Are tracheal ('endo-trach') tubes purchased by hospitals exempt from Texas sales tax as prosthetic devices?

Subject

Tracheal ('Endo-Trach') Tubes Are Exempt Prosthetic Devices

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9310L1271C05

Plain-English Summary

A taxpayer asked the Comptroller for a taxability ruling on tracheal ("endo-trach") tubes purchased by hospitals. The facts presented were that a tracheal tube assists a patient who cannot breathe on his or her own, and that the tube may be implanted during surgery only, or may remain in the patient post-operatively — anywhere from a few hours to several months, as in the case of a coma patient on a ventilator.

The Comptroller's response holds that, assuming the tube is used to replace missing, damaged, or malfunctioning vital organs or appendages of the human body, a tracheal tube is a prosthetic device, citing Comptroller's Administrative Hearing No. 22,410. Because it is a prosthetic device, a hospital, other health care provider, or individual may purchase a tracheal tube tax free under Rule 3.284(c)(1). The letter specifically notes that no prescription is required for this exemption to apply.

The letter also directly answers a second question: whether the place of use or length of use affects the tax treatment. The Comptroller's answer is simply "No" — meaning the exemption applies regardless of whether the tube is used only briefly during surgery or remains implanted for an extended period afterward.

As with all STAR letter rulings, the response is expressly based on the facts presented, and the opinion could change if the facts were different.

What This Means For You

If you sell or purchase tracheal tubes for hospital or patient use: This letter treats tracheal ("endo-trach") tubes as prosthetic devices, so they may be purchased tax free under Rule 3.284(c)(1) — without needing a prescription — as long as the tube is used to replace missing, damaged, or malfunctioning vital organs or appendages of the human body.

If you're unsure whether duration or setting of use matters: According to this letter, it does not. The Comptroller confirmed that neither the place of use nor how long the tube stays implanted (a few hours versus several months) changes the tax-free treatment.

If your situation involves different facts: This ruling is expressly limited to the facts described (a tracheal tube assisting a patient who cannot breathe independently). If your product or use case differs, the letter itself cautions that the opinion could change with different facts.

Q&A

Q: Are tracheal ("endo-trach") tubes purchased by hospitals subject to Texas sales tax?
A: No. Per the letter, assuming the tube replaces missing, damaged, or malfunctioning vital organs or appendages of the human body, it is a prosthetic device and may be purchased tax free under Rule 3.284(c)(1).

Q: Is a prescription required to buy a tracheal tube tax free?
A: No. The letter states explicitly, "No prescription is required."

Q: Does it matter whether the tube is used only during surgery or remains implanted afterward?
A: No. The letter states the tube "may stay implanted during surgery only or remain in the patient post-operatively," including for several months in cases like a coma patient on a ventilator, and confirms this does not affect the tax treatment.

Q: Does the place of use or length of use change whether tax applies?
A: No. The letter directly answers this question with "No."

Q: What authority does the Comptroller rely on to classify the tracheal tube as a prosthetic device?
A: Comptroller's Administrative Hearing No. 22,410, as cited in the letter's response.

Original ruling text

October 26, 1993

Dear ****:

I have received your letter requesting a taxability ruling for tracheal
("endo-trach") tubes purchased by hospitals.

FACTS: You state that the tracheal tube assists a patient who cannot breathe on
his or her own. The tracheal tube may stay implanted during surgery only or
remain in the patient post-operatively. A tracheal tube that remains in a
patient post-operatively may stay implanted a few hours or for several months,
as with a coma patient on a ventilator.

Question 1: Based on the above description, are tracheal tubes subject to sales
tax?

Response: Assuming it is used to replace missing, damaged or malfunctioning
vital organs or appendages of the human body, a tracheal tube is a prosthetic
device, according to Comptroller's Administrative Hearing No. 22,410.
Therefore, a hospital, other health care provider, or individual may purchase a
tracheal tube tax free under Rule 3.284(c)(1). No prescription is required.

Question 2: Does the place of use or length of use affect the application of
Tax?

Response: No.

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,

Joan Hale
Tax Administration Division

NOTE: Previous Accession Number 9310840L