Is VasoSeal, a medical device used to stop bleeding from arterial punctures after procedures like coronary angiography and angioplasty, exempt from Texas sales tax?

Plain-English summary

The Texas Comptroller's Tax Policy Division responded to an inquiry about the taxability of VasoSeal, a medical device that rapidly stops bleeding from arterial punctures created during diagnostic and therapeutic procedures such as coronary angiography and angioplasty (Percutaneous Transluminal Coronary Angioplasty).

VasoSeal works by introducing collagen along the tissue track up to the vessel wall, without letting the collagen enter the vessel itself. The collagen forms a seal at the puncture site, attracting and activating blood platelets to form a coagulum at the arterial surface — similar to the collagen used by cardiovascular, general, and thoracic surgeons. The device is made up of several sterile, single-patient-use components: a needle depth indicator card, a needle clamp, a guide wire, a guide wire introducer, a vaso seal sheath, a dilator, and a collagen cartridge.

The Comptroller's office concluded that VasoSeal does not qualify for a sales tax exemption. It does not meet the definition of any exempt item, such as a drug/medicine or a prosthetic device. The letter points to Rule 3.284 (Drugs, Medicines, Medical Equipment, and Devices) and Texas Tax Code § 151.313 (Health Care Supplies) as the governing provisions, both of which were enclosed with the letter for the requester's reference.

What this means for you

Medical device sellers and distributors

If you sell a device like VasoSeal that mechanically seals a puncture site (rather than functioning as a drug, medicine, or prosthetic device), don't assume it automatically qualifies for Texas's health care supplies exemption. This letter shows the Comptroller drew a clear line: a device has to actually meet the statutory definition of an exempt category — drug/medicine, prosthetic device, or another listed item — not just be used in a medical setting.

Hospitals and medical facilities purchasing these devices

Because the Comptroller determined VasoSeal doesn't fall into an exempt category, purchasers should expect sales tax to apply to this device (and likely similar hemostasis-sealing products with the same components and function) unless a different exemption applies to their specific purchase.

Accountants and tax professionals

This letter is a useful reference point for classifying arterial-closure or hemostasis devices under Rule 3.284 and Tax Code § 151.313. The reasoning turns on the device's function (mechanically sealing a puncture site using collagen) rather than on it being used in a medical procedure — that alone doesn't make it a drug, medicine, or prosthetic device.

Common questions

Q: Is VasoSeal exempt from Texas sales tax?
A: No. The Comptroller ruled it does not meet the definition of any exempt item, such as a drug/medicine or a prosthetic device.

Q: Why isn't VasoSeal treated as a prosthetic device or medicine?
A: The letter doesn't spell out its full reasoning beyond stating the device doesn't meet the definition of any exempt item; it directs the requester to Rule 3.284 and Tax Code § 151.313 for the governing standards.

Q: Does this ruling apply to other similar hemostasis devices?
A: The letter states this opinion is based on the facts presented and current law, and that "different facts although similar, may result in different answers." So it applies most directly to VasoSeal as described, not automatically to every similar product.

Q: Can another taxpayer rely on this letter?
A: Generally, only the taxpayer to whom a STAR letter was directly issued can base a detrimental reliance claim on it, and documents on STAR may no longer reflect current policy even if not marked superseded.

Citations and references

Statutes and rules:

• 34 Tex. Admin. Code Rule 3.284 (Drugs, Medicines, Medical Equipment, and Devices)
• Tex. Tax Code § 151.313 (Health Care Supplies)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9508L1378B01

Original ruling text

August 29, 1995

Dear ****:

Thank you for your letter dated August 16, 1995, concerning the taxability
of a new medical product called VasoSeal. The literature you provided that
describes the product was most helpful.

The VasoSeal is a medical device that can rapidly stop bleeding from arterial
punctures used in diagnostic and therapeutic procedures such as coronary
angiography and angioplasty (Percutaneous Transluminal Coronary Angioplasty).

VasoSeal achieves hemostasis by introducing collagen along the tissue track up
to the vessel wall without allowing collagen to enter the vessel. The collagen
forms a seal at the puncture site. Like the collagen used by cardiovascular,
general and thoracic surgeons, VasoSeal is made of resorbable natural fibers.
They work by attracting and activating blood platelets and forming a coagulum
at the arterial surface.

The VasoSeal device contains the following component parts:

• needle depth indicator card
• needle clamp
• guide wire
• guide wire introducer
• vaso seal sheath
• dilator
• collagen cartridge

All the component devices are sterile and for single patient use.

Response: The VasoSeal device does not qualify for exemption. The device
does not meet the definition of any exempt item such as a drug/medicine, or
a prosthetic device, etc. Rule 3.284, Drugs, Medicines, Medical Equipment,
and Devices and Texas Tax Code .151.313, Health Care Supplies are both
enclosed for your reference.

This opinion is based on the facts presented and current law. Different facts
although similar, may result in different answers.

If you have any questions or need more information, you may call me toll free
at 1-800-531-5441, ext. 5-0330. The direct line is 512/475-0330. You may
also write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Bettie Peterson
Tax Policy Division

NOTE: Previous Accession Number 9508661L