New York Advisory Opinion TSB-A-95(34)S: Is the charge for a 24/7 personal emergency response ("medical alert") system -- a wearable pendant and sending unit that lets customers summon help -- exempt from New York sales tax?

Plain-English summary

MSS Electronics Inc. is the provider of "LifeFone," a 24-hour, 7-day-a-week personal emergency response system that lets customers summon help any time of day or night. Customers provide Petitioner with certain information about themselves to be used in the event of a medical emergency, and in exchange Petitioner supplies an electronic sending unit plus a wearable pendant (worn on the wrist or around the neck) -- the alarm can be triggered by pressing a button on either the sending unit or the pendant.

The Department ruled that, provided Petitioner's alarm system is specifically designed to respond to medical emergencies as described, it qualifies for the exemption in Tax Law § 1115(r), which specifically exempts receipts from the sale and use of "alarm call services designed specifically to respond to medical emergencies" -- services that would otherwise be taxable as protective/detective services under Tax Law § 1105(c)(8), or subject to compensating use tax under § 1110(a)(C). Because this exemption exists as a distinct, purpose-built carve-out separate from the general protective/alarm-services tax, LifeFone-type medical alert services escape New York sales and compensating use tax entirely.

What this means for you

Medical alert and personal emergency response system providers

If your alarm service is specifically designed and marketed to respond to MEDICAL emergencies -- as opposed to general burglary, fire, or property-protection alarm services -- your charges qualify for the dedicated § 1115(r) exemption, distinct from and broader than any exemption available to general security alarm services.

General security/alarm companies considering adding a medical-response option

The exemption is narrowly tied to services "designed specifically" for medical emergencies -- a general-purpose alarm or monitoring service that also happens to be usable in a medical emergency, without being specifically designed for that purpose, likely wouldn't qualify under this reasoning.

Common questions

Q: Why does a specific carve-out exist for medical alarm services when general alarm/protective services are taxable?
A: Tax Law § 1105(c)(8) taxes protective and detective services broadly (including alarm systems protecting against burglary, fire, and property damage), but the legislature created § 1115(r) as a distinct exemption specifically for medical-emergency alarm call services -- reflecting a policy choice to keep this category of health-and-safety service untaxed, separate from general security services.

Q: Does the exemption cover both the equipment (pendant, sending unit) and the monitoring service?
A: The ruling addresses "the charge for its medical alarm alert service" broadly and doesn't separately break out equipment versus monitoring charges -- the opinion treats the LifeFone offering as a single exempt alarm call service as described by Petitioner.

Q: What would disqualify an alarm service from this exemption?
A: Based on the statute's language, a service not "designed specifically" to respond to medical emergencies -- for instance, a general home-security or fire-alarm service without a dedicated medical-emergency response function -- would fall outside § 1115(r) and remain subject to the general protective/detective services tax.

Citations and references

Statutes and regulations:

• Tax Law § 1115(r) (medical alarm call service exemption)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1995.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a95_34s.pdf

Original ruling text

New York State Department of Taxation and Finance
TSB-A-95 (34)S
Sales Tax
August 22, 1994

Taxpayer Services Division
Technical Services Bureau

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S950426A

On April 26, 1995, a Petition for Advisory Opinion was received from MSS Electronics Inc.,
220 Ferris Ave., White Plains, New York 10603.
The issue raised by Petitioner, MSS Electronics Inc., is whether the charge for its medical
alarm alert service is subject to sales tax.
Petitioner is a provider of a medical alarm system called "LifeFone". Petitioner's alarm
system is a 24 hour, 7 day a week, personal emergency response system which enables Petitioner's
customers to summon help any time of the day or night. Petitioner's customers provide it with
certain information about themselves which is to be used in case of a medical emergency. Petitioner
provides its customers with an electronic sending unit and a pendant to be worn on the wrist or
around the neck. The alarm may be activated by pressing a button on either the sending unit or the
pendant.
Section 1115(r) of the Tax Law grants an exemption from the sales tax for "[R]eceipts from
the sale of alarm call services designed specifically to respond to medical emergencies and the use
of such services, otherwise taxable under paragraph eight of subdivision (c) of section eleven
hundred five or under clause (C) of subdivision (a) of section eleven hundred ten of this article, ...."
(Emphasis supplied)
Provided Petitioner's alarm service, as heretofore described, is specifically designed for
medical emergencies, it qualifies for the exemption from sales and compensating use taxes provided
by Section 1115(r) of the Tax Law.

DATED: August 22, 1994

/s/
PAUL B. COBURN
Deputy Director
Taxpayer Services Division

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.