Were mini Dopplers exempt therapeutic appliances, or taxable diagnostic devices?

Plain-English summary

The Comptroller corrected a December 31, 1990 letter. That earlier response had called mini Dopplers exempt therapeutic appliances when sold, leased, or rented to individuals under a prescription. The March 4, 1991 correction said diagnostic devices such as mini Dopplers did not qualify as therapeutic appliances and were taxable.

The attached earlier letter separately said permanently implanted arterial prostheses and carotid patches were exempt prosthetic devices. It also described therapeutic-appliance, exempt-organization, seller-permit, and annual-filing rules, but its mini-Doppler conclusion was superseded by the correction at the top of the document.

What this means for you

The controlling answer in this document is the later correction: a prescription did not turn a diagnostic mini Doppler into an exempt therapeutic appliance.

Common questions

Were mini Dopplers exempt? No.

What did Texas call them? Taxable diagnostic devices.

Why is there conflicting text below the correction? The document preserves the earlier December 1990 letter that the March 1991 response corrected.

Were permanently implanted arterial prostheses and carotid patches treated the same way? No; the attached letter classified those as exempt prosthetic devices.

Citations and references

• 34 Tex. Admin. Code Rule 3.284(a)(10), (a)(11), (c)(1), and (c)(6) — prosthetic devices and therapeutic appliances
• Texas Tax Code § 151.310(a)(2) and (a)(3) — exempt institutions referenced by the attached letter
• 34 Tex. Admin. Code Rule 3.322(c)(1)-(3), (5) — exempt organizations
• 34 Tex. Admin. Code Rule 3.286(a)(1) and (f)(2) — seller responsibilities and annual filing

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9103L1084A01

Original ruling text

March 4, 1991

Dear ***:

On December 31, 1990, I sent you a letter concerning the taxability of certain
medical devices. One of the devices discussed was mini Dopplers.

I stated that mini Dopplers qualified as therapeutic appliances and were exempt
when sold, leased or rented to individuals under a doctor's prescription. However,
it has been brought to my attention that diagnostic devices such as mini Dopplers
do not qualify as therapeutic appliances and are taxable.

I am sorry for any inconvenience this may cause.

An application for a tax permit has been mailed to you under separate cover. If
you do not receive this application within a week, please call me at 1-800-531-5441.

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

If you have any questions you may call or write Tax Administration Division. You
may call toll free 1-800-252-5555, or our regular number is 512/463-4600.

Sincerely,

Tax Administration Division

December 31, 1990

Dear ***:

We received your letter questioning the taxability of arterial prosthesis, carotid
patches, and mini Dopplers. Prosthetic devices which are permanently implanted in the
body are exempt from Texas tax. Therefore, the arterial prosthesis and carotid patches
are exempt from the tax. See section (a)(10) and (c)(1) of the enclosed Rule 3.284
relating to medical equipment and devices.

Therapeutic appliances are exempt when sold, leased or rented to individuals under
a prescription of a licensed practitioner of the healing arts. See sections (a)(11)
and (c)(6) of Rule 3.284. However, therapeutic appliances, devices and related
supplies are taxable when purchased by hospitals, nursing homes or other institutions
unless the hospital, nursing home, or other institution qualifies for exemption under
Texas Tax Code 151.310(a)(3) or (2). See sections (c)(1), (2), (3), and (5) of the
enclosed Rule 3.322 relating to exempt organizations.

If your company is performing any of the activities listed in section (a)(1) of the
enclosed Rule 3.286 relating to seller's and purchaser's responsibilities, then your
company will need to obtain a Texas tax permit. You should collect and remit the
applicable tax on any sales of mini Dopplers to hospitals, etc., that do not qualify
for exemption from the tax. I am sending you a Texas tax permit application under
separate cover.

Seller's with less than $1,000 in state tax to report during a year may file yearly
returns. See section (f)(2) of Rule 3.286.

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

If you have any questions you may call or write Tax Correspondence. You may call toll
free 1-800-252-5555, or our regular number is 512/463-4600.

Sincerely,

Tax Correspondence