscopic devices. Taxpayer states these items are dispensed under federal law or state
    law only by a prescription. Taxpayer also states that some of the brushes are reusable.
    Sales of brushes to hospitals that are intended for a single use are not subject to tax.
    Sales of brushes to hospitals that are intended to be reusable are subject to tax.
20. Floor Mats: Floor mats keep floors clean, dry, and slip-free and are designed to
    absorbent. Taxpayer’s floor mats come in a variety of colors and sizes. Taxpayer states
    these items are not dispensed under federal law or state law by a prescription but are
    intended for a single use. Since these items are not dispensed under a prescription, the
    sales of these items to a hospital are subject to tax.
21. Floor Suction: Taxpayer’s correspondence refers to these items as a “WaterBug Quiet
    Floor Suction Device” and a “WaterBoom Quiet Floor Suction Strip.” The WaterBug is
    device that is easily maneuverable and removes fluids with a push of your foot. The
    WaterBoom creates a dam to hold back, contain, and quietly suctions fluid. Taxpayer
    states these items are not dispensed under federal law or state law by a prescription but
    are intended for a single use. Since these items are not dispensed under a prescription,
    the sales of these items to a hospital are subject to tax.
22. Needle Counter: Taxpayer’s correspondence did not include any information on this
    product. Taxpayer’s list enclosed with its TAA request shows this item as requiring a
    prescription and intended for one time use. Sales of this item to a healthcare provider
    under these conditions are not subject to tax.

Technical Assistance Advisement
Page 8

23. Needle Nest and Syringe Holder: Taxpayer’s correspondence refers to these items as a
    syringe and scalpel handling system. They are used to provide safe and easy handling
    and storage for used syringes and scalpels and come in a variety of sizes. Taxpayer states
    these items are dispensed under federal law or state law only by a prescription and are
    intended for a single use. Sales of these items to a hospital under these conditions are not
    subject to tax.
24. Safety Pins: Safety pins are packaged sterile. Taxpayer states these items are dispensed
    under federal law or state law only by a prescription and are intended for a single use.
    Sales of these items to a hospital under these conditions are not subject to tax.
25. Scalpel Holder: Scalpel holders are surgical scalpel and blade handles and come in a
    variety of shapes to hold different sizes of surgical scalpels and blades. Taxpayer states
    these items are dispensed under federal law or state law only by a prescription and are
    intended for a single use. Sales of these items to a hospital under these conditions are not
    subject to tax.
26. Secure It: Taxpayer’s correspondence refers to these items as vascular clamps. Clamps
    are used in occluding vessels. These items come in a variety of sizes. Taxpayer states
    these items are dispensed under federal law or state law only by a prescription and are
    intended for a single use. Sales of these items to a hospital under these conditions are not
    subject to tax.
27. Solidifier: This product is used to absorb liquid spills and qualifies as a Solid Regulated
    Medical Waste. Taxpayer states this item is not dispensed under federal law or state law
    by a prescription but is intended for a single use. Since this item is not dispensed under a
    prescription, the sales of these items to a hospital are subject to tax.
28. Verisite/Surgiguard Labels: Taxpayer’s correspondence did not include any information
    on this product. Taxpayer’s list enclosed with its TAA request shows this item as
    requiring a prescription and intended for one time use. Sales of this item to a healthcare
    provider under these conditions are not subject to tax.
    Closing Statement
    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 upon 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 from that which is expressed in
    this response.

Technical Assistance Advisement
Page 9

You are further advised that this response, your request, and related backup documents are public
records under Chapter 119, F.S., and 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 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 10 days of the date of this letter.
Sincerely,

Michael T. Cavanaugh
Tax Law Specialist
Technical Assistance and Dispute Resolution
Ctrl No: 139545