Is collagen that a dermatologist purchases and injects into a patient's body during an office procedure subject to Texas sales tax?

Plain-English summary

A dermatologist's office asked whether collagen it purchases from the manufacturer and injects into patients during in-office treatments is subject to Texas sales tax — the practice doesn't resell the collagen or dispense it by prescription; the patient just pays a fee for the injection procedure. The Comptroller confirmed no tax is owed: when collagen is purchased for the purpose of implanting it into the human body, it qualifies as an exempt prosthetic device under Texas Tax Code § 151.313(a)(4) and Rule 3.284(a)(10)(C), and the injection itself is a medical procedure, not a taxable sale of tangible personal property.

What this means for you

Dermatologists and other medical practices that purchase injectable/implantable materials

If you buy a substance specifically to implant or inject into a patient's body as part of a medical procedure (rather than to resell it or dispense it as a take-home product), it can qualify as a tax-exempt prosthetic device. Vendors sometimes tell practices these purchases are taxable — this letter shows the Comptroller's own position is the opposite, at least for collagen implanted during treatment.

Medical device and injectable suppliers

Don't assume every consumable sold to a medical practice is taxable by default. Whether an item qualifies as an exempt prosthetic device turns on its use — implanted into the body — not on how it's packaged or billed.

Accountants and tax professionals

The ruling is a short, direct application of § 151.313(a)(4) and Rule 3.284(a)(10)(C) to injectable collagen. It doesn't address other injectables or cosmetic fillers by name, so a similar product would need its own analysis of whether it's genuinely "implanted" versus merely applied or dispensed.

Common questions

Q: Does a dermatology practice owe sales tax on collagen it injects into patients?
A: No, according to this letter — collagen purchased for implanting into the human body is an exempt prosthetic device under § 151.313(a)(4) and Rule 3.284(a)(10)(C).

Q: Does this exemption depend on how the patient is billed?
A: The letter doesn't turn on billing structure; it focuses on the purpose of the purchase (implantation into the body) rather than whether the collagen is separately itemized or bundled into a procedure fee.

Q: Can my practice rely on this letter for a different injectable product?
A: Not directly. This is a letter ruling addressed to one taxpayer's facts about collagen specifically; a different product would need its own request to the Comptroller to confirm exempt status.

Citations and references

Statutes and rules:

• Tex. Tax Code § 151.313(a)(4) (exemption for prosthetic devices)
• 34 Tex. Admin. Code Rule 3.284(a)(10)(C) (drugs, medicines, and devices)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200008578L

Original ruling text

August 9, 2000

From: Bettie Peterson
To: ****

Thank you for your recent email.

When purchased for the purpose of implanting into the human body, collagen
qualifies for exemption as a prosthetic device under Texas Tax Code
151.313(a)(4) and Rule 3.284(a)(10)(C). The collagen injection is a medical
procedure which is not subject to sales tax.

Referenced rules are available at
.

The State Tax Automated Research system, that provides viewing and downloading
of rules, edited letter rulings, hearings, AG Opinions, etc., may be accessed
on the Internet at http://www.window.state.tx.us/.

This opinion is based on the facts you submitted and current law. Other facts,
though similar, may result in different answers.

If you have questions or need more information, I will be glad to help you.
You may call me toll free from anywhere in the United States at 1-800-531-5441,
extension 5-0330.

On Wed, 2 Aug 2000 15:36:01 -0500 **
wrote:

I work for a dermatologist and she has been told by collagen corporation that
the collagen that she purchases to use during treatments is taxable. The
collagen is purchased from the manufacturer and injected into the patient while
they are in the office. The collagen is not resold or given as a prescription
to the patient. The patient pays a fee for the service of the injection, but
does not purchase the collagen itself. It is my understanding that since the
collagen is being used in a medical treatment, it is not taxable.

Please let me know what the exact rule is concerning this issue. If you have
any additional questions, you can reach me by the phone number or email address
below. Thank you for time concerning this matter.

Director of Marketing and Administration