Which enteral feeding products were exempt from Florida sales tax when sold to hospitals or physicians, and which remained taxable?

Plain-English summary

Florida exempted the listed disposable enteral feeding products and prescribed ambulatory feeding package, but treated reusable enteral nutrition pumps as taxable medical supplies.

Products 2 through 9 included pump sets, nutrition bags, feeding tubes, gastrostomy kits, connectors, jejunostomy kits, fasteners, and irrigation adapters. Sales to hospitals were exempt when the hospital gave the seller a properly executed resale certificate, and the hospital's physician-ordered use was exempt as prosthetic or orthopedic appliances substituting for the body function of swallowing.

The reusable nutrition pumps in category 1 were taxable. The combined ambulatory transporter and feeding-bag package was exempt when resold under the stated certificate and prescription conditions because the transporter was a component of the prescribed package.

What this means for you

• Exemption depended on the specific product and how it was sold and used.
• Hospitals needed to give the seller a proper resale certificate.
• Reusable enteral pumps did not receive the disposable-product exemption.
• Before claiming a refund of tax collected on exempt products, the seller had to refund its customers and document that repayment.

Common questions

Q: Were feeding tubes, sets, bags, connectors, and adapters exempt? A: Yes, under the stated resale-certificate and physician-order conditions.

Q: Were reusable enteral nutrition pumps exempt? A: No.

Q: Could the seller recover tax previously remitted on exempt products? A: Yes, after refunding customers and filing a documented refund application.

Citations and references

• Fla. Stat. § 212.08(2)(a), (b) — prosthetic and orthopedic appliances
• Fla. Stat. § 212.21(2) — taxation unless specifically exempt
• Fla. Stat. § 212.07(1)(b) — resale requirements
• Fla. Stat. § 215.26(2) — refund claims
• Fla. Admin. Code rr. 12A-1.020, 12A-1.021 — medical products
• 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 96A-028

Original ruling text

Apr 25, 1996

Re TAA 96A-028
Sales of Enteral Feeding Products
Sections 212.08(2)(a), 212.21(2), F.S.
Rules 12A-1.020, 12A-1.021, F.A.C.

Dear:

This is in response to your letter of February 5, 1996, in which you requested the issuance of a technical assistance advisement on behalf of your client, XXXX (hereinafter "Taxpayer"), regarding the taxability of Taxpayer's sale of various enteral feeding products and devices to non-exempt hospitals or physicians in Florida.

You also wish to know in the event that the products in question are not subject to tax, whether Taxpayer can obtain a refund of the amount of tax remitted to the Department on such sales after refunding the tax to its customers. Taxpayer has been collecting and remitting tax on its sales of these products and devices sold to non-exempt hospitals and physicians in Florida.

The products in question are catagorized as:

1. Enteral Nutrition Pumps;
2. Enteral Pump Sets;
3. Pump Sets with Piercing Pin;
4. Enteral Nutrition Bags with Preattached Gravity
   Feeding Sets;
5. Enteral Nutrition Bags with Preattached Pump Sets;
6. Various Enteral Feeding (or gastrostomy) tubes;
7. Y-Port Connectors;
8. T-Fastener Sets; and
9. Feeding Tube Irrigation Adapters.

You furnished us with catalog excerpts on the above

products.

In your letter you explained that the enteral feeding products and devices listed above are used to administer feedings directly into the stomach of a patient. With the exception of the enteral pumps, all the products are intended for one time use, after which they are discarded. You pointed out that the catalog excerpts state that the sale of the feeding tubes, certain connectors and fasteners, is restricted by Federal law to sale by or on the order of a physician.

TAXPAYER ARGUMENT

You referred to TAA 82(A)1-032 issued on July 9, 1982, in which the Department concluded that enteral feeding products sold to hospitals in Florida were exempt from tax as prosthetic or orthopedic appliances used to replace a body function (that of swallowing) and each part is needed to use the system. The TAA covered tubes, bags, stylets and delivery sets.

Next you cited TAA 86A-006 dated February 24, 1986, in which the Department advised that volumetric pumps, controllers, and disposable pumping chambers are exempt from tax due to the similarity between the volumetric pumping chamber and hypodermic syringes which are exempt from tax.

Additionally, you cited TAA 92A-014 dated February 24, 1992, in which the Department stated that a tube inserted in the stomach for feeding purposes appears to be exempt from tax under Rule 12A-1.020(6)(a)1., F.A.C., as a medical product temporarily incorporated into a patient but declined to give a binding opinion because the taxpayer requesting the advisement had not furnished a brochure on the product.

APPLICABLE AUTHORITY

Section 212.21(2), F.S., provides that it is the specific legislative intent to tax each and every sale, use, storage, consumption or rental levied and set forth in Part I, Chapter 212, F.S., except those that are specifically exempted therefrom by Part I, Chapter 212, F.S. Section 212.07(1)(b), F.S.,

provides that a resale must be in strict compliance with the rules and regulations of the Department. Rule 12A-1.038, F.A.C., states that unless the dealer takes from the purchaser a certificate signed by the dealer or the dealer's authorized representative to the effect that the property was purchased for resale and bearing the date, the name and address of the purchaser, the effective date of the certificate, and the number of the dealer's certificate of registration, the sale is deemed to be a taxable sale at retail.

Section 212.08(2)(a), F.S., provides that prosthetic and orthopedic appliances are exempt from tax. Section 212.08(2)(b)1., F.S. provides that "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. The statutory section goes on to provide that such apparatus, instrument, device, or equipment is exempted according to an individual prescription or prescriptions written by a physician licensed under chapters 458, 459, 460, 461, or 466, or according to a list prescribed and approved by the Department of Health and Rehabilitative Services which is certified to the Department of Revenue from time to time and included in the rules promulgated by the Department of Revenue.

However, Rule 12A-1.020 (6)(b), F.A.C., provides that the sale of medical products and supplies to physicians, dentists, and hospitals is taxable even though they may be used in connection with medical treatment, unless the products and supplies are specifically exempt from tax under Rule 12A-1.020, or 12A-1.021, F.A.C.

Concerning applications for refunds of sales tax, section 215.26(2), F.S., provides that they must be filed with the Comptroller within 3 years after the right to the refund shall have accrued, except applications for refunds of sales tax which was paid after September 30, 1994, must be filed with the Comptroller within 5 years after the date the tax is paid.

DEPARTMENT RESPONSE

After reviewing the excerpts from the catalogs you furnished us together with the above cited section of Chapter 212, F.S., and Rules of the Florida Administrative Code, it is our conclusion that your client's sales of the products categorized as numbers 2 through 9, represented in the catalog excerpts as enteral pumps sets, nutrition bags, feeding tubes, gastrostomy kits, Y-Port connectors, laparoscopic jejunostomy kits, T-fasteners sets and feeding tube irrigation adapters, to hospitals are exempt from tax when the hospital extends a properly executed resale certificate to your client at the time of sale. The subsequent use of the above enteral products on the part of the hospital on the order of a physician in providing its service is exempt from tax under section 212.08(2)(a) and (b), F.S., as the use of prosthetic and orthopedic appliances used to substitute for a missing body function, that of swallowing.

The enteral nutrition pumps which are intended for more than one time use are subject to tax as medical products or supplies used in connection with medical treatment as seen in Rule 12A-1.020(6)(b), F.A.C.

In our telephone conversation of February 9, 1996, you explained that the Ambulatory Transporter and Feeding Bag is sold to a hospital or physician as a unit which includes one Ambulatory Transporter and 30 bags with preattached pump sets. The transporter and bags with preattached pumps sets are purchased by the hospital and are provided to the patient by the hospital pursuant to a physician's order, and the hospital bills the patient for the items.

Your client's sale of one of the products listed in category 5, the Ambulatory Transporter and Ambulatory Enteral Feeding Bag with Reattached Pump Set, to hospitals and physicians is exempt from tax when the purchaser extends a properly executed resale certificate to your client at the time of sale of the items. The subsequent sale of the Ambulatory Transporter and Feeding Bag with reattached pump set by the hospital to a patient pursuant to a prescription written by a

licensed physician is exempt from tax as provided in section 212.08(2)(a) and (b), F.S., for prosthetic and orthopedic appliances. The Ambulatory Transporter is exempt from tax because it is a component of the Ambulatory Feeding package which is sold as a unit pursuant to a written prescription.

As to your inquiry regarding a claim for refund; if your client has sold enteral feeding products determined to be exempt from tax, and collected tax thereon, it must first refund the tax to its customers before filing an application for refund with the Department on form DR-26. Your client must provide documentation with its refund application to show that the items are exempt from tax and that the tax was refunded to its customers.

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 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 and your request 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 notify the undersigned in writing within 15 days of any deletions you wish made to the request or the response.

Sincerely,

Richard S. Harrod
Senior Tax Specialist

Tax Policy and Dispute Resolution

RSH/h
control No. 24631