Is a DEXA (dual energy x-ray absorptiometer) machine, used by a doctor to diagnose osteoporosis and measure bone mineral density, exempt from Texas sales tax as an orthopedic appliance?

Plain-English summary

A seller had installed a DEXA (dual energy x-ray absorptiometer) machine for a doctor, collected payment, and then refunded the sales tax after the doctor's CPA advised claiming an exemption under Rule 3.284(a)(9), the orthopedic appliance exemption. The Comptroller told the seller that was wrong: the doctor owed sales tax on the machine and could not use an exemption certificate to avoid it.

DEXA equipment scans a patient's skeleton to measure bone mineral density, which helps a physician assess and diagnose osteoporosis and track how well treatment is working over time. Rule 3.284(a)(9) exempts "orthopedic appliances" — devices designed specifically to correct or prevent human deformities, defects, or chronic diseases of the skeleton, joints, or spine. The Comptroller drew a clean line: diagnostic equipment doesn't correct or prevent anything, it just measures and informs a diagnosis. Because a DEXA machine only produces diagnostic information, it falls outside the orthopedic appliance exemption even though the information it produces is used to manage a skeletal disease.

What this means for you

Physicians and medical practices buying diagnostic equipment

Equipment that diagnoses, images, measures, or monitors a condition is generally taxable in Texas even when the condition itself relates to bones, joints, or the spine. The orthopedic appliance exemption is reserved for devices that actually correct or prevent the condition (braces, supports, corrective devices), not for equipment used to detect or track it.

Medical equipment sellers

Don't accept an exemption certificate under Rule 3.284(a)(9) for diagnostic imaging or scanning equipment based on the underlying medical condition alone — check whether the device's actual function is corrective/preventive or purely diagnostic before treating a sale as exempt.

Accountants and tax professionals

This letter is a useful, simply-stated example of how the Comptroller reads "correction or prevention" narrowly: equipment that informs treatment decisions, rather than directly treating or preventing the condition, does not qualify, regardless of how central it is to managing a patient's disease.

Common questions

Q: Is a DEXA scanner exempt from Texas sales tax as medical equipment?
A: No. It's taxable — the orthopedic appliance exemption doesn't cover diagnostic equipment, only devices that correct or prevent skeletal deformities, defects, or chronic diseases.

Q: Can a doctor issue an exemption certificate for this kind of equipment?
A: No. A doctor must pay sales tax on the purchase of a DEXA machine; issuing an exemption certificate under Rule 3.284(a)(9) is not appropriate for diagnostic equipment.

Q: What kinds of devices does the orthopedic appliance exemption actually cover?
A: Appliances or devices designed specifically to correct or prevent human deformities, defects, or chronic diseases of the skeleton, joints, or spine — not equipment used to diagnose or monitor those conditions.

Q: Can I rely on this letter for my own equipment purchase?
A: No. This ruling is based on the facts submitted and current law at the time; other facts, though similar, may yield a different result, and it binds the Comptroller only as to the taxpayer it was issued to.

Citations and references

• 34 Tex. Admin. Code Rule 3.284(a)(9) (orthopedic appliance exemption — corrective/preventive devices only)

Subject

Dual Energy X — Ray Absorptiometer (Dexa) — Equipment Used By Physician In Diagnosis Of Osteoporosis And To Measure Bone Mineral Density

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9712059L

Original ruling text

December 18, 1997

Dear **:

Thank you for your letter dated December 15 1997, concerning the taxability of
the dexa (dual energy x-ray absorptiometer).

The equipment is used to scan specific skeletal sights to determine a patient's
bone mineral density. The resulting bone densitometry study aids a physician in
the assessment and diagnosis of osteoporosis in its various stages. Subsequent
studies on the same patient may then be used to observe the effectiveness of
steps taken to treat or prevent the disease.

Upon completion of a recent sale and installation of this equipment, you
received payment of the balance less the sales tax. The Doctor's CPA had
advised him to claim exemption under Rule 3.284(a)(9).

Comptroller Response: A doctor may not issue an exemption certificate in lieu
of tax on the equipment. A doctor must pay sales tax on their purchase of the
equipment.

An orthopedic appliance is any appliance or device designed specifically for
use in the correction or prevention of human deformities, defects, or chronic
diseases of the skeleton, joints, or spine. (emphasis added)

The equipment above that measures bone mineral density is not used for
correction or prevention. The equipment is for diagnostic purposes.

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

If you have any questions or need more information, I'll be glad to help you.
Please call me toll free at 1-800-531-5441, extension 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