Is a voice-activated environmental control system, prescribed by a doctor for a quadriplegic individual to independently operate a telephone, TV, lights, and electric hospital bed, exempt from Texas sales tax?

Plain-English summary

A taxpayer asked whether a voice-activated environmental control system, purchased under a doctor's prescription for an individual who is quadriplegic, qualifies for a Texas sales tax exemption. The system lets the individual -- who has no use of his upper or lower extremities -- independently control his telephone, electric hospital bed, TV, lights, and other electronic devices using only his voice, his sole means of independently controlling his own environment.

The Comptroller confirmed the system qualifies as an exempt adaptive device for appliances or equipment in the home, one of the mobility-related items listed as exempt under a doctor's prescription in the Comptroller's bulletin, "State Tax Exemptions for People with Disabilities" (which also covers items like equipment used to modify a farm tractor). Because sales tax had already been paid, the refund mechanism runs through the seller rather than a direct state refund: the individual gives the seller a properly completed exemption certificate and a copy of the doctor's prescription, and the seller then either takes a credit for the refunded amount on its next sales tax report, or requests its own refund from the Comptroller.

What this means for you

Individuals with disabilities purchasing adaptive home equipment

A doctor's prescription plus a completed exemption certificate can get you a sales tax refund on adaptive devices like voice-controlled environmental control systems -- request the refund directly from the seller, not the state.

Sellers of adaptive/assistive technology

Accept the customer's exemption certificate and prescription copy, then refund the tax to the customer; you can recover that amount yourself either as a credit on your next sales tax report or via your own refund request to the Comptroller.

Accountants and tax professionals working with disability-related purchases

This letter is a useful example of how the "adaptive device for appliances or equipment in the home" category in the disability tax-exemption bulletin extends beyond mobility aids in the traditional sense (wheelchairs, tractor modifications) to home environmental-control technology.

Common questions

Q: Does a voice-activated home control system qualify for the disability sales tax exemption?
A: Yes, per this letter, when purchased under a doctor's prescription as an adaptive device for home appliances/equipment.

Q: Who issues the refund if tax was already paid on the device?
A: The seller, per this letter -- upon receiving a properly completed exemption certificate and a copy of the doctor's prescription from the customer.

Q: How does the seller recover the refunded tax?
A: Per this letter, the seller may either take a credit on a current sales tax report or request a refund of the tax from the Comptroller.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9707581L

Original ruling text

July 25, 1997

Dear ***:

Thank you for your letter concerning the exemption of a voice activated
environmental control system purchased by an individual who is quadriplegic and
who has a doctor's prescription for the system.

I have enclosed a copy of our bulletin State Tax Exemptions for People with
Disabilities. In the list of mobility items exempt under a doctor's
prescription, the bulletin includes an adaptive device such as equipment used
to modify a farm tractor or appliances or equipment in the home.

The environmental control system allows the individual referenced in your
letter to access the telephone, electric hospital bed, TV, lights and other
electronic devices in his home by using his voice. The individual is
quadriplegic and has no use of his upper and lower extremities and therefore,
this is his only means of independent control of his environment.

A seller may refund the tax paid on the environmental control system because it
is an adaptive device for appliances or equipment in the home as explained in
our bulletin. The individual must give a properly completed exemption
certificate (copy enclosed) and a copy of the doctor's prescription to get a
refund from the seller. In turn, the seller can either take a credit for the
tax refunded to the customer when filing a current sales tax report or request
a refund of the tax.

This opinion is based on the facts you submitted. Other facts, though similar,
may yield different results.

You may call me toll free at 1-800-531-5441, ext. 5-0030. The direct line is
512/475-0030. You may also write to Tax Policy, Comptroller of Public
Accounts.

Sincerely,

David Somerville
Tax Policy Division

Enclosures