Do pneumatic compression devices sold to Illinois patients for treating lymphedema and chronic venous insufficiency qualify for Illinois's reduced 1% sales tax rate on medical appliances?

Plain-English summary

A law firm asked the Illinois Department of Revenue, on behalf of an out-of-state company, whether its pneumatic compression devices (PCDs) — wearable pump-driven sleeves used to treat lymphedema and chronic venous insufficiency — qualify for Illinois's reduced 1% sales tax rate on "medical appliances," instead of the general 6.25% rate. The company argued the devices are analogous to sleep apnea devices, which the regulations expressly list as medical appliances.

The Department responded with a General Information Letter rather than a binding Private Letter Ruling, and explicitly said it could not give a definitive answer to the company's specific question in this format. It restated the general legal standard: a medical appliance is an item that directly substitutes for a malfunctioning part of the human body, and qualifying items are taxed at 1% (state) plus applicable local taxes instead of 6.25%. Illustrative examples in the regulation include artificial limbs, pacemakers, dialysis machines, wheelchairs, and sleep apnea devices.

Notably, the Department pointed to its own prior letters — ST-96-0445-GIL and ST-96-0060-GIL — which held that sequential intermittent compression systems used to prevent blood clots or treat lymphedema generally do not qualify for the low rate. It also noted that "other medical tools, devices, and equipment" that merely treat patients without directly substituting for a malfunctioning body part do not qualify as medical appliances. The Department declined to say whether the company's specific PCDs are similar enough to sleep apnea devices to qualify, since a GIL cannot resolve item-specific taxability questions.

What this means for you

Sellers of pneumatic compression devices or similar equipment

If you sell PCDs (or comparable compression/DME products) to Illinois customers, don't assume the sleep-apnea-device analogy will carry the day. The Department's own prior letters treat sequential intermittent compression systems as generally not qualifying for the 1% rate, and this letter did not withdraw or overrule that guidance — it simply declined to apply it (or distinguish it) without a full review of the specific product.

Businesses seeking certainty on a specific product's tax rate

A GIL is not the tool for getting a definitive, binding answer on your specific product. If you need certainty, you must request a Private Letter Ruling (PLR) under 2 Ill. Adm. Code 1200.110, which requires following the Department's PLR procedures and will bind the Department as to your facts (but not other taxpayers).

Accountants and tax professionals

The controlling regulatory test is whether an item "directly substitutes for a malfunctioning part of the human body" (86 Ill. Adm. Code 130.311(e)). Items that merely treat or manage a condition without substituting for the malfunctioning part — such as "other medical tools, devices, and equipment" under 130.311(e)(5) — fall outside the low rate. Watch for the Department's continued reliance on its 1996 letters regarding compression systems even as the regulation's list of qualifying examples (including sleep apnea devices) has since expanded.

Common questions

Q: What tax rate applies to items that qualify as medical appliances in Illinois?
A: 1% state tax plus any applicable local taxes, instead of the general 6.25% Retailers' Occupation Tax rate, under 35 ILCS 120/2-10 and 35 ILCS 120/14.

Q: Did the Department decide whether the pneumatic compression devices at issue qualify for the reduced rate?
A: No. The Department said it could not give a definitive ruling on the specific product in the context of a General Information Letter, and it noted it would need to review the specific item and an explanation of its similarities to sleep apnea devices before it could provide guidance.

Q: Do sequential intermittent compression systems generally qualify for the low rate?
A: According to the Department's prior letters ST-96-0445-GIL and ST-96-0060-GIL, cited in this GIL, such systems (including those used for lymphedema or blood-clot prevention) generally do not qualify for the low rate.

Q: What is the legal test for a "medical appliance" under Illinois law?
A: An item that is used to directly substitute for a malfunctioning part of the human body, per 86 Ill. Adm. Code 130.311(e). Devices that merely aid in treatment without substituting for the malfunctioning part do not qualify.

Q: How is a GIL different from a Private Letter Ruling, and why does that matter here?
A: A PLR is binding on the Department for the specific taxpayer and facts presented; a GIL is not binding and only directs taxpayers to relevant regulations or other sources of information, per 2 Ill. Adm. Code 1200.120. Here, the taxpayer asked for a PLR but the Department decided the request warranted only a GIL, so no binding determination was made.

Citations and references

Statutes and rules:

• 35 ILCS 120/2-10 (medical appliances taxed at 1%; general rate of 6.25%)
• 35 ILCS 120/14 (local taxes apply in addition to the state rate)
• 86 Ill. Adm. Code 130.311(e) (definition of medical appliance and illustrative examples)
• 86 Ill. Adm. Code 130.311(e)(5) (tools/devices that do not directly substitute for a malfunctioning body part do not qualify)
• 2 Ill. Adm. Code 1200.110 (Private Letter Ruling procedure)
• 2 Ill. Adm. Code 1200.120 (General Information Letter procedure)

Prior Department letters referenced:

• ST-96-0445-GIL (sequential intermittent compression systems for blood clots or lymphedema generally do not qualify for the low rate)
• ST-96-0060-GIL (components of sequential intermittent compression systems generally do not qualify for the low rate)

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/st25-0013-gil.pdf

Original ruling text

ST 25-0013-GIL

03/13/2025

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 13, 2025
NAME
COMPANY
ADDRESS
EMAIL
Dear NAME:
This letter is in response to your letter dated February 14, 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:
Please accept this memorandum as a request of a Private Letter Ruling
regarding the application of Illinois sales and use tax to the below described
fact pattern.
Background:
Our firm represents a Company located outside of your state who sells
medical devices to Illinois customers. We are requesting a Sales Tax Ruling on
the taxability of its pneumatic compression systems that are sold to patients
located in Illinois; specifically, whether these devices qualify for the reduced
rate for medical devices. Please consider the enclosed information when you
determine your ruling on the taxability of these products.

COMPANY
Page 2
March 13, 2025
The Company’s pneumatic compression devices (PCDs) are used to manage
and treat both lymphedema and chronic venous insufficiency by reducing
swelling and promoting lymph fluid movement. The devices consist of a
sleeve or garment that fits over the affected limb and is connected to a pump.
The pump inflates and deflates the chambers within the wearable component
in a sequential manner, applying pressure to the limb to help move lymph fluid
towards healthy lymph nodes. Studies have demonstrated the clinical
benefits of enhancing lymphedema treatment with PCD treatment to reduce
limb volume and increase quality of life.
These devices are sold upon prescription by a registered physician to the
individual patient. They are medically necessary as a treatment plan for
patients suffering from these conditions.
We have reviewed applicable Illinois tax code and previously issued General
Information Letters. It is our belief that these devices would qualify as a
medical appliance eligible for the reduced rate as described by the Ill. Admin.
Code 130.311(e). As defined, a medical appliance is an item that is used to
directly substitute for a malfunctioning part of the human body. Lymphedema
is a conduction resulting from a blockage in the lymphatic system, which is
responsible for draining excess fluid and proteins from tissues and returning
them to the bloodstream. In those suffering from lymphedema, the lymphatic
system is malfunctioning. The use of PCDs substitutes the purpose of the
damaged lymph nodes by promoting circulation in the body.
The use of these devices can be correlated to sleep apnea devices. One would
not use the device without a diagnosed medical condition and prescription
from a licensed doctor. There is a wearable component connected to a base
that controls the delivery of the medical treatment. Sleep apnea devices are
expressly defined within the code to qualify for the reduced rate of tax.
Because of the similarities, we also believe the PCDs would be eligible for the
reduced sales tax rate.
There have been previously issued rulings that opine on similar devices:
Illinois Dept. of Rev. General Information Letter ST 96-0445-GIL and Illinois
Dept. of Rev. General Information Letter ST 96-0060-GIL. The tax treatment
expressed in these letters determined that the sequential intermittent
compression systems did not qualify for the low rate of tax. Both opinions
were issued in 1996 before the addition of ‘sleep apnea devices’ as an
example of medical appliances qualifying for the low rate in Ill. Admin. Code
130.311. Given the passage of time and changes in regulations or
interpretations, we are requesting an updated opinion on this matter.

COMPANY
Page 3
March 13, 2025
Issue:
Do the Company’s sales of PCDs qualify for the state’s medical device
reduced rate?
We appreciate your attention to this request. If you could respond to us at your
earliest convenience as to the taxability of our client’s products. If you have
any questions regarding this matter, please contact the undersigned at
PHONE or at EMAIL.
DEPARTMENT’S RESPONSE:
The Department’s regulation “Public Information, Rulemaking and Organization”
provides that “[w]hether to issue a private letter ruling in response to a letter ruling request
is within the discretion of the Department. The Department will respond to all requests for
private letter rulings either by issuance of a ruling or by a letter explaining that the request
for ruling will not be honored.” 2 Ill. Adm. Code 1200.110(a)(4). The Department has
reviewed your request and has decided to issue a general information letter. Please note
that the Department cannot give a definitive ruling to your specific questions in the context
of a General Information Letter.
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

COMPANY
Page 4
March 13, 2025
B)
C)
D)
E)
F)
G)
H)
I)
J)

due to cancer or for preventative, medical reasons;
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.

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
Department has specifically stated in ST-96-0445-GIL that “[s]equential intermittent
compression systems such as those used for the prevention of blood clots or to treat
lymphedema generally do not qualify for the low rate of tax.”
Likewise, in ST-96-0060-GIL, the Department stated that “generally speaking, components
of a sequential intermittent compression system . . . do not qualify for the low rate of tax.”
In your letter you state that “[s]leep apnea devices are expressly defined within the code to
qualify for the reduced rate of tax. Because of the similarities, we also believe the PCDs
would be eligible for the reduced sales tax rate.” However, without reviewing the specific
item at issue along with an explanation of similarities between that item and sleep apnea
devices, we cannot provide you guidance concerning the whether the item qualifies as a
medical appliance.
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