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