Is an FDA-registered, prescription-only Vacuum Erection Technology (V.E.T.) system used to treat male impotence exempt from Texas sales tax when sold under a physician's prescription?

Plain-English summary

A taxpayer asked whether the V.E.T. (Vacuum Erection Technology) System — an FDA-registered device sold only by prescription and used to treat male impotence — is taxable when prescribed by a physician.

The Comptroller confirmed it is exempt. Rule 3.284(a)(11) defines a "therapeutic appliance or device" broadly, as any item designed to alleviate pain or designed for use during the treatment or cure of human sickness, disease, suffering, or deformity — and the V.E.T. system fits that definition. Rule 3.284(c)(8) then exempts the sale, lease, or rental of therapeutic appliances, devices, and related supplies specifically designed for them, as long as they're sold, leased, or rented to an individual under a prescription from a licensed practitioner of the healing arts.

What this means for you

Medical device retailers and pharmacies

A device doesn't need its own dedicated Comptroller rule or explicit product listing to qualify as an exempt therapeutic appliance — Rule 3.284(a)(11)'s general definition (alleviates pain, or treats/cures sickness, disease, suffering, or deformity) is broad enough to cover devices like this one. What matters most is that the sale is made under a prescription from a licensed healing-arts practitioner.

Accountants and tax professionals

This letter is a useful, general illustration of how Rule 3.284's therapeutic-device exemption applies even to a specific, non-enumerated product, so long as the definitional test is met and the prescription requirement is satisfied.

Common questions

Q: Is the V.E.T. system taxable when sold under a doctor's prescription?
A: No, per this letter — it qualifies as an exempt therapeutic device under Rule 3.284(a)(11) and (c)(8) when sold, leased, or rented under a prescription from a licensed practitioner of the healing arts.

Q: Would the device be taxable if sold without a prescription?
A: The exemption in Rule 3.284(c)(8) is expressly tied to a prescription from a licensed healing-arts practitioner; this letter doesn't address a non-prescription sale scenario.

Citations and references

Statutes and rules:

• 34 Tex. Admin. Code Rule 3.284(a)(11) (definition of therapeutic appliance or device)
• 34 Tex. Admin. Code Rule 3.284(c)(8) (exemption for prescribed therapeutic appliances/devices and related 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/9809844L

Original ruling text

September 24, 1998

Dear Mr. **:

Thank you for your recent letter concerning the taxability of the V.E.T.
system.

The V.E.T. (Vacuum Erection Technology) System is FDA registered and sold only
by prescription. The system is used to combat male impotence. You are asking
if these items are taxable when prescribed by a physician.

Response. Rule 3.284 addresses the taxability of medical equipment and
devices. Section (a)(11)states that a therapeutic appliance or device is any
item designed to alleviate pain or designed for use during the treatment or
cure of human sickness, disease, suffering, or deformity. The V.E.T discussed
above qualifies as a therapeutic device.

Section (c)(8) states that sales tax is not due on the sale, lease, or rental
of therapeutic appliances, devices, and related supplies specifically designed
for those products when sold, leased, or rented to individuals under a
prescription of a licensed practitioner of the healing arts.

Sales tax rules are available on the Internet
.

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

You may call me toll free at 1-800-531-5441, ext. 5-0613. The direct line is
512/475-0613. You may also write to Tax Policy Division, Comptroller of Public
Accounts.

Sincerely,

Kevin Koller
Tax Policy Division