Which items did SC Revenue Ruling 90-1 classify as exempt dental prosthetic devices when purchased by a dentist?

Plain-English summary

South Carolina Revenue Ruling 90-1 defined a dental prosthetic device as an artificial device or part that replaces a missing body part. A device that only straightened or supported a body part did not qualify.

The ruling exempted these items when purchased by a dentist:

• crowns;
• inlays;
• bridges;
• veneers;
• dentures;
• posts and cores;
• implants; and
• maxillofacial prosthetics used to replace part of the maxilla, mandible, or face.

All other items in the ruling's exhibit were nonexempt. Materials bought by a dentist to construct a prosthetic device also did not qualify because they were not themselves dental prosthetic devices at the time of purchase.

The transaction the ruling tested

The ruling treated the dentist—not the patient—as the consumer in the retail transaction. A patient's basic purpose was obtaining professional dental services, and placing a device in the patient's mouth did not make the dentist a retailer of that device.

Eligibility therefore had to be determined when the dentist purchased the item. The dentist had to bring the purchase squarely within the exemption, which the Commission strictly construed.

Replacement versus support or straightening

Regulation 117-174.257 defined a prosthetic device as an artificial device replacing a missing body part. The ruling also cited an Attorney General opinion distinguishing a prosthesis from an orthotic device that merely supported or straightened.

That distinction excluded braces and other straightening apparatus. A maxillofacial item qualified only when it replaced part of the maxilla, mandible, or face; use for straightening, support, or another nonreplacement purpose did not qualify.

Exempt replacement devices

The ruling's exempt list covered:

• restorations replacing lost tooth structure, such as crowns, inlays, veneers, posts, and cores;
• bridges, dentures, and implants replacing missing teeth or associated tissues; and
• qualifying maxillofacial replacements.

The item's use and condition at purchase controlled. The ruling did not extend the exemption to materials that might later be incorporated into one of those devices.

Nonexempt exhibit items

The ruling said every other item in Exhibit A was nonexempt. The exhibit included:

• amalgam, composite filling materials, and sealants;
• space maintainers, orthodontic wire, bands, and pins;
• gutta-percha and calcium-hydroxide materials;
• zinc-oxide-eugenol, acrylic, porcelain, and prosthetic metal materials; and
• radiation carriers, radiation shields, docking devices, and fluoride applicators.

Some of those materials could be used to fabricate an exempt final device, but they were not prosthetic devices when the dentist bought them.

What this means for you

Dentists and purchasing teams

Classify the item at the point of purchase. Future incorporation into a crown, denture, bridge, or other prosthesis did not make a raw material exempt under RR 90-1.

Dental-product sellers

Document whether the sold item itself replaces missing anatomy or merely supports, straightens, protects, fills, or assists another procedure.

Maxillofacial products

Identify the actual use. The same general product category could qualify when replacing missing facial anatomy and fail when used only for support or another purpose.

Common questions

Q: Were crowns and bridges exempt?

A: Yes. The ruling treated both as replacement devices.

Q: Were braces exempt?

A: No. Braces straighten or support rather than replace a missing body part.

Q: Were implants exempt?

A: Yes. The ruling included implants placed to replace missing teeth and support prosthetic devices.

Q: Could a dentist buy acrylic or porcelain tax-free because it would become a denture or crown?

A: No. The material was not itself a prosthetic device when purchased.

Q: Did every maxillofacial device qualify?

A: No. It had to replace part of the maxilla, mandible, or face.

Citations and references

• S.C. Code Ann. § 12-35-550(31) — historical dental-prosthetic exemption effective July 1, 1989
• S.C. Reg. 117-174.257 — historical prosthetic-device definition
• South Carolina Attorney General Opinion 77-9 — prosthetic versus orthotic distinction
• SC Revenue Ruling 91-19 — later dental-laboratory application of RR 90-1's definition: https://dor.sc.gov/sites/dor/files/policies/RR91-19.pdf

Source

• Landing page: https://dor.sc.gov/advisory-opinion-search
• Original PDF: https://dor.sc.gov/sites/dor/files/policies/RR90-1.pdf

Original ruling text

SC REVENUE RULING #90-1

SUBJECT:

Dental Prosthetic Devices
(Sales & Use)

EFFECTIVE DATE:

Applies to all periods open under statute.

SUPERSEDES:

All previous documents and any oral directives in conflict herewith.

REFERENCE:

S.C. Code Ann. Section 12-35-550(31) (Amended July 1, 1989)

AUTHORITY:

S.C. Code Ann. Section 12-3-170 (1976)
SC Revenue Procedure #87-3

SCOPE:

A Revenue Ruling is the Commission's official interpretation of how tax
law is to be applied to a specific set of facts. A Revenue Ruling is
public information and remains a permanent document until superseded
by a Regulation or is rescinded by a subsequent Revenue Ruling.

Questions:

1. For the purposes of Code Section 12-35-550(31), what is the definition of the phrase "dental
   prosthetic device"?
2. Of those items listed in Exhibit "A", which, if any, are "dental prosthetic devices"?
   Facts:
   Code Section 12-35-550(31) was amended as of July 1, 1989 to exempt from the tax the:
   Gross proceeds from the sale of medicine and prosthetic devices sold by prescription;
   hypodermic needles, insulin, alcohol swabs, and blood sugar testing strips sold to
   diabetics under the authorization and direction of a physician; and dental prosthetic
   devices (emphasis added).
   Prior to July 1, 1989, sales of dental prosthetic devices were exempt only if sold by prescription.

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Discussion:
While a Commission Decision dated May 31,1989 concerned the sale of dental prosthetic
devices to a dentist prior to the amendment of Code Section 12-35-550(31), it does provide
insight into the issues in question. In the Decision, the Commission held:
While there is no significant dispute as to whether the purchases were retail purchases
....., we address it here for clarity. It is apparent that a purchase is the result of a retail
transaction when the sale is to a party who is the consumer of the item purchased....A
dentist is generally considered the consumer of the materials he purchases. Further, the
fact that a dentist places a device into a patient's mouth does not make the dentist a
retailer but rather the dentist is a consumer utilizing the device to perform a service.
Kilbane v. Director of Revenue, 544 S.W.2d 9 (1976) and Hardy v. State Tax
Commission, 561 P.2d 1064 (1977). In determining whether a provider of services such
as a dentist is selling tangible personal property or merely using such in performing his
services, the "true test is one of basic purpose of the buyer." 9 Vanderbilt Law Review,
228, 231 (1956). A dental patient has as his basic purpose the acquiring of services and
not acquiring tangible personal property. From all the above, we find and conclude that
[the dentist] purchased tangible personal property for use in South Carolina as the result
of a retail purchase by the consumer of such purchase (emphasis added).
After reviewing the exemption, the Commission further held:
To apply this exemption, [the dentist] must bring himself squarely within the statutory
terms of the exemption he seeks. Textile Hall Corp. v. Hill, 54 S.E.2d 809 (1949).
Further, the language of the tax exemption statute must be given its plain, ordinary
meaning and must be strictly construed against the exemption being claimed. John D.
Hollingsworth on Wheels, Inc. v. Greenville County Treasurer, 278 S.E.2d 340 (1981).
Thus we must decide if what is being sold is a prosthetic device....(emphasis added).
In summary, the retail transaction is the transaction whereby the dentist purchases the dental
prosthetic device for use in performing professional services; and, "we must decide if what is
being [purchased by the dentist] is a [dental] prosthetic device [at the time of purchase]". Note,
the Decision was overturned in court for other reasons.
To answer the first question ( What is a "dental prosthetic device"? ) we must refer to Regulation
117-174.257. That regulation defines the term "prosthetic device" as "an artificial device to
replace a missing part of the body. Eyeglasses, contact lens, hearing aids and orthopedic appliances, such as braces, wheelchairs and orthopedic custom-made shoes, do not come within the
exemption" (emphasis added).
Also, quoting from an Attorney General Opinion ( #77-9; January 10,1977 ), "by definition a
prosthesis is any artificial organ or part replacing a missing natural one. .....Braces, which give
support or stability to a limb or joint are not replacement parts, hence are not considered
prosthesis; instead, they are known as orthotic ('straightening') devices."

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With respect to specific devices, the Commission held in the aforementioned Decision dated
May 31, 1989 that:
.... devices purchased by [a dentist] such as artificial teeth, dentures, crowns, inlays and
overlays are prosthetic devices. Devices such as braces and other straightening
apparatuses are not prosthetic devices (emphasis added).
Conclusions:

1. The term "dental prosthetic device" is determined to mean an artificial device or part which
   replaces a missing part of the body. The term does not include devices which straighten or
   support a part of the body.
2. Of the items listed in Exhibit "A", the following are considered to be "dental prosthetic
   devices", at the time of purchase by the dentist, and are therefore exempt from the tax:
   a) Crowns
   b) Inlays
   c) Bridges
   d) Veneers
   e) Dentures
   f) Posts and Cores
   g) Implants
   h) Maxillofacial prosthetics, if used to replace part of the maxilla, mandible or face. Any
   such item used to straighten, support or in any other manner which does not replace a part
   of the body, does not come within the provisions of the exemption.
   It should be noted that all other items listed in Exhibit "A" are not considered to be "dental
   prosthetic devices", and that materials, purchased by a dentist to construct a prosthetic device, do
   not qualify for the exemption, as they do not constitute "dental prosthetic devices" at the time of
   purchase.
   SOUTH CAROLINA DEPARTMENT OF REVENUE
   s/S. Hunter Howard Jr
   S. Hunter Howard, Jr., Chairman
   s/A. Crawford Clarkson Jr.
   A. Crawford Clarkson, Jr., Commissioner
   s/T. R. McConnell
   T. R. McConnell, Commissioner
   Columbia, South Carolina
   January 17
   , 1990

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EXHIBIT "A"
1.

Amalgam:

A metallic direct filling material used to replace lost
tooth structure. It is obtained by mixing an alloy for
dental amalgam with mercury.

2.

Composite materials:

Plastic filling materials used to replace lost tooth
structure. They are composed of an organic
polymeric matrix reinforced with a fine dispersion of
an inorganic filler such as quartz.

3.

Sealants:

A plastic material used to fill pits and fissures where
enamel formations were incomplete.

4.

Space maintainers:

An acrylic or acrylic and wire appliance that
maintains arch space to allow space for eruption of
secondary or permanent teeth.

5.

Orthodontic wire:

Wires of noble or base metal alloy providing the
primary mechanism for force application for
movement of teeth.

6.

Bands:

A flattened continuous circumferential metallic ring
which is constructed to fit and be cemented around
the clinical crown of a tooth.

7.

Crowns, Inlays,
Bridges, Veneers:

Partial or total replacement procedures of the
anatomical crown portion of a tooth. Used to replace
lost tooth structure or missing teeth.

8.

Dentures:

Devices intended to replace one or more teeth and
associated tissues.

9.

Posts and cores:

Composed of composite resins, amalgam, stainless
steel or cast gold and are used to replace missing
tooth structure after a tooth has been treated
endodontically.

10.

Pins:

Used to stabilize restorative devices such as crowns,
endodontically treated teeth, and/or to reinforce and
retain large restorations.

11.

Gutta percha:

Used as a root canal filling material. Generally is
modified with zinc oxide, a radiopacifer and
plasticizer.

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12.

Implants:

Devices placed by surgical procedures to replace
missing teeth and to provide supports for prosthetic
devices.

13.

Calcium hydroxide
material:

Material used as a liner or base to provide a
barrier for the protection of pulpal tissue from
chemical irritation.

14.

Zinc oxide eugenol
material:

A cement or restorative material produced by
reaction of a powder which is mainly zinc oxide with
a liquid which is mainly eugenol.

15.

Acrylic material:

A synthetic polymer used for construction of denture
bases, artificial teeth, for veneers, as a cement and/or
as a restorative material.

16.

Porcelain material:

Used in fixed dental prostheses as an esthetic veneer
for crowns and bridges with metal substrates and allceramic restorations such as porcelain jacket crowns
or inlays. Also used to fabricate artificial teeth.

17.

Prosthetic metal:

Casting alloys used to fabricate precision metal
devices used in intraoral fixed and removable
prosthesis.

18.

Maxillofacial
prosthetics:

Definitions have been given for the implants
listed under this heading. A general definition of all follows:
Prosthetic devices used for replacement or various
lost body parts to restore or maintain function.

Specific items not included in the general definition of Maxillofacial prosthetics:
18a. Radiation carrier: Device used to contain radioactive isotopes for application of
radiation to diseased tissues.
18b. Radiation shield: Leaded walls or aprons used to protect patients and dental
personnel from unnecessary radiation.
18c. Docking device: Aligning and positioning devices used in radiology.
18d. Fluoride applicator, A device for holding topical fluoride per arch: formulations for
applications in the mouth.

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