Does Illinois tax hyperbaric oxygen chambers, and other medical devices, at the reduced 1% medical-appliance rate or the general 6.25% rate?

Plain-English summary

An authorized dealer of hyperbaric oxygen chambers (HBOT devices) asked the Illinois Department of Revenue what sales tax rate applies to its equipment, noting that a doctor's prescription is required for every sale. The Department responded with a General Information Letter rather than a binding ruling, explaining that it could not decide the specific question because the dealer had not described how the chambers function or are used.

Illinois taxes tangible personal property at two different Retailers' Occupation Tax rates. Items that qualify as "medical appliances" are taxed at a reduced 1% state rate, plus any applicable local taxes; everything else is taxed at the general 6.25% rate. Under 86 Ill. Adm. Code 130.311(e), a medical appliance is an item that directly substitutes for a malfunctioning part of the human body — the regulation lists examples such as breast implants, pacemakers, artificial limbs, dental prosthetics, crutches and orthopedic braces, dialysis machines, wheelchairs, mastectomy forms and bras, mobility scooters, and sleep apnea devices. By contrast, "other medical tools, devices, and equipment such as x-ray machines, laboratory equipment, and surgical instruments" do not qualify, even though they may be used in patient treatment, because they don't directly substitute for a body part.

The letter also flags that most local governments cannot add their own tax on top of 1%-rate items, but two special districts can: the Regional Transportation Authority (RTA) and the Metro East Mass Transit District (MED). Depending on the county, RTA adds 1.25%, 1%, or 0.75%, and MED adds 0.75% or 0.25%, on top of the state rate. So whether hyperbaric chambers ultimately land at 1% + transportation-district tax, or 6.25% + full local tax (including Home Rule Municipal Retailers' Occupation Tax), turns entirely on whether the chamber itself directly substitutes for a malfunctioning body part — a fact-specific question the Department did not resolve here.

What this means for you

Medical equipment dealers and retailers

If you sell medical devices in Illinois, don't assume a prescription requirement alone gets you the 1% rate — the test in 86 Ill. Adm. Code 130.311(e) is whether the item directly substitutes for a malfunctioning body part, not whether a doctor ordered it. Devices that treat, diagnose, or support a patient without substituting for a body part (the regulation names x-ray machines, lab equipment, and surgical instruments) are taxed at the full 6.25% rate. If your product isn't squarely on the example list, consider requesting a Private Letter Ruling with full facts about how the device functions, since a GIL cannot resolve fact-specific questions like this one.

Accountants and tax professionals advising sellers of medical devices

When classifying a client's product, document exactly how it functions and whether it replaces a lost or diminished body part due to congenital defects, trauma, infection, tumors, or disease — that's the operative test under 130.311(e)(1). Also remember to layer on the correct local tax: most home-rule municipalities cannot tax 1%-rate goods, but RTA (Cook, DuPage, Kane, Lake, McHenry, Will counties) and MED (St. Clair and Madison counties) can, so the total rate for a qualifying medical appliance is not simply 1%.

Common questions

Q: Does a doctor's prescription automatically qualify a device for the 1% medical-appliance tax rate?
A: No. The Department's guidance is based on whether the item directly substitutes for a malfunctioning part of the human body, not on whether a prescription was required for the sale.

Q: Did the Department decide whether hyperbaric oxygen chambers qualify as medical appliances?
A: No. The Department said the question required very specific facts about the chambers' uses and functions that a General Information Letter cannot address, since the inquirer hadn't described those facts. It only explained the general legal framework.

Q: What items are given as examples of qualifying medical appliances?
A: 86 Ill. Adm. Code 130.311(e)(1) lists breast implants (for cancer-related or preventative removal), heart pacemakers, artificial limbs, dental prosthetics, crutches and orthopedic braces, dialysis machines (including the dialyzer), wheelchairs, mastectomy forms and bras, mobility scooters, and sleep apnea devices.

Q: What items are given as examples that do NOT qualify?
A: 86 Ill. Adm. Code 130.311(e)(5) says other medical tools, devices, and equipment such as x-ray machines, laboratory equipment, and surgical instruments do not qualify, because they don't directly substitute for a malfunctioning body part even though they may be used in patient treatment.

Q: If an item is taxed at the 1% rate, can a city or county add more tax on top?
A: Generally no — home-rule municipalities generally lack authority to tax 1%-rate items. But the Regional Transportation Authority and the Metro East Mass Transit District are exceptions and can add additional "transportation district taxes" on top of the 1% state rate in their respective counties.

Citations and references

• 35 ILCS 120/2-10 (Retailers' Occupation Tax rates: 1% on qualifying medical appliances vs. 6.25% general rate)
• 35 ILCS 120/14 (local taxes added on top of the state Retailers' Occupation Tax)
• 86 Ill. Adm. Code 130.311(e)(1) (definition of medical appliance and qualifying examples)
• 86 Ill. Adm. Code 130.311(e)(5) (exclusion for tools/devices/equipment that do not directly substitute for a body part)
• 65 ILCS 5/8-11-1 (Home Rule Municipal Retailers' Occupation Tax Act; home-rule units generally cannot tax 1%-rate items)
• 70 ILCS 3615/4.03(e) (Regional Transportation Authority tax on 1%-rate items)
• 70 ILCS 3610/5.01(b) (Metro East Mass Transit District tax on 1%-rate items)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2025.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2025/st25-0009-gil.pdf

Original ruling text

ST 25-0009-GIL

03/05/2025

MEDICAL APPLIANCES

A medical appliance is an item that directly substitutes for a malfunctioning part of
the human body. Products that qualify as medical appliances are taxed at a lower
State tax rate of 1% plus any applicable local taxes. 35 ILCS 120/2-10; 35 ILCS
120/14; 86 Ill. Adm. Code 130.311. (This is a GIL).
March 5, 2025
NAME
COMPANY
EMAIL
Dear NAME:
This letter is in response to your email dated January 13, 2025, in which you requested
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
https://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:
I just called in and was advised to email your team. We are authorized dealers
for Hyperbaric Oxygen Chambers and we do require a doctor’s
note/prescription for all HBOT sales. Since there is a doctor’s note needed
for this medical device would these sales qualify for the reduced tax rate of
1.75%? Or what tax rate for Illinois would I charge? Please advise, so I can
adjust our taxes accordingly for you.
DEPARTMENT’S RESPONSE:
Due to the necessity for very specific facts regarding the uses and functions of
hyperbaric oxygen chambers, your questions cannot be addressed in the context of a
General Information Letter. However, this letter will provide you with basic guidelines that
may be used to determine the taxability of the hyperbaric oxygen chambers under Illinois
law.

COMPANY
Page 2
March 5, 2025
Medical appliances are subject to 1% tax under the Retailers’ Occupation Tax Act.
35 ILCS 120/2-10. Tangible personal property that does not qualify for the low rate of tax
is taxed at the rate of 6.25% of the gross receipts from sales. 35 ILCS 120/2-10. This tax
is in addition to any applicable local taxes. 35 ILCS 120/14. Section 130.311 pertaining to
Drugs, Medicines, Medical Appliances and Grooming and Hygiene Products provides as
follows:
e)

Medical Appliances: A medical appliance is an item that is
used to directly substitute for a malfunctioning part of the human
body.
1)

For purposes of this Section, an item that becomes part of the
human body by substituting for any part of the body that is
lost or diminished because of congenital defects, trauma,
infection, tumors, or disease is considered a medical
appliance. Examples of medical appliances that will qualify
the product for the low rate of tax include, but are not limited
to:
A)

breast implants that restore breasts after removal
due to cancer or for preventative, medical reasons;
B)
heart pacemakers;
C)
artificial limbs;
D)
dental prosthetics;
E)
crutches and orthopedic braces;
F)
dialysis machines (including the dialyzer);
G)
wheelchairs;
H)
mastectomy forms and bras;
I)
mobility scooters; and
J)
sleep apnea devices.
86 Ill. Adm. Code 130.311(e)(1).
Please note that “other medical tools, devices, and equipment such as x-ray
machines, laboratory equipment, and surgical instruments that may be used in the
treatment of patients but that do not directly substitute for a malfunctioning part of the
human body do not qualify as medical appliances.” 86 Ill. Adm. Code 130.311(e)(5). The
determination of whether an item qualifies as a medical appliance is very fact dependent.
In this instance, the inquirer did not provide any facts, descriptions, or details regarding
functions and uses of hyperbaric oxygen chambers.

COMPANY
Page 3
March 5, 2025
Local governments generally do not have authority to impose tax on the sale of
tangible personal property taxed at the 1% rate under the Retailers’ Occupation Tax Act such
as medical appliances. See e.g., 65 ILCS 5/8-11-1 (Home Rule Municipal Retailers’
Occupation Tax Act). However, two local taxing jurisdictions, the Regional Transportation
Authority (“RTA”) and the Metro East Mass Transit District (“MED”), do have the authority to
impose additional tax on 1% rate items. See 70 ILCS 3615/4.03(e); 70 ILCS 3610/5.01(b).
The RTA tax rate in Cook County on sales of tangible personal property taxed at the
1% rate under the Retailers’ Occupation Tax Act is 1.25% and 1% for taxable sales of other
tangible personal property taxed at the 6.25% rate. The RTA tax rate in DuPage, Kane, Lake,
McHenry, and Will counties is 0.75% on all taxable sales of tangible personal property. 70
ILCS 3615/4.03(e). The MED tax rate is 0.75% on all tangible personal property sold in MED
locations in St. Clair County and 0.25% on all tangible personal property sold in MED
locations in Madison County. 70 ILCS 3610/5.01(b). For the sake of differentiating these
taxes from local taxes imposed by other jurisdictions, we will refer to them in this letter as
“transportation district taxes”.
If the items described in this letter are taxed at the rate of medical appliances, then
they are subject to the low rate of tax (1% State tax), plus any applicable transportation
district taxes. If this is not the case, the items in this letter are subject to the high rate of tax
(6.25% State tax), plus any local tax (e.g., Home Rule Municipal Retailers’ Occupation Tax),
including transportation district taxes, at the general merchandise rate.
I hope this information is helpful. If you require additional information, please visit
our website at https://tax.illinois.gov/ or contact the Department’s Taxpayer Information
Division at 800-732-8866.
Very truly yours,
Katarzyna Kowalska
Associate Counsel
KAK:sce