Did a prescription for asthma or chemical-sensitivity relief make an air purifier or filter eligible for Illinois's reduced medical-appliance tax rate?

Plain-English summary

An online retailer sold air purifiers and filters, sometimes to customers who considered them medically necessary for asthma or chemical sensitivities. It asked whether a prescription allowed use of Illinois's reduced medical-appliance rate.

IDOR said a prescription alone was not enough. A medical appliance was an item intended by its manufacturer to directly substitute for a malfunctioning part of the body. Items could be prescribed, bought by health professionals, or purchased directly by individuals, but those purchase pathways did not themselves establish qualification.

Hearing aids, eyeglasses, and contact lenses were examples of qualifying corrective appliances. Diagnostic, treatment, and rehabilitative equipment generally did not qualify even when prescribed because it did not directly substitute for a malfunctioning body part.

The GIL stated that qualifying drugs, medicines, and medical appliances had a historical 1% State rate plus applicable local tax, while nonqualifying items used the historical 6.25% general merchandise rate plus local tax. It did not expressly decide which rate applied to the requester's particular products.

Common questions

Did a prescription guarantee the reduced rate? No.

What was the core test? Manufacturer intent that the item directly substitute for a malfunctioning part of the body.

Did IDOR specifically approve air purifiers? No. It provided general standards only.

Citations and references

• 86 Ill. Adm. Code 130.311(d) and 130.311(d)(7)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2012.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2012/st-12-0017.pdf

Original ruling text

ST 12-0017-GIL 03/23/2012 MEDICAL APPLIANCES
A medical appliance is defined as an item which is intended by its manufacturer for use in
directly substituting for a malfunctioning part of the body. See 86 Ill. Adm. Code 130.311.
(This is a GIL.)

March 23, 2012

Dear Xxxxx:
This letter is in response to your letter that we received on March 14, 2012, in which you
request information. The Department issues two types of letter rulings. Private Letter Rulings
(“PLRs”) are issued by the Department in response to specific taxpayer inquiries concerning the
application of a tax statute or rule to a particular fact situation. A PLR is binding on the Department,
but only as to the taxpayer who is the subject of the request for ruling and only to the extent the facts
recited in the PLR are correct and complete. Persons seeking PLRs must comply with the
procedures for PLRs found in the Department’s regulations at 2 Ill. Adm. Code 1200.110. The
purpose of a General Information Letter (“GIL”) is to direct taxpayers to Department regulations or
other sources of information regarding the topic about which they have inquired. A GIL is not a
statement of Department policy and is not binding on the Department. See 2 Ill. Adm. Code
1200.120. You may access our website at www.tax.illinois.gov to review regulations, letter rulings
and other types of information relevant to your inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. In your letter you have stated and made inquiry as follows:
Upon calling the Illinois State Gov., I was directed to writing to you. I sell air purifiers
and filters online to people in the United States primarily. I sell them at retail price.
Often these items are a medical necessity for asthma relief or chemical sensitives. Can
the customer supply a prescription stating for medical relief of (the ailment), and I offer
them low tax rate of 1%.? What exactly do I need income tax –wise for this?

DEPARTMENT’S RESPONSE:
Please see the Department’s regulation at 86 Ill. Adm. Code Section 130.311, which is its
regulations governing Drugs, Medicines, Medical Appliances, and Grooming and Hygiene Products.
Those products that qualify as drugs, medicines and medical appliances are taxed at a lower State
rate of 1% plus any applicable local taxes. Those items that do not qualify for the low rate of tax are
taxed at the general merchandise rate of 6.25% plus applicable local taxes.
The definition of a medical appliance is "an item which is intended by its manufacturer for use
in directly substituting for a malfunctioning part of the body." Please note that 86 Ill. Adm. Code
130.311(d)(7) provides that medical appliances may be prescribed by licensed health care
professionals for use by a patient, purchased by health care professionals for the use of patients, or

purchased directly by individuals. Note, though, not all items prescribed by physicians or other
licensed health care professionals qualify for the low rate. Examples of items that qualify for the
reduced rate are corrective medical appliances such as hearing aids, eyeglasses and contact lenses.
As a general proposition, diagnostic, treatment, and rehabilitative equipment items do not qualify for
the reduced rate of tax as medical appliances, even if prescribed by a licensed health care
professional, because such items are not "for use in directly substituting for a malfunctioning part of
the body," 86 Ill. Adm. Code 130.311(d).
I hope this information is helpful. If you require additional information, please visit our website
at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217) 782-3336.
Very truly yours,

Debra M. Boggess
Associate Counsel
DMB:msk