Texas Letter Ruling 9212L1211A13: Contact Lens Care Products

Plain-English summary

This is a 1992 Texas Comptroller letter answering a series of questions from a taxpayer about the taxability of contact lenses and related products. The letter clarifies an apparent inconsistency from an earlier October 2, 1992 letter regarding lens solutions.

The bottom line: prescription contact lenses themselves are not taxable, and no exemption form is needed to buy or sell them tax-free. Lens solutions (wetting, soaking, and cleaning solutions) are taxable, with one narrow exception — when a disinfective solution is sold as a component of a soft lens care kit at the same time as the prescription lenses, the whole kit (lenses and solution together) is exempt. Replacement components for that same care kit can also be sold tax-free later, but that requires an exemption certificate. Lens carrying cases are taxable and cannot be sold under an exemption certificate at all.

The letter also explains exemption certificate mechanics: any format is acceptable as long as it has the seller's and purchaser's name and address, the reason for the exemption, and the purchaser's signature and date. A certificate for a single transaction covers only that transaction; a certificate for future/recurring purchases (like ongoing care-kit replacement components) stays valid until the purchaser revokes it in writing or until the item loses its exempt status under a change in law.

What this means for you

Optometrists, opticians, and contact lens retailers

You do not need to collect sales tax (or an exemption certificate) on prescription contact lenses. But you must charge sales tax on lens solutions and carrying cases sold separately or as reorders — except that a disinfective solution counts as tax-exempt only when it is bundled into a soft lens care kit and sold together with the prescription lenses at the same time. If a customer later buys replacement solution or other kit components on their own, that replacement sale is exempt only if the customer gives you a valid exemption certificate.

Accountants and tax professionals

Note the narrow scope of the care-kit exemption: it applies only to a disinfective solution that was originally part of a soft lens care kit sold with the prescription lenses, and only continues for "replacement components for the care kit." All other lens solutions — wetting, soaking, and cleaning solutions sold on their own — are taxable with no exception. Lens carrying cases are flatly taxable, and the letter specifically states an exemption certificate "cannot be issued" for them.

Anyone drafting or accepting exemption certificates for these sales

The letter describes acceptable certificate content in plain terms: seller and purchaser name/address, the reason for exemption, and the purchaser's signature and date — any size or format is fine. A single-transaction certificate covers only that one sale. A certificate meant to cover future purchases (e.g., ongoing replacement components) remains valid until the purchaser revokes it in writing or the underlying exemption is eliminated by a change in the law.

Common questions

Q: Do I need an exemption certificate to sell prescription contact lenses tax-free?
A: No. Prescription contact lenses are not taxable, and no exemption form is needed.

Q: Are contact lens solutions taxable?
A: Yes, generally. The only exception is a disinfective solution sold as part of a soft lens care kit at the same time as the prescription lenses — that is exempt, as are later replacement components for the same kit (with an exemption certificate).

Q: Is a soft lens care kit taxable?
A: When sold together with the prescription lenses as a unit, the lens and care kit qualify for exemption from tax.

Q: Are lens carrying cases taxable?
A: Yes. Carrying cases are taxable, and the letter states an exemption certificate cannot be issued for them.

Q: What does a valid exemption certificate need to include?
A: The name and address of the seller and purchaser, the reason for the exemption, and the purchaser's signature and date. Any size or format is acceptable as long as those elements are present.

Q: How long does an exemption certificate stay valid?
A: A certificate for a single transaction is valid only for that transaction. A certificate covering future purchases (such as ongoing replacement components for a soft lens care kit) stays valid until the purchaser revokes it in writing or until the item loses its exempt status due to a change in the law.

Citations and references

No statutes, rules, or other authorities were cited in the text of this letter.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9212L1211A13

Original ruling text

December 1, 1992

Dear ***:

Thank you for your recent letter concerning the taxability of contact lenses
and accessories.

Your first question concerned lens solutions and the perceived inconsistency
between paragraph three and four of a letter sent to you on October 2, 1992.

Response: We have received questions through the years regarding solutions sold
to contact lens wearers. These solutions include wetting solutions, soaking
solutions, and cleaning solutions. We do not exempt solutions for contact lens
except when sold as a part of a soft lens care kit.

The facts we were presented when the question was first asked many years ago
was that soft lenses were sold at times with a care kit. A component of the
care kit was a disinfective solution. Based on this information, we said that
when lens and kit were sold together as a unit, the lens and care kit qualified
for exemption from tax. We further said that replacement components for the
care kit could also be sold tax free. This is the only situation where
solutions have been exempt from sales tax. All other solutions have always been
taxable.

Question 1: Are prescription contact lenses taxable? If yes, must we obtain an
exemption form?

Response: No, prescription contact lenses are not taxable. An exemption form is
not needed.

Question 2: Are solutions taxable? If yes, must we obtain an exemption form.

Response: Yes, solutions are taxable. If the solutions are part of a soft lens
care kit as outlined above, and are sold at the same time as prescription lens,
an exemption form is not needed. If sold at a later date as replacements for
the kit, an exemption form is needed.

Question 3: Are kits taxable. If yes, must we obtain an exemption form?

Response: Answered above.

Question 4: Are lens carrying cases taxable? If yes, must we obtain an
exemption form?

Response: Lens carrying cases are taxable. An exemption form cannot be issued.

Question 5: If a form is needed to exempt any of the above, which form is
acceptable? What is the correct format needed on the form?

Response: Enclosed is an exemption certificate that may be duplicated for your
use. As long as the certificate has the name and address of the seller and
purchaser, the reason for the exemption, and is signed and dated by the
purchaser, any size or format will be acceptable.

Question 6; How long is a certificate valid?

Response: A certificate completed for a single transaction is valid only for
that transaction. A certificate issued for future purchases, such as for
purchases of replacement components for the soft lens car kits are valid until
revoked in writing or until the item for which the certificate is issued loses
its exemption (such as a change in the law).

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

Sincerely

Tax Administration Division