When were single-patient prescription medical devices exempt from Florida sales tax?

Subject

Medical Products

Plain-English summary

Single-patient medical products were exempt when they met two conditions: they were intended for one-time use, and federal law required a prescription legend restricting sale to or on the order of a licensed practitioner. The Department identified medical procedure trays and surgical supplies as examples within that rule.

The exemption did not cover reusable prescription-legend devices such as x-ray machines. The ruling revised and expanded the Department's response in TAA 99A-024.

What this means for you

Medical purpose alone did not establish the exemption. The product's intended reuse and legally required label were decisive under this advisement.

Common questions

Q: Were single-use procedure trays potentially exempt? Yes, when they bore the required federal prescription warning.

Q: Were reusable prescription devices exempt under this rule? No.

Q: Did sale to a physician or hospital automatically make a product exempt? No; the product still had to qualify under the statute or rule.

Citations and references

• Fla. Stat. § 212.08(2)(a) — medical-product exemption
• Fla. Admin. Code r. 12A-1.020(6)(a) — medical products and supplies
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 99A-024R

Original ruling text

SUMMARY

QUESTION: Whether medical supplies and devices which are
used exclusively on one patient for the cure, mitigation,
treatment or prevention of illness or disease and contain
the federal warning restricting the product or supply to
sale by or on the order of licensed physician or other
licensed practitioner are taxable?

ANSWER - Based on Facts Below: Section 212.08(2)(a), F.S.
provides an exemption for medical products and supplies, or
medicines, which are dispensed according to an individual
prescription or prescriptions written by a prescriber
authorized by law to prescribe medicinal drugs. Included
within the scope of this exemption are those devices, such
as medical procedure trays and surgical supplies, which
meet both of the following criteria: (a) they are intended
for one-time use; and (b) they are required under federal
law to bear a prescription legend that reads either "RX
only", or "CAUTION: Federal law restricts this device to
sale by or on the order of a _____" [designation of a
licensed health care practitioner authorized to use or
order use of the device]. The exemption does not extend to
prescription legend devices that are intended to be reusable, and thus would not be applicable to items such as
x-ray machines or similar diagnostic machinery.

Aug 11, 2000

Re: Technical Assistance Advisement 99A-024R
Request for Clarification
Sales and Use Tax
Medical Products
Section 212.08(2)(a), F.S.
Rule 12A-1.020, F.A.C.

Dear :

This is in response to your letter of February 14, 2000, and our
several telephone conversations, in which you requested
clarification of Technical Assistance Advisement #99A-024
regarding the taxable status of certain medical products and
supplies, including medical kits, medical trays, medical packs
and IV systems.

Original Request for a Technical Assistance Advisement

Your March 24, 1999 letter provides in part:

... The medical products in question are administered to
patients pursuant to the order of a licensed physician, are
strictly regulated by the Federal government, and cannot be
dispensed without an order from a physician or licensed
practitioner. On the packaging of each of the medical
products is a statement which reads "CAUTION: FEDERAL
(U.S.A.) law restricts this device to sale by or on the
order of a physician or other licensed practitioner."

Supplemental Information Provided Subsequent to Original TAA

... The medical supplies and devices which we are
requesting further clarification on are items which are
used exclusively on one patient for the cure, mitigation,
treatment or prevention of illness or disease and contain
the federal warning restricting the product or supply to
sale by or on the order of a physician or other licensed
practitioner.

The medical products and supplies in question are items
that we term as "single patient use" items. Examples of these
items include disposable skin and surgical staplers (filled with
staples), ear syringes, surgical needles, guidewires,
introducers, clamps, anti-embolism stockings, suction tubing,
warming blankets, probes, rectal tubes, retrieval devices, and
chest drains. All of these items are used in the cure,
mitigation, treatment or prevention of illness or disease of a
single patient and are mandated by the federal government to be
dispensed by or on the order of a physician....

Revised and Expanded Response to Original Request

Section 212.08, F.S., provides in pertinent part:

(2) EXEMPTIONS; MEDICAL.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; hypodermic needles; hypodermic syringes;
chemical compounds and test kits used for the diagnosis or
treatment of human disease, illness, or injury; and common
household remedies recommended and generally sold for
internal or external use in the cure, mitigation,
treatment, or prevention of illness or disease in human
beings, but not including cosmetics or toilet articles,
notwithstanding the presence of medicinal ingredients
therein, 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. There shall
also be exempt from the tax imposed by this chapter
artificial eyes and limbs; orthopedic shoes; prescription
eyeglasses and items incidental thereto or which become a
part thereof; dentures; hearing aids; crutches; prosthetic
and orthopedic appliances; and funerals....

(k) This subsection shall be strictly construed and
enforced.

Rule 12A-1.020 F.A.C., provides in pertinent 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:

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.

The sale of medical products or supplies to physicians,
dentists, veterinarians and hospitals is taxable even
though the medical products or supplies may be used in
connection with medical treatment, unless the products and
supplies are specifically exempt from tax under this rule
or in Rule 12A-1.021, F.A.C.

Section 212.08(2)(a), F.S. provides an exemption for medical
products and supplies, or medicines, which are dispensed
according to an individual prescription or prescriptions written
by a prescriber authorized by law to prescribe medicinal drugs.
Included within the scope of this exemption are those devices,
such as medical procedure trays and surgical supplies, which
meet both of the following criteria: (a) they are intended for
one-time use; and (b) they are required under federal law to
bear a prescription legend that reads either "RX only," or
"CAUTION: Federal law restricts this device to sale by or on the
order of a _____" [designation of a licensed health care
practitioner authorized to use or order use of the device]. The
exemption does not extend to prescription legend devices that
are intended to be re-usable, and thus would not be applicable
to items such as x-ray machines or similar diagnostic machinery.

REVISED CONCLUSION

Medical products qualify for the exemption under s.
212.08(2)(a), F.S., and Rule 12A-1.020 F.A.C. when they are for
single patient use and contain the federal warning restricting
their sale by or on the order of a licensed physician.

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 and
administrative rule changes or that 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.

Sincerely,

Michael T. Cavanaugh
Tax Law Specialist
Technical Assistance and Dispute Resolution
850-922-9411
Enclosure
Control #40380

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