Were the clinical-laboratory products reviewed in Florida TAA 24A-013 exempt from sales tax?

Plain-English summary

The Department concluded that all eighty-six medical products reviewed were exempt from Florida sales and use tax.

The products were test kits, controls, and calibrators sold to Florida clinical laboratories. Each was dispensed under a prescription written by a practitioner authorized by Florida law to prescribe medicinal drugs.

The Department also explained that controls and calibrators required to validate human test results were necessary parts of the diagnostic procedure and qualified as exempt chemical compounds used to diagnose human disease.

What this means for you

The exemption depended on the documented products, prescription labels, human diagnostic use, and clinical-laboratory sales. Similar products should be reviewed against their own labels and use.

Common questions

How many products did the ruling cover? Eighty-six.

What product types were reviewed? Test kits, controls, and calibrators.

Were all eighty-six exempt? Yes, under the facts documented in the advisement.

Citations and references

• Fla. Stat. §§ 212.02, 212.05, and 212.08 and Fla. Admin. Code r. 12A-1.020, as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 24A-013

Original ruling text

QUESTION: Are Taxpayer’s Florida sales of the
below subject to Florida sales and use tax?

medical products described

ANSWER: Taxpayer’s sales to
in Florida of the
, which
are all dispensed according to prescriptions written by a licensed practitioner authorized by Florida
law to prescribe medicinal drugs and are labeled as test kits, controls, and calibrators, are exempt
from Florida sales and use tax.

Via Email:

October 2, 2024

Re:

Technical Assistance Advisement – TAA #: 24A-013
(“Taxpayer”)
Sales and Use Tax – Medical
Sections 212.02, 212.05, and 212.08, Florida Statutes - (“F.S.”)
Rule 12A-1.020, Florida Administrative Code - (“F.A.C.”)
BP #:

Dear
This is in response to your letter dated,
, requesting this Department’s issuance of a
Technical Assistance Advisement (“TAA”) pursuant to Section(s.) 213.22, F.S., and Rule Chapter
12-11 F.A.C, Florida Administrative Code, regarding the matter discussed below. Your request
has been carefully examined, and the Department finds it to be in compliance with the requisite
criteria set forth in Chapter 12-11, F.A.C. This response to your request constitutes a TAA and is
issued to you under the authority of s. 213.22, F.S.

Technical Assistance Advisement
October 2, 2024
Page 2

REQUESTED ADVISEMENT
Are Taxpayer’s Florida sales of the
Florida sales and use tax?

medical products described below subject to

FACTS
Taxpayer is a registered Florida sales and use tax dealer. Taxpayer is selling various calibrators,
test kits, and controls to
in Florida. Taxpayer has asserted that all of the
it is seeking advisement on in this TAA carry
. Taxpayer has also
asserted that none of the products in this advisement are considered to be machines.2
Below is a list of the
under advisement. Taxpayer has classified the
into 3 categories (Calibrators, Controls, and Test Kits).

PRODUCT

PRODUCT NAME

PRODUCT TYPE

Taxpayer’s original TAA request had more than
in which it requested advisement on. However,
Taxpayer could only provide labels for
. Therefore, this TAA will only opine on the
for which Taxpayer provided sufficient documentation.
2
Merriam-Webster’s online dictionary defines the term, “machine,” as: a mechanically, electrically, or electronically
operated device for performing a task (See https://www merriam-webster.com/dictionary/machine).
1

TOTALS

Technical Assistance Advisement
October 2, 2024
Page 3

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Page 4

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October 2, 2024
Page 5

LAW AND DISCUSSION
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
property3 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 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. Exemptions from tax are strictly construed
against the claimant. Wanda Marine Corp. v. Dep't of Revenue, 305 So. 2d 65, 69 (Fla. 1st DCA
1975).
Section 212.08(2)(a), F.S., provides in part that there shall be exempt from Florida sales and use
tax chemical compounds and test kits used for the diagnosis or treatment of human disease, illness,
or injury dispensed according to an individual prescription or prescriptions by a licensed
practitioner authorized by Florida law to prescribe medicinal drugs. Further, this section provides
an exemption from tax for items that are included on form DR-46NT, Nontaxable Medical and
General Grocery List, as approved by the Department of Business and Professional Regulation.
Form DR-46NT, under the heading, “Chemical Compounds and Test Kits,” provides that
“chemical compounds and test kits used for the diagnosis or treatment of disease, illness, or injury,
dispensed according to an individual prescription or prescriptions written by a licensed practitioner
authorized by Florida law to prescribe medicinal drugs are exempt.” In addition, form DR-46NT
provides a nonexhaustive list of chemical compounds and test kits for human use which are
exempt, with or without a prescription.
Rule 12A-1.020(7)(a), F.A.C., promulgated to administer s. 212.08(2)(a), F.S., provides that blood
analyzers, blood collection tubes, and tubes containing chemical compounds, and test kits used to
test human blood for detectors of illness, disease, or injury are specifically exempt from tax.
However, chemical compounds and test kits that are not used to diagnose or treat human disease,
illness, or injury are subject to tax. Rule 12A-1.020(7)(a), F.A.C., also provides the nonexhaustive
list of chemical compounds and test kits for human use which are exempt, with or without a
prescription.
For the purposes of the statutory exemption found in s. 212.08(2)(a), F.S., the term "chemical
compound" is not defined; so, the plain and common meaning of these words must be considered
and researched. The term "chemical" is defined as "a substance ... obtained by a chemical process
or used for producing a chemical effect.”4 Further the term "compound" is defined as "composed
of or produced by the union of several elements, ingredients, parts or things.”5 Hence, a chemical
compound would be a substance formed by chemical union of two or more elements or ingredients
in definite proportion by weight, via a chemical process, having as a purpose the production of a
chemical effect.
3

Tangible personal property means and includes personal property which may be seen, weighed, measured, or touched
or is in any manner perceptible to the senses. See s. 212.02(19), F.S.
4
Webster's New Collegiate Dictionary, page 189.
5
Webster's New Collegiate Dictionary, page 229.

Technical Assistance Advisement
October 2, 2024
Page 6

Controls are reagents6 which are standards of comparison in scientific experimentation that are
used for quality assurance for a particular test that is being conducted. Calibrators are used to
determine, check, or rectify the graduation of any instrument or test giving quantitative
measurements. Therefore, the control and calibrator products in question fit the description of
"chemical compounds" under s. 212.08(2)(a), F.S.
It must now be determined if these controls and calibrators are used for the diagnosis or treatment
of human disease, illness, or injury.
Rule 59A-7.029, F.A.C., administered by the Agency for Health Care Administration, provides
that laboratories shall establish and follow written quality control procedures for monitoring and
evaluating the quality of the testing process of each method to assure the accuracy and reliability
of patient test results and reports in accordance with Clinical Laboratory Improvement
Amendments7 (CLIA) requirements. The laboratory must utilize test methods, equipment,
instrumentation, reagents, materials, and supplies that provide accurate and reliable test results and
test reports as required by CLIA.
CLIA are United States federal regulatory standards that apply to all clinical laboratory testing
performed on humans in the United States. The CLIA Program sets standards and issues
certificates for clinical laboratory testing. CLIA defines a clinical laboratory as any facility which
performs laboratory testing on specimens derived from humans for the purpose of providing
information for the diagnosis, prevention, or treatment of disease or impairment, and for the
assessment of health. A key objective of the CLIA is to ensure the accuracy, reliability and
timeliness of test results regardless of where the test was performed.
Since State and Federal regulations both require that a patient’s test results must be validated by
the use of calibration material or a control sample, these products are a necessary part of a test kit
and the procedure which is used in the diagnosis or treatment of human disease, illness, or injury.
As such, they would be exempt from tax as chemical compounds used for the diagnosis of human
disease pursuant to s. 212.08(2)(a), F.S.
Taxpayer’s sales of test kits, controls, and calibrators that carry RX prescription labels are exempt
from Florida sales and use tax when sold to clinical laboratories in Florida. Section 212.08(2)(a),
F.S.
In addition, Taxpayer’s sales of test kits, controls, and calibrators that are for human use are exempt
with or without a prescription if such test kits, controls, and calibrators are found on the list
provided on form DR-46NT under the heading, Chemical Compounds and Test Kits. For your
reference, I have enclosed a copy of form DR-46NT.
6

Reagents are substances that produce chemical reactions used to detect, examine, or measure a component, or to
produce another substance because of its chemical or biological activity.
7
Clinical Laboratory Improvement Amendments of 1988 and Federal Rules Adopted Thereunder – Section 353 of
the Public Health Service Act known as the Clinical Laboratory Improvement Amendments of 1988 and Title 42Public Health, Chapter IV, Part 493, Laboratory Standards.

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October 2, 2024
Page 7

CONCLUSION
Taxpayer’s sales to clinical laboratories in Florida of the 86 medical products, which are all
dispensed according to prescriptions written by a licensed practitioner authorized by Florida law
to prescribe medicinal drugs and are labeled as test kits, controls, and calibrators, are exempt from
Florida sales and use tax.
This response constitutes a TAA 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 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., 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 TAA, 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 ten (10) days of the date of this letter.
If you have any further questions with regard to this matter and wish to discuss them, you may
contact me directly at (850)717-6363.
Sincerely,

Leigh L. Ceci
Leigh L. Ceci, MAcc
Tax Law Specialist
Office of Technical Assistance
Enclosure: Form DR-46NT, Nontaxable Medical Items and General Grocery List
Record ID: 7001209558

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October 2, 2024
Page 8

TADR Satisfaction Survey
The Florida Department of Revenue invites you to complete the online TADR Satisfaction Survey to help
us identify ways to improve our service to taxpayers. The survey is an opportunity to provide feedback
on your recent experience with the Department’s office of Technical Assistance and Dispute Resolution
(TADR). To access the survey, place the following address in your browser’s access bar:
https://tadr.questionpro.com

Technical Assistance Advisement
October 2, 2024
Page 9

When you open the survey, you’ll be asked to enter the following information. This information will
enable you to complete and submit the survey.
Notification number:

7001209558

Respondent code:

44

Tax type:

Sales and Use Tax

Correspondence type: Technical Assistance
If you need technical assistance accessing the survey, please email Douglas Charity at
[email protected].
Thank you.