Are a medical practice's purchases of dermal fillers (Radiesse, Restylane) subject to sales tax?

Plain-English summary

The petitioner runs a licensed plastic and reconstructive surgery practice and uses injectable dermal fillers -- Radiesse (calcium hydroxylapatite gel) and Restylane (hyaluronic acid gel) -- which come in sterile single-use syringes that only licensed practices may buy and physicians may administer. Injected to correct facial folds, lipoatrophy, and similar conditions, they remain temporarily and are absorbed by the body over roughly six months (Restylane) to a year (Radiesse). The practice asked whether its purchases of these fillers are subject to sales tax.

The Office of Counsel concluded the fillers are taxable medical supplies.

• Not exempt prosthetic aids/artificial devices. A prosthetic aid or artificial device (Tax Law 1115(a)(4); 20 NYCRR 528.5) permanently replaces a missing/malfunctioning body part. Because the fillers are absorbed rather than becoming a permanent replacement, they don't qualify (Alcon Surgical).
• Not exempt drugs/medicines. They aren't exempt drugs or medicines under 1115(a)(3).
• Taxable medical/surgical supplies. Given all their approved uses (cosmetic correction, defect augmentation, surgical marking), they're supply items like sutures, ophthalmic shields, bone-void fillers, and implanted cavity fillers (Dental Society, Orthovita) -- taxable when purchased for use in performing medical services for compensation. The 1115(a)(3) exemption is denied for supplies used in providing services for compensation, so the practice owes tax on its purchases.

What this means for you

Medical, cosmetic, and surgical practices

Items you inject, implant, or consume while delivering a paid procedure are generally taxable supplies -- even FDA-regulated, prescription-only products. The key tests: a true prosthetic/artificial device is a permanent replacement (absorbable products fail this), and the medical-supply exemption is switched off when you buy supplies to perform services for compensation. Budget sales/use tax on your dermal-filler and similar supply purchases.

Distributors of injectables and implants

Expect your sales to practitioners to be taxable; the practitioner is the end user consuming the supply in a paid service, not a reseller.

Common questions

Q: Radiesse is FDA-regulated -- isn't it an exempt device or drug?
A: No. It's absorbed by the body, so it isn't an exempt prosthetic aid/artificial device, and it isn't an exempt drug or medicine. It's a taxable medical supply.

Q: We use it to treat patients -- doesn't the medical exemption apply?
A: No. The 1115(a)(3) exemption doesn't apply to supplies bought for use in providing medical services for compensation.

Citations and references

• Tax Law section 1105(a) (sales tax on tangible personal property)
• Tax Law section 1115(a)(3) (drugs/medicines and medical equipment/supplies; exemption denied for supplies used in providing services for compensation and for cosmetics)
• Tax Law section 1115(a)(4) (prosthetic aids and artificial devices)
• 20 NYCRR 528.5 (prosthetic aids/artificial devices defined)
• Dental Society v NYS Tax Commission, 110 AD2d 988 (implanted cavity fillers taxable supplies)
• TSB-A-02(14)S (Orthovita; injectable bone filler is a taxable surgical supply)
• TSB-A-92(43)S (Alcon Surgical) and TSB-A-91(54)S (Alcon Laboratories; sutures/shields)
• TSB-A-92(77)S (John O. Butler; absorbable tissue regeneration device)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2009.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a09_47s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-09(47)S
Sales Tax
October 14, 2009

Office of Counsel
Advisory Opinion Unit
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S081231B

Petitioner name redacted, asks whether its purchases of dermal fillers used by Petitioner in the
performance of surgical procedures are subject to sales tax.
We conclude that dermal fillers (“injectable implants”) are supplies used in the performance of
medical surgery procedures and are thus subject to sales tax when purchased for use by persons performing
medical services for compensation.
Facts
Petitioner operates a licensed medical practice performing plastic and reconstructive surgery.
Due to the effects of disease, injury or age, the skin and related soft tissue of individuals suffer and
degenerate. Pursuant to FDA approved procedures, dermal filler is injected into the patient to replace,
augment, or otherwise restore the function of various types of soft tissue.
The injectable dermal fillers/ implants used by Petitioner are Radiesse© (calcium hydroxylapatiate
suspended in a sodium carboxymethyllaluclose gel carrier) and Restylane© (a hyaluronic acid gel). These
products come ready-mixed and prepared in sterile, single-use syringes. They may only be purchased by
licensed medical practices and administered by physicians.
In the United States, Radiesse© is FDA approved for the correction of moderate to severe facial
folds, such as nasolabial folds (the wrinkle lines from the sides of the nose to the corners of the mouth), and
for the correction of the signs of facial lipoatrophy (the technical term for the loss of subcutaneous fat in the
face) in HIV patients. There are also FDA clearances for use of Radiesse© in respect of oral/maxillofacial
defects, vocal fold insufficiency and radiographic tissue marking. The FDA order (submitted as Exhibit B of
the Petition) approving the use of Radiesse© in facial lipoatrophy refers to Radiesse© as a device.
Radiesse© is described as being suitable for the treatment of facial lines and wrinkles around the
nose and mouth. These lines typically follow one of two patterns, running from the nose to the corners of the
upper lip (nasolabial folds) or pointing down from the corners of the mouth to the chin (marionette lines).
Smile lines are the common facial lines and wrinkles that appear on the cheeks. See radiesseusa.com
website.
Facial lipoatrophy can result in sunken cheeks, hollow eyes, and facial indentations. Radiesse©
dermal filler is a treatment option for patients with HIV-associated facial lipoatrophy.
The FDA also permits Radiesse© to be used:
•

to fill and or augment periodontal defects, ridge augmentation, extraction sites, craniofacial
augmentations (craniofacial defects caused by trauma or birth defects), sinus lifts and cystic
defects (oral/maxillofacial defects)

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Sales Tax
October 14, 2009

•

to assist in the correction of bowing or paralysis of the vocal cords by support via injection of the
vocal fold and its supporting structure (vocal fold augmentation); and

•

to mark the precise location of internal sites for surgery and therapeutic treatments (radiographic
tissue marking)

Restylane© is also an FDA approved dermal filler used for restoring volume and fullness to the skin
in the correction of moderate to severe facial wrinkles and folds, such as nasolabial folds.
Both Restylane© and Radiesse© remain in the patient’s body temporarily as a separate and
identifiable material. Petitioner states, that while in the body, it restores the functioning of an organ (skin
and related tissue) that is otherwise permanently inoperative or malfunctioning. Over time, the body will
absorb the injected material. The absorption process for Restylane© is approximately six months (or longer)
and for Radiesse © one year (or longer). After absorption, the skin and related tissue return to their previous
state until the procedure is repeated and new material is injected into the patient.
Analysis
The Tax Law provides exemptions from sales and use tax for drugs and medicines intended for use
in the cure, mitigation, treatment or prevention of illness or disease in humans; and for medical equipment
(including component parts thereof) and supplies required for use in the cure, mitigation, treatment or
prevention of illness or disease, or to correct or alleviate physical incapacity. However, the exemption is not
provided for medical equipment and supplies purchased at retail for use in providing medical and similar
services for compensation or for cosmetic products notwithstanding the presence of medicinal ingredients in
the cosmetic product. (See Tax Law Section 1115(a)(3).)
The Tax Law also provides an exemption for prosthetic aids, artificial devices and component parts
thereof purchased to correct or alleviate physical incapacity in humans. (See Tax Law Section 1115(a)(4).
The Sales and Use Tax Regulations describe prosthetic aids and artificial devices, and component parts
thereof, purchased to correct or alleviate physical incapacity in human beings as property that either
completely or partially replaces a missing body part or the function of a permanently inoperative or
permanently malfunctioning body part and that is primarily and customarily used for such purposes. Property
that is generally useful in the absence of illness, injury or physical incapacity does not qualify for the
prosthetic aid, artificial device, etc. exemption. (See Regulation Section 528.5)
The Radiesse and Restylane products are not exempt as prosthetic aids or artificial devices under Tax
Law Section 1115(a)(4). The fact that these dermal fillers are absorbed by the body rather than becoming a
replacement for a malfunctioning body part indicates that they are not prosthetic devices. (See Alcon Surgical
Inc., Adv Op Comm Tx & Fin, May 27,1992 TSB-A-92(43)S.) Moreover, these products are not exempt
drugs or medicines pursuant to Tax Law section 1115(a)(3).
These products, in view of all their approved uses (cosmetic procedures, surgical marker, defect
augmentations, etc.), are medical/surgical supply items that can be used to correct or alleviate physical
incapacity, similar to sutures (Alcon Laboratories, Inc., Adv Op Comm Tx & Fin, August 2,1991, TSB-A91(54)S), ophthalmic shields (Alcan Surgical Inc., supra), synthetic bone void fillers (Orthovita, Inc. Adv
Op Comm Tx & Fin, June 25, 2002,TSB-A-02(14)S), absorbable tissue regeneration device (John O. Butler
Company, Adv Op Comm Tx & Fin, November 4,1992, TSB-A-92(77)S) and other items used and
consumed by medical practitioners in performing medical procedures. See also Dental Society of the State of
New York v NYS Tax Commission, 110 A.D. 2d 988 (1985) which held that cavity filling materials implanted

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Sales Tax
October 14, 2009

in patient’s teeth were taxable supply items. As medical supply items, these products are subject to sales tax
when purchased for use in the performance of medical and similar services for compensation.

DATED: October 14, 2009

NOTE:

/S/
Jonathan Pessen
Director of Advisory Opinions
Office of Counsel

An Advisory Opinion is issued at the request of a person or entity. It is
limited to the facts set forth therein and is binding on the Department only
with respect to the person or entity to whom it is issued and only if the person
or entity fully and accurately describes all relevant facts. An Advisory
Opinion is based on the law, regulations, and Department policies in effect as
of the date the Opinion is issued or for the specific time period at issue in the
Opinion.