Were enteral and parenteral feeding systems and their related supplies exempt as prosthetic devices?

Plain-English summary

After an administrative hearing, Texas treated enteral and parenteral feeding systems as exempt prosthetic devices. Hospitals, nursing homes, other institutions, and individuals could buy them tax-free with or without a doctor's prescription.

The exemption covered supplies and equipment only when directly related to and integral to the qualifying system. Pumps, tubing, and similar items usable for other purposes were not automatically exempt.

The exemption certificate had to state the exact reason for exemption rather than merely cite Rule 3.284. A refund could cover only supplies and equipment verified as integral parts of the enteral or parenteral system.

Common questions

Was a prescription required? No.

Were all IV pumps and tubing exempt? No. They had to be directly related to and part of the qualifying system.

What had to appear on the exemption certificate? The specific reason for the exemption.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8811L0920G01

Original ruling text

November 15, 1988

Dear ***

I am responding to your request for clarification regarding the
sales tax exemption for enteral and parenteral devices and related
supplies.

As a result of an administrative hearing, it has been determined
that enteral and parenteral devices and the related supplies are
"systems" that qualify as prosthetic devices. Prosthetic devices
are exempt from sales tax when sold with or without a doctor's
prescription and may be purchased tax free by hospitals, nursing
homes, other institutions, and individuals.

It is important to note that supplies and equipment are exempt
only when directly related to and become a part of the enteral and
parenteral "systems." It may be possible that these same type(s)
of IV pumps, tubing, etc. can be used for other purposes or as
parts of other systems that do not qualify as prosthetic devices.
Because of the restricted nature of this exemption, the exemption
certificate provided to your company by * Hospital must state
the exact reason for the exemption, rather than the general
reference to rule 3.284.

I am unable to determine, from the information provided with your
correspondence, the proper amount qualifying for this exemption.
The hospital must verify that the request for refund includes only
the supplies and equipment that are directly related to and
therefore an integral part of the enteral and parenteral systems.
When you are satisfied that this criteria has been met, you may
follow the refund procedures as outlined in the enclosed rule and
materials relating to refunds.

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

You may write me at Tax Correspondence, Comptroller of Public
accounts.

Sincerely,

Tasx Policy Division
Tax Correspondence