Were prescribed air-purification systems for allergy patients exempt from Texas sales tax?

Plain-English summary

Two environmental air-system models qualified as exempt therapeutic appliances or devices when sold to an individual under the named practitioner's prescription.

Sales to other entities—including doctors, hospitals, clinics, and nursing homes—were taxable. The seller needed a Texas permit, could buy resale inventory with a resale certificate, and had to retain patient prescriptions as proof of tax-free individual sales.

What this means for you

The equipment's medical use did not make every purchaser exempt. The buyer had to be an individual with the stated prescription, supported by records.

Common questions

Was a prescribed individual sale exempt? Yes.

Was a sale to a hospital or doctor exempt? No.

What proof did the seller keep? Copies of patient prescriptions.

Citations and references

• Comptroller Rule 3.285 — resale certificates

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9009L1043C12

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, TEXAS 78774

BOB BULLOCK
Comptroller

September 6, 1990

Dear *:

Thank you for your recent letter concerning sales of National
Safety Associates Environmental Air Systems (Model 1200A and
7000A) to patients with recurrent allergies.

The equipment will qualify for exemption from sales tax as
therapeutic appliances or devices when sold to an individual
under the prescription of ***. Sales of the equip-
ment to other entities, including other doctors, hospitals,
clinics, nursing homes, etc., are taxable.

*** should apply for a sales tax permit. Then a re-
sale certificate may be issued to your supplier in lieu of
paying tax on equipment purchased for resale. Please review
the enclosed Rule 3.285 on resale certificates. Copies of
prescriptions issued to patients should be kept as proof of
any tax-free sales made to individuals.

An application for Texas sales and use tax permit is enclosed
for your convenience. I've also enclosed several sales tax
rules for your review.

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

Please feel free to contact me if you have any additional
questions. You may write me, call toll free 1-800-252-5555
(ext. 3-4685) from anywhere in the United States or phone
512/463-4685.

Sincerely,
Julie Pesl
Tax Correspondence