Were threshold ramps and removable van ramps sold to physically disabled customers exempt from Kansas sales tax with a prescription?

Plain-English summary

A seller asked whether threshold ramps and van ramps sold for physically disabled users qualified for Kansas's prescribed prosthetic-device or mobility-enhancing-equipment exemption.

The Department said ordinary purchases by an individual or private insurance company were taxable even with a prescription:

• A threshold ramp did not qualify because it became a fixture to real property when installed.
• A van ramp that was not permanently attached to the vehicle was also subject to tax.

The payer changed one result. The letter treated Medicare and Medicaid claims as direct purchases by the federal government, so those purchases were exempt whether or not there was a prescription order. The applicable sales-tax rate was sourced to the consumer's ship-to address.

What this means for you

Accessibility-equipment sellers

Under this 2009 opinion, do not accept a prescription alone as support for exempt threshold or removable van ramps. Determine the product's attachment, purchaser, payer, and ship-to address.

Individuals and private insurers

The Department said you owed tax on the two ramp types described, with or without a prescription.

Medicare and Medicaid transactions

The letter treated these as direct federal purchases and exempted them regardless of prescription. Current program purchasing and reimbursement structures should be checked before applying that conclusion today.

Common questions

Q: Was a threshold ramp exempt mobility-enhancing equipment?
A: No. The Department said installation made it a fixture to real property, so the exemption did not apply.

Q: Was a removable van ramp exempt?
A: No. The letter says a van ramp not permanently attached to the vehicle was taxable.

Q: Did a doctor's prescription make either ramp exempt?
A: No for purchases by an individual or private insurance company.

Q: Were Medicare or Medicaid purchases taxable?
A: The letter treated them as exempt direct federal-government purchases, with or without a prescription.

Q: Which local rate applied?
A: The rate based on the consumer's ship-to address.

Citations and references

• K.S.A. 79-3606(r) — prescribed prosthetic-device and mobility-enhancing-equipment exemption and definitions quoted in the letter

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: O-2009-013

Original ruling text

Opinion Letter

Body:

Office of Policy & Research

September 16, 2009

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Dear Ms. TTTTT:

We wish to acknowledge receipt of your letter dated April 30, 2009, regarding the application of Kansas Retailers’ Sales tax.

K.S.A. 79-3606(r) exempts from sales tax: “all sales of prosthetic devices and mobility enhancing equipment prescribed in writing by a person licensed to practice the healing arts, dentistry or optometry, and in addition to such sales, all sales of hearing aids, as defined by subsection (c) of K.S.A. 74-5807, and amendments thereto, and repair and replacement parts therefor, including batteries, by a person licensed in the practice of dispensing and fitting hearing aids pursuant to the provisions of K.S.A. 74-5808, and amendments thereto. For the purposes of this subsection: (1) "Mobility enhancing equipment" means equipment including repair and replacement parts to same, but does not include durable medical equipment, which is primarily and customarily used to provide or increase the ability to move from one place to another and which is appropriate for use either in a home or a motor vehicle; is not generally used by persons with normal mobility; and does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer; and (2) "prosthetic device" means a replacement, corrective or supportive device including repair and replacement parts for same worn on or in the body to artificially replace a missing portion of the body, prevent or correct physical deformity or malfunction or support a weak or deformed portion of the body. . .”

Medicare/Medicaid claims are deemed to be direct purchases by the federal government, and therefore would be exempt from Kansas sales tax(es), whether the purchase is with or without a prescription order. However, if a private insurance company or an individual purchases the van or threshold ramps, with or without a prescription order, they would be obligated to pay any applicable sales tax(es).

In closing, the sale of the threshold ramps would not qualify for a sales tax exemption, since the threshold ramp, which when installed becomes a fixture to real property. Further, since the van ramps are not permanently attached to a vehicle, they would likewise be subject to sales tax(es) in this state. The rate of sales tax is based upon the consumers ship-to address.

If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 09/29/2009 Date Modified: 09/29/2009

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