Are Gore-Tex and GTAM periodontal materials, which are temporarily implanted to help regenerate gum and bone tissue lost to periodontal disease but are later removed, exempt from Texas sales tax as items that remain in the patient's body?

Plain-English summary

A dental products company asked the Comptroller whether its Gore-Tex and GTAM periodontal and bone-augmentation materials are exempt from Texas sales tax. These materials are used to treat periodontal disease and bone defects in the oral cavity: one product (referred to as "ABC" in the redacted letter) helps regenerate the supporting structures of teeth lost to periodontal disease, and another ("XYZ") helps regenerate bone tissue in defects caused by disease or trauma. Both are implanted temporarily, placed over the defect to keep surrounding tissue from interfering with regeneration, and left in place for one to nine months while the body heals itself before being removed.

The Comptroller ruled that even though these materials aid the healing process, they do not qualify for exemption — the deciding factor was that the materials are removed and do not remain permanently in the patient's mouth.

What this means for you

Periodontists, oral surgeons, and dentists

If you purchase Gore-Tex, GTAM, or similar temporarily-implanted regeneration materials for periodontal or bone-defect treatment, this letter indicates the Comptroller did not treat them as exempt simply because they aid healing or are surgically implanted — the fact that they are later removed rather than staying permanently in the patient's mouth was the key reason the exemption did not apply.

Dental supply sellers and manufacturers

If you sell or distribute temporary implant/regeneration materials to Texas dental practices, this ruling suggests the "remains in the patient's mouth" distinction (rather than whether the item aids treatment) is what the Comptroller looks to when deciding whether a dental product is exempt. Products designed for permanent placement may be treated differently than temporary ones — but this letter only addresses the specific temporary materials described to it.

Accountants and tax professionals advising dental practices

Use this letter as an illustration of how the Comptroller draws the line for dental/medical device exemptions: temporary implants removed after the healing period were held taxable, even though they served a genuine treatment purpose during that time.

Common questions

Q: Are Gore-Tex and GTAM periodontal materials exempt from Texas sales tax?
A: No. The Comptroller ruled they do not qualify for exemption because they are removed and do not remain in the patient's mouth.

Q: Does it matter that these materials help the body heal and regenerate tissue?
A: The letter acknowledges the materials aid the healing process, but that alone was not enough — the deciding factor was that they are removed after treatment rather than remaining permanently.

Q: How long are these materials left in place before removal?
A: The letter states the products are implanted temporarily and left in place for one to nine months while the body heals itself.

Q: What do these products actually do?
A: One material is used to regenerate the supporting structures of teeth lost to periodontal disease; the other is used to regenerate bone tissue in defects caused by disease, trauma, or similar causes. Both are placed over the defect to exclude surrounding tissue that could interfere with regeneration.

Q: Can a dental practice or supplier rely on this letter for a different product?
A: No. The letter states its opinion is based on the facts presented, and if there are additional or different facts, the opinion could change. It also binds only the taxpayer to whom it was issued.

Q: What statutes or rules does this letter cite for its exemption analysis?
A: None are cited in the body of the letter itself. The only rule reference in the document is a STAR system alert noting that Rule 3.341 (Governmental Publications, Records or Documents) was later repealed and folded into Rule 3.322(h)(5) (Exempt Organizations) — that alert is unrelated to the periodontal materials exemption question and was added by the Comptroller's office after the letter was originally issued.

Citations and references

No statutes or rule numbers were cited in the substantive analysis of this letter. The only rule references appearing in the document are in the STAR system's added "ALERT" notice at the top, which relates to Rule 3.341/Rule 3.322 (Governmental Publications, Records or Documents / Exempt Organizations) — a housekeeping notice about the STAR system, not a citation used in deciding this letter's exemption question.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9207L1184E01

Original ruling text

ALERT: Rule 3.341 concerning Governmental Publications, Records or Documents
has been repealed effective 02/11/2008. The content of Rule 3.341 has been
incorporated into subsection (h)(5) of Rule 3.322 concerning Exempt
Organizations effective 07/19/2011.

July 7, 1992

Dear ***:

Thank you for your inquiry regarding the taxability of your company's products
used in treatment of periodontal disease and bone defects in the oral cavity.

You state that the *** (ABC) is used to regenerate the supporting
structures of teeth which have been lost to periodontal disease, and that the
***** (XYZ) is used to regenerate bone tissue in defects caused by
disease, trauma, etc. These products are implanted temporarily and left in
place for one to nine months while the body heals itself. The products are
placed over a defect to exclude the surrounding tissues which could interfere
with the regeneration Process.

While the periodontal and augmentation materials described in the brochures you
provided do aid in the healing process, they do not qualify for exemption
because these materials are removed and do not remain in the patient's mouth.

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

If you have any questions, please don't hesitate to write the Tax
Administration Division or call one of our tax specialists toll free at
1-800-252-5555.

Sincerely,

J. Hale
Tax Administration Division