Ezel / Tax Rulings / TX
TX 8608L0750C08 Sales and/or Use Tax (State,Local,MTA) 1986-08-21

Could gases such as oxygen, carbon dioxide, nitrous oxide, and nitrogen qualify for a Texas sales-tax exemption when sold for medical use?

Short answer: Yes, they could qualify when sold to doctors, hospitals, and other health-related organizations as drugs and medicines. The seller should obtain an exemption certificate from the customer.

Apply this to your situation

This page answers the general question as of 1986. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1986
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

The requester sold gases to hospitals. The Comptroller said gases including oxygen, carbogen, carbon dioxide, carbon monoxide, nitrous oxide, and nitrogen could qualify for sales-tax exemption when sold to doctors, hospitals, and other health-related organizations as drugs and medicines.

The seller should obtain an exemption certificate from a customer claiming that exemption.

Common questions

Did the letter say all sales of the listed gases were exempt? No. It said they may qualify when sold to health-related organizations as drugs and medicines.

Which gases did the letter list? Oxygen, carbogen, carbon dioxide, carbon monoxide, nitrous oxide, and nitrogen, among others.

What documentation should the seller obtain? An exemption certificate from the customer claiming the exemption.

Source

Original ruling text

August 21, 1986

Dear ***:

I am writing this letter pursuant to our phone conversation on April 20,
1986 concerning certain gases sold to hospitals.

Gases such as oxygen, carbogen, carbon dioxide, carbon monoxide, nitrous
oxide, nitrogen, etc. may qualify for exemption from sales tax when sold
to Doctors, hospitals and other health related organizations as a drug
and medicine. You should obtain an exemption certificate from your customer
claiming such as exemption.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write us at the Tax Administration Division.

Sincerely,

Tax Policy
Tax Administration Division

Get today's answer for your situation

You just read a 1986 ruling on this question. Ezel checks current Texas tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.