Texas Letter Ruling 9406428L: Hot Tub/Spa — Therapeutic Equipment With Doctor'S Prescription — Size Is No Longer Consideration To Determine Exemption

Plain-English summary

A taxpayer had recently bought a spa or hot tub from a pool and spa company and followed up with the Comptroller's office about whether the purchase was subject to Texas sales tax. The Comptroller confirmed that Texas sales tax law exempts therapeutic appliances and devices that are designed for use in treating or curing human sickness, disease, suffering, or deformity, or to alleviate pain, when prescribed by a physician for an individual.

A hot tub or similar appliance can qualify for this exemption when it is prescribed by a licensed practitioner of the healing arts. To claim it, the customer must give the seller a signed statement from the doctor or other licensed practitioner, written on the practitioner's letterhead, explaining why the hot tub or similar appliance was prescribed. Notably, the letter states that the physical size of the hot tub is not a consideration in determining whether it qualifies for the exemption — a large spa is treated the same as a smaller unit as long as it was properly prescribed.

Because the taxpayer had already purchased the spa (and apparently paid tax on it), the Comptroller explained that the taxpayer could present the doctor's signed statement to the seller and request a sales tax refund directly from the seller. The seller, in turn, can seek reimbursement from the state for that refund, following the procedure in Rule 3.325 concerning tax refunds.

What this means for you

Business owners (pool and spa retailers)

If a customer buys a hot tub or spa and later provides a signed statement from a licensed physician or other healing-arts practitioner (on the practitioner's letterhead) explaining why the appliance was prescribed, you can treat the sale as exempt from sales tax. If you already collected tax on that sale, you may issue the customer a refund and then seek reimbursement from the state under Rule 3.325 — you do not need to worry about the size of the unit when deciding whether the exemption applies.

Accountants and tax professionals

When advising clients who purchased therapeutic equipment like a hot tub or spa, remember that the exemption turns on the existence of a proper doctor's prescription statement, not on the physical characteristics (such as size) of the appliance. If a client paid tax on a hot tub that was medically prescribed, a post-purchase refund claim routed through the seller is the correct mechanism, rather than treating the sale as permanently taxable.

Consumers who purchased a prescribed hot tub or spa

If your doctor or another licensed healing-arts practitioner prescribed a hot tub or spa for a medical reason, get a signed statement from them on their letterhead explaining the medical basis, and take it back to the seller to request a sales tax refund.

Common questions

Q: Does the size of the hot tub affect whether it qualifies for the therapeutic appliance exemption?
A: No. The letter specifically states that the size of the hot tub or similar appliance is not a consideration in determining whether it qualifies for the exemption.

Q: What documentation is required to claim the exemption?
A: The customer must provide the seller with a signed statement from a doctor or other licensed practitioner of the healing arts, written on the practitioner's letterhead, specifying why the hot tub or similar appliance is prescribed.

Q: I already paid sales tax on my hot tub before getting the doctor's statement — can I still get a refund?
A: Yes. You can present the doctor's signed statement to the seller and request a sales tax refund. The seller may issue the refund and then get reimbursement from the state under 34 Tex. Admin. Code Rule 3.325 concerning tax refunds.

Q: Does this exemption apply to any purchaser, or only to someone with a doctor's prescription?
A: The exemption applies only when the hot tub or similar appliance is prescribed by a licensed practitioner of the healing arts for treatment, cure, or pain relief for that individual; a general consumer purchase without such a prescription would not qualify.

Citations and references

• 34 Tex. Admin. Code Rule 3.325 (concerning tax refunds; procedure for a seller to issue a refund and obtain reimbursement from the state)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9406428L

Original ruling text

June 27, 1994

Dear **:

This is a follow-up to our telephone conversation of June 15, 1994, concerning
the taxability of a spa or hot tub that you bought recently from POOL AND SPA
COMPANY.

The sales tax law exempts therapeutic appliances and devices designed for use
during the treatment or cure of human sickness, disease, suffering, or
deformity or to alleviate pain when prescribed by a physician to an individual.

A hot tub, or similar appliance, qualifies as a therapeutic appliance when
prescribed by a licensed practitioner of the healing arts. The customer must
provide the seller a signed statement from the doctor or other licensed
practitioner of the healing arts, on the practitioner's letterhead, specifying
why the hot tub, or similar appliance, is prescribed. The size of the hot tub,
or similar appliance, is not a consideration in determining whether the hot
tub, or similar appliance, qualifies for exemption.

You may present the doctor's signed statement to the seller and request a sales
tax refund. The seller may issue the refund and get reimbursement from the
State as outlined in Rule 3.325 concerning tax refunds.

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

You may call toll me free 1-800-531-5441, extension 3-4683. The direct line is
512/463-4683. You may also write to Tax Administration Division, Comptroller of
Public Accounts.

Sincerely,

Eddie C. Washington
Tax Administration Division

cc: **