Were kinetic-therapy and pressure-reduction medical beds exempt from Tennessee sales and use tax as orthotic or similar medical support devices?

Plain-English summary

Kinetic-therapy beds and pressure-reduction beds were exempt from Tennessee sales and use tax as orthotic devices. The beds performed support and movement functions that severely immobilized patients could not perform themselves.

Kinetic-therapy beds continuously rotated patients to address pulmonary, circulatory, and blood-clot complications associated with immobility. Pressure-reduction beds redistributed weight and reduced surface pressure to maintain blood flow and help prevent or treat pressure ulcers, burns, skin graft complications, and open wounds.

The statutory exemption covered prosthetics, orthotics, surgical supports, and similar medical corrective or support appliances. Tennessee had applied "orthotics" to devices that brace, support, or align the skeletal or muscular system. The Department concluded that both bed categories supplied qualifying support; it also said kinetic beds could augment the circulatory system in a prosthetic-like way.

What this means for you

Medical-equipment suppliers

The ruling focused on therapeutic function rather than whether the product looked like a conventional brace. Document how specialized equipment supports or substitutes for body functions.

Hospitals and skilled nursing facilities

These were specialized prescribed beds for acute-care and immobile patients, not ordinary hospital furniture. The detailed medical use drove the exemption.

Accountants and tax professionals

The Department grounded exemption in the beds' corrective and support functions, including patient rotation, circulation support, weight redistribution, and pressure reduction.

Common questions

Q: Were kinetic-therapy beds exempt?
A: Yes. They moved and supported patients who could not move themselves and helped address circulatory and pulmonary complications.

Q: Were pressure-reduction beds exempt?
A: Yes. Their engineered weight distribution and movement supported blood flow and wound care.

Q: Did the Department treat the beds as orthotics? A: Yes. It concluded both categories were exempt orthotic devices under the cited statute.

Q: Does this mean every hospital bed is exempt? A: The ruling addressed the specialized therapeutic beds described in detail; it did not decide ordinary beds generally.

Q: Can another supplier rely on this result?
A: No. This letter ruling binds the Department only for the addressed taxpayer and facts.

Citations and references

• Tenn. Code Ann. § 67-6-314(5) — exemption for prosthetics, orthotics, surgical supports, and similar medical corrective or support appliances, as cited in the ruling.

Source

• Landing page: https://www.tn.gov/revenue/tax-resources/legal-resources/tax-rulings.html
• Original PDF: https://www.tn.gov/content/dam/tn/revenue/documents/rulings/sales/97-35.pdf

Original ruling text

TENNESSEE DEPARTMENT OF REVENUE
LETTER RULING # 97-35
WARNING

Letter rulings are binding on the Department only with respect to the individual taxpayer being addressed in the ruling. This presentation of the ruling in a redacted form is informational only. Rulings are made in response to particular facts presented and are not intended necessarily as statements of Department policy. SUBJECT Application of sales and use tax to therapeutic medical beds and mattresses.

SCOPE
This letter ruling is an interpretation and application of the tax law as it relates to a specific set of existing facts furnished to the department by the taxpayer. The rulings herein are binding upon the Department and are applicable only to the individual taxpayer being addressed. This letter ruling may be revoked or modified by the Commissioner at any time. Such revocation or modification shall be effective retroactively unless the following conditions are met, in which case the revocation shall be prospective only: (A) The taxpayer must not have misstated or omitted material facts involved in the transaction; (B) Facts that develop later must not be materially different from the facts upon which the ruling was based; (C) The applicable law must not have been changed or amended; (D) The ruling must have been issued originally with respect to a prospective or proposed transaction; and (E) The taxpayer directly involved must have acted in good faith in relying upon the ruling; and a retroactive revocation of the ruling must inure to the taxpayer’s detriment.

FACTS
[THE TAXPAYER] sells and leases therapeutic medical beds to acute care patients primarily in hospital intensive care units, medical and surgical floors,

and skilled nursing facilities. These specialized medical beds are used in the treatment and prevention of disorders associated with long-term patient immobility such as pneumonia, atelectasis or lung collapse, ventilation profusion problems, pressure ulcerations, skin breakdown and wound infection. The products are intended to substitute for the patient’s natural movements which are the body’s natural defense against pressure ulcerations, pneumonia and wound infection. Patients requiring the use of the Taxpayer’s products typically have lost the ability to move on their own due to spinal cord injury, head injury or coma. The beds are prescribed for the treatment of patients suffering from spinal cord injury, severe pulmonary complications, multiple trauma, severe burns, skin graphs and severe pain. Once it is determined that the patient is no longer in need of the Taxpayer’s product, the Taxpayer’s medical technicians remove the product from the treatment facility, sterilize the product and make the product ready for use by the next patient. The Taxpayer’s products can be classified into two general treatment classifications: Kinetic Therapy and Pressure Reduction Therapy. In general, Kinetic Therapy is the continuous side to side rotation of the patient. The Kinetic Therapy beds are designed to address complications associated with immobility which include complications resulting from pulmonary and circulatory problems. In addition, the Kinetic Therapy bed helps an immobilized patient avoid complications associated with deep vein thrombosis by increasing venous return. Venous return is the process by which blood is returned from the lower extremities to central circulation. In the healthy person, the act of standing or walking pumps blood from the lower extremities to central circulation. Because an immobilized person can neither stand nor walk, venous return is slowed, often resulting in blood clots. By rotating the patient on one of the Kinetic Therapy beds, the patient’s legs are systematically raised to a level higher than the heart thereby enhancing venous return, improving the flow of blood and diminishing the possibility of clotting. This therapy is primarily used for the treatment of patients suffering from spinal cord or head injury. Pressure Reduction Therapy is used primarily in the treatment of pressure ulcerations, severe burns, skin graphs and open wounds resulting from massive trauma. These beds provide redistribution of the patient’s weight and reduction in surface interface pressures, thereby maintaining proper blood flow. The beds included in this group are comprised of a series of cushions that are fed by a manifold that is attached to a blower or motor that pushes air through the cushions. This treatment also helps to prevent the development of additional pressure ulcerations and helps to provided wound infection control. Patients suffering from long-term immobility suffer from increased pressure between the skin and the support surface on which they are placed. This pressure causes the compression of the patient’s tissues between the support surface and the patient’s bone resulting in the reduction of blood flow to the affected areas. After a period of time, generally a matter of minutes, toxins and chemical wastes

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produced by the body’s tissues along with oxygen deprivation result in the necrosis or death of the affected tissues.

ISSUE
Whether the Kinetic Therapy beds and Pressure Reduction Therapy beds are exempt from sales and use tax pursuant to Tenn. Code Ann. § 67-6-314(5).

RULING
The Kinetic Therapy beds and Pressure Reduction Therapy beds are exempt from sales and use tax pursuant to Tenn. Code Ann. § 67-6-314(5). ANALYSIS Tenn. Code Ann. § 67-6-314(5) provides an exemption from sales tax of “the sale of prosthetics, orthotics, special molded orthopedic shoes, walkers, crutches, surgical supports of all kinds, and other similarly medical corrective or support appliances and devices.” The exemption of orthotics has been applied to devices used to brace, support, or align the skeletal or muscular system. Based on the facts provided, both types of beds are designed to prevent and alleviate complications caused by long-term confinement to bed care and the body’s inability to provide proper support. The Kinetic Therapy beds provide support and movement to patients who are not able to move themselves. The Kinetic Therapy beds may also function as a prosthetic device by augmenting the circulatory system’s ability to move blood through the body. The Pressure Reduction Therapy beds provide needed support by means of scientifically engineered weight distribution and movement to aid in the flow of blood circulation to and from injured areas. Accordingly, both types of beds are tax exempt as orthotic devices. Tenn. Code Ann. § 67-6-314(5).

__________
Caroline R. Krivacka, Tax Counsel

APPROVED: ____
Ruth E. Johnson, Commissioner

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DATE:

8-13-97

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