Did a ventilator system sold for use in a Utah medical facility qualify for the sales-tax exemptions for medicine or home medical equipment and supplies?
Apply this to your situation
This page answers the general question as of 2003. Ask about yours and see what current Utah tax law says, with citations.
Plain-English summary
Utah Private Letter Ruling 03-004 said the described ventilator system did not qualify for either of the medical-item sales and use tax exemptions discussed in the response.
The Commission said those two exemptions applied only to medicine and to home medical equipment or supplies.
A ventilator system sold for use in a medical facility was neither medicine nor home medical equipment or supplies under the ruling's analysis.
The product and request
The requester manufactured and serviced sophisticated medical equipment.
It asked about a ventilator system used to treat patients ranging from neonates and children to adults. The company said units generally sold for a redacted price range and that it had been charging and remitting sales tax on taxable customer sales.
After learning that another state treated the unit as exempt, the company asked whether Utah exempted the product as a therapeutic or prosthetic device.
The two exemptions considered
The Commission identified two Utah sales and use tax exemptions specifically applicable to medical items:
- Medicine.
- Home medical equipment or supplies.
The response did not cite those exemptions by statute number.
Why the ventilator did not qualify
The Commission framed the product as a ventilation system sold for use in a medical facility.
It concluded that the system did not fall within either medical exemption because it was neither medicine nor home medical equipment or supplies.
The response did not analyze a ventilator sold for home use, particular supplies, a prescription requirement, a rental, or a different purchaser.
Holding
On the facts presented:
- The ventilator system did not qualify for the medicine exemption.
- It did not qualify for the home-medical-equipment-or-supplies exemption.
- The sale for use in a medical facility was not exempt under either category discussed in the ruling.
What this means for you
Medical-equipment manufacturers and sellers
A therapeutic purpose alone did not establish an exemption. The Commission focused on whether the product fit the specific exempt categories.
Hospitals and healthcare facilities
Use in a medical facility did not make the ventilator exempt under the two medical-item exemptions considered.
Accountants and tax professionals
Check the current statutory definitions, purchaser, location of use, product configuration, and transaction type. This ruling's analysis was narrow and did not address several facts that could matter under later law.
Common questions
Q: Was the ventilator treated as medicine?
A: No.
Q: Was it treated as home medical equipment or supplies?
A: No. The ruling addressed a system used in a medical facility.
Q: Did the Commission recognize a general exemption for therapeutic or prosthetic devices?
A: No such broader exemption was identified in the response.
Q: Did another state's exemption control Utah's answer?
A: No. The Commission applied Utah's medical-item categories.
Q: Does the ruling decide the tax treatment of home-use ventilators?
A: No. The response addressed a ventilator system used in a medical facility.
Key source language
- Scope: “The sale of a ventilation system for use in a medical facility would not qualify under either of two exemptions from Utah sales and use tax that are specifically applicable to medical items.”
- Exempt categories: “these exemptions apply only to the sale of medicine and home medical equipment or supplies”
- Product result: “neither of which would include the NAME ventilation system.”
Citations and references
The official response did not cite a statute, regulation, or numbered administrative publication.
Source
- Landing page: Utah Private Letter Rulings
- Official ruling: Utah PLR 03-004
- Fetch note: the exact official URL returned HTTP 404 to a direct request and was then retrieved through Sofya.
Original ruling text
REQUEST LETTER
03-004
NAME
ADDRESS
PHONE
Re: Private Letter Ruling Medical Equipment
Qualification as Exempt from Sales/Use Tax
COMPANY (COMPANY), previously known as COMPANY, is a manufacturer and service provider of highly sophisticated, state of the art medical equipment. We are one of the largest and most diversified suppliers of medical systems and solutions to the health care industry. On behalf of our customers, as well as the need to remain competitive, we hereby seek a ruling on a NAME ventilator system used to treat a complete range of patient categories from neonate and pediatric to adult.
We have received notification from The Commonwealth of STATE that this unit is exempt in STATE and it spurs us to inquire of all state if this therapeutic or prosthetic device, which may be used by particular individuals to correct or alleviate a physical, is exempt from sales and/or use tax. We are contacting your area of expertise in order to receive a legally binding decision on the sale of such units within your state. To aid in your decision-making, we are attaching (as Schedule 1) a full description of our NAME ventilator system.
The cost of this unit is generally between $$$$$$ to $$$$$$; we have been billing our taxable customer sales tax accordingly and remitted these taxes to the State. COMPANY was unaware of any exclusion from sales tax on the sale of such medical equipment or the use thereon until a customer brought this potential to our attention.
I appreciate your review of this issue and request that you contact me as soon as a decision is made, by either mail (self-addressed envelope enclosed), telephone or fax (see information below). If you have any questions, or need any further clarification, please do not hesitate to call.
NAME
RESPONSE LETTER
April 14, 2003
NAME
ADDRESS
RE: Private Letter Ruling Taxability of NAME ventilation system
Dear NAME,
We have received your request for a private letter ruling concerning the sale of ventilation systems sold by COMPANY (�COMPANY�). Specifically, you ask if Utah has a sales tax exemption that applies to sales of this item.
The sale of a ventilation system for use in a medical facility would not qualify under either of two exemptions from Utah sales and use tax that are specifically applicable to medical items. Under Utah law, these exemptions apply only to the sale of medicine and home medical equipment or supplies, neither of which would include the NAME ventilation system.
Should you have any other questions, please contact us.
For the Commission,
Marc B. Johnson
Commissioner
MBJ/KC
03-004
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