Are sales of low-vision equipment (magnifiers, telescopes, filters, video magnifiers) to and by vision care professionals subject to NY sales tax?

Plain-English summary

A manufacturer of low-vision equipment and an optometric association asked whether sales of the equipment -- both to vision care professionals and by those professionals to retail customers -- are taxable. The products are hand-held, stand, and spectacle magnifiers, video magnifiers and closed-circuit TVs, monocular telescopes, and absorptive filters, all designed for people whose vision is severely impaired.

The Office of Counsel concluded the equipment is exempt when sold for low-vision use.

• They're exempt artificial devices/prosthetic aids (Tax Law 1115(a)(4)). This exemption covers prosthetic aids, eyeglasses, and artificial devices purchased to alleviate physical incapacity. To qualify, an item must replace (wholly or partly) a missing body part or the function of a malfunctioning body part, be primarily and customarily used for that, and not be generally useful in the absence of illness, injury, or incapacity (20 NYCRR 528.5).
• Why these qualify. Like eyeglasses, the magnifiers, telescopes, and filters let low-vision individuals read and see. They feature very high magnification (2.7x-12.5x) and illumination -- far beyond ordinary magnifying glasses (1.5x-1.8x, no illumination) -- and the spectacle telescopes would actually impair normal sight. The absorptive filters enhance visual acuity (color contrast), unlike sunglasses, whose purpose is UV protection. The video magnifiers/CCTVs match products already held exempt in Pulse Data Humanware (TSB-A-05(14)S). So they replace the function of malfunctioning eyes and aren't generally useful to the normally sighted.
• Exempt on both legs of the sale. Because they're exempt 1115(a)(4) property, they're exempt when sold to the vision care professionals and exempt when sold by those professionals to their low-vision customers.
• The commercial-use caveat. The manufacturer's own website shows some of these products have commercial applications unrelated to low vision -- e.g., sales by its commercial sales division to jewelers, coin and stamp collectors, and specialized manufacturing. Those sales are not exempt under 1115(a)(4).

What this means for you

Sellers of magnification/vision devices and optometrists

The exemption follows the device's medical purpose and design, not just its category. High-magnification, illuminated, low-distortion aids designed for the visually impaired -- and not practical for normal sight -- are exempt prosthetic/artificial devices, exempt all the way down the chain (manufacturer -> optometrist -> patient). But identical hardware marketed for commercial inspection or hobby use (jewelers, collectors, manufacturing) is taxable. Track the end use/market channel: the same SKU can be exempt or taxable depending on whether it's sold for low vision.

Common questions

Q: Are low-vision magnifiers taxable when I (an optometrist) sell them to patients? A: No. They're exempt artificial devices under 1115(a)(4), exempt both when you buy them and when you resell them to low-vision customers.

Q: We also sell the same magnifiers to jewelers and collectors. Exempt? A: No. Sales for commercial uses unrelated to low vision aren't covered by 1115(a)(4) and are taxable.

Q: Why aren't ordinary magnifying glasses or sunglasses exempt? A: They're generally useful to people without any visual impairment, so they don't meet the 528.5 test. Low-vision devices are far more powerful and not practical for normal sight.

Citations and references

• Tax Law section 1115(a)(4) (prosthetic aids, eyeglasses, artificial devices exemption)
• Tax Law section 1105(a) (sales of tangible personal property)
• Tax Law section 1110 (compensating use tax)
• 20 NYCRR 528.5 (prosthetic aids/artificial devices; Example 13)
• TSB-A-05(14)S (Pulse Data Humanware, Inc.)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2010.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a10_22s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-10(22)S
Sales Tax
May 19, 2010

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

PETITION NO. S100302C

Petitioners name and address readacted and name and address redacted (the Association) ask whether sales of low vision equipment sold to vision care professionals including optometrists, and sales of the low vision equipment by optometrists to retail customers, are subject to the sales tax. We conclude that the low vision equipment sold by name redacted qualifies for the exemptions from sales tax provided in Tax Law Section 1115(a)(4) and the receipts from the sale of the equipment are exempt when sold to and by the vision care professionals. Facts Name redacted is a manufacturer of magnifiers, telescopes, sun filters, binoculars, and electronic reading devices. The Association works with local affiliated optometric associations throughout New York State to enhance the vision care and health of the public and promote the art and science of optometry. Petitioners ask whether various products sold for use by individuals who suffer from low vision are subject to the sales tax imposed pursuant to section 1105(a) of the Tax Law. The products are hand held magnifiers, stand magnifiers, spectacle magnifiers, video magnifiers and closed circuit televisions, hand-held monocular telescopes, and absorptive filters. Petitioners state that the magnifiers and telescopes enable persons whose vision has been severely impaired as a result of natural degradation, illness, or injury, to see. The magnifiers are designed for persons with low-vision and offered in designs that illuminate the object to be viewed and are of high magnification (2.7x-12.5x) and low distortion. Name redacted may sell some of the magnifiers in sets that provide different magnification strengths. The products are unlike traditional magnifying glasses which offer substantially lower magnification (1.5x-1.8x) and no illumination. Petitioners note that, although the low vision devices (magnifiers) could be used by persons with normal eyesight or only minimal impairment, the features, especially the significantly greater magnification, are far in excess of what the average person would need or find practical. Petitioners similarly note that the telescopes designed to be affixed to eyeglasses provide significant magnification (2.2x) and would likely impair the vision of normally sighted persons were they to use these items. Petitioners claim that the absorptive filters, while similar to sunglasses in design, have as their primary purpose the enhancement of a person’s visual acuity. In contrast, sunglasses are designed for the primary purpose of protecting the eye from damaging ultraviolet rays and bright light. Petitioners state that the absorptive filters are necessary to improve the visual acuity of persons with low vision by enhancing color contrasts and are likewise not generally useful for persons who do not have low vision. Name redacted video magnifiers and closed circuit television products perform the same functions as the magnifiers and telescopes using enhanced technology. A camera is used to project the image onto a screen in lieu of merely viewing images through a lens.

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TSB-A-10(22)S
Sales Tax
May 19, 2010

The distant image can be captured and the magnification of the image can be changed and displayed in larger size onscreen without having to move closer to the object or to switch to a different power/sized lens. Thus, for example, images from a faraway chalk board can be projected onto the visually impaired person’s computer video terminal in electronically enhanced magnification, filtration, and focus so that the distant material written on the chalk board is legible to the impaired person. Analysis Tax Law section 1115(a)(4) exempts receipts from the retail sale of prosthetic aids, hearing aids, eyeglasses, and artificial devices and component parts thereof purchased to alleviate physical incapacity in human beings from the sales and use tax imposed on the sale or use of tangible personal property pursuant to sections 1105(a) and 1110 of the Tax Law. The sales and use tax regulations provide that, in order to qualify as a prosthetic aid, hearing aid, eyeglasses or an artificial device, the property must either completely or partially replace a missing body part or the function of a permanently inoperative or permanently malfunctioning body part and must be primarily and customarily used for such purposes and not be generally useful in the absence of illness, injury, or physical incapacity. (See 20 NYCRR 528.5) In contrast to eyeglasses and artificial devices used to correct deficient vision, the regulations note that nonprescription eyeglasses, nonprescription sunglasses, and non-corrective contact lenses are not exempt from tax. (See 20 NYCRR 528.5 Example 13.) Like eyeglasses, Name redacted magnifiers, telescopes, and filters allow individuals with limited vision to read printed materials. In Pulse Data Humanware, Inc., Adv Op Comm Tx & Fin, April 27, 2005, TSB-A-05(14)S, products similar in design and purpose to Name redacted video magnifiers and closed circuit televisions were determined to be qualifying artificial devices and prostheses that replaced the function of inoperative or malfunctioning eyes. Name redacted hand held magnifiers, stand magnifiers, spectacle magnifiers, video magnifiers and closed circuit televisions, hand-held monocular telescopes, and absorptive filters are artificial devices used to improve the sight of persons having low vision. Petitioners state that the devices are not generally useful to persons who are not afflicted with low vision, and that the equipment is used to replace the function of malfunctioning human eyes (i.e., the devices mitigate the effects of a person’s low visual acuity). Accordingly, Name redacted products, when sold for use by persons who have low vision, qualify for the exemption from sales tax provided in section 1115(a)(4) of the Tax Law. As property qualifying as exempt artificial devices and prosthetic aids pursuant to Tax Law section 1115(a)(4), these products are exempt from tax when sold to vision care professionals and are likewise exempt when sold by the vision care professionals to their customers. Though generally not useful for persons with normal vision, we note that name redacted (as described on its Web site) has identified certain circumstances and limited situations where its products may have commercial application in the absence of low vision. Thus, for instance, its commercial sales division touts the

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TSB-A-10(22)S
Sales Tax
May 19, 2010

use of certain of its magnifiers and other products by jewelers, and coin and stamp collectors, and in specialized manufacturing processes. Sales of those products by the commercial sales department would not be exempt from tax under section 1115(a)(4) of the Tax Law.

DATED: May 19, 2010

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.