Is an automated external defibrillator (AED) or its training system exempt from Utah sales tax when sold with a prescription?

Plain-English summary

A retail drugstore chain asked whether a specific product -- described as a battery-operated automated external defibrillator (AED) used to correct heart-rhythm abnormalities in cardiac emergencies -- would be exempt from Utah sales tax when a patient buys it with a written prescription. On reviewing the product literature, the Commission noted the item was actually a training system that simulates using the defibrillator without the real charge/discharge of electrical energy -- but ruled the distinction didn't matter, because both the defibrillator itself and its training system are taxable for the same reasons.

The ruling landed at a moment when Utah's medical-equipment exemption was changing. Before July 1, 2004, Utah exempted "home medical equipment or supplies" under Utah Code § 59-12-102(12). Effective July 1, 2004, that exemption was replaced with one for "durable medical equipment" under § 59-12-102(23). Both versions share the same gatekeeping requirement: to qualify, the product must be eligible for payment under Title XVIII (Medicare) or Title XIX (Medicaid) of the federal Social Security Act. The Commission checked with the Division of Health Care Financing at the Utah Department of Health and confirmed neither defibrillators nor their training systems are eligible for payment under either federal program. That knocked out the exemption under both the old and new versions of the law.

The Commission also considered -- and rejected -- Utah's separate exemption for "medicine" (pre-2004) and "drug" (post-2004): defibrillators and training systems simply don't fall into either category. So regardless of the prescription, and regardless of which side of the July 1, 2004 statutory change the sale falls on, both products are subject to Utah sales and use tax.

What this means for you

Retailers of medical devices and emergency equipment

A written prescription alone doesn't make a device exempt. Check whether the specific product is eligible for Medicare/Medicaid payment -- that federal-program eligibility test, not the prescription, is what actually drives the state exemption.

Pharmacies and drugstores selling AEDs or similar emergency medical devices

Defibrillators and their training/simulation systems are taxable regardless of whether you're selling the functional device or a non-charging trainer version -- the Commission treats them the same for sales tax purposes.

Businesses tracking Utah's medical equipment exemption across the 2004 statutory change

The underlying eligibility test (Medicare/Medicaid payment eligibility) carried over from the old "home medical equipment or supplies" exemption to the new "durable medical equipment" exemption -- a product that failed the test before July 1, 2004 will generally still fail it after.

Common questions

Q: Does a written prescription make an AED defibrillator exempt from Utah sales tax?
A: No. The prescription doesn't matter -- what matters is whether the product is eligible for payment under Medicare or Medicaid, and defibrillators aren't.

Q: Is an AED training/simulation system taxed the same as the actual defibrillator?
A: Yes. The Commission found both taxable for the same reason, regardless of whether the unit actually delivers an electrical charge.

Q: Does Utah's "medicine" or "drug" sales tax exemption cover defibrillators?
A: No, defibrillators and their training systems don't fall within the definition of medicine or a drug.

Q: How did the July 1, 2004 change from "home medical equipment" to "durable medical equipment" affect this analysis?
A: The core eligibility requirement -- Medicare/Medicaid payment eligibility -- stayed the same across the change, so the outcome (taxable) didn't change either.

Q: Can another retailer rely on this ruling for a similar medical device?
A: No -- it binds the Commission only for the taxpayer and product described here. Retailers should confirm a specific product's Medicare/Medicaid eligibility and exemption status with the Commission or a Utah tax professional.

Citations and references

Statutes cited:

• Utah Code Ann. § 59-12-102(12) (home medical equipment or supplies exemption, in effect before July 1, 2004)
• Utah Code Ann. § 59-12-102(23) (durable medical equipment exemption, effective July 1, 2004)

Source

• Landing page: https://tax.utah.gov/commission/rulings/
• Original PDF: https://files.tax.utah.gov/tax/commission/ruling/04-004.pdf

Original ruling text

**REQUEST LETTER **

04-004

NAME

ADDRESS

The COMPANY, a retail drugstore chain requests a written opinion regarding the sales taxability on the following medical equipment:

BRAND NAME CR Plus AED Training System � It is a battery operated external defibrillator used in cardiac emergencies to correct abnormalities in the heart's electrical system. Would this product be exempt from sales tax if a patient purchases it with a written prescription?

Enclosed you will find more information regarding the BRAND NAME CR.

Thank you for your assistance in this matter.

NAME

**RESPONSE LETTER **

March 19, 2004

NAME

ADDRESS

RE: Private Letter Ruling Request � Taxability of BRAND NAME CR-T Automated External Defibrillator Training System

Dear NAME,

You have asked the Commission whether the sale of a �BRAND NAME CR Plus AED Training System� is exempt from Utah sales and use tax. You describe this item as a defibrillator used to correct heart abnormalities. However, upon reading the literature you provide, the BRAND NAME CR-T AED Training System appears to be an instrument that provides realistic training in the use of a BRAND NAME CR Plus defibrillator without the actual charge and discharge of electrical energy. Regardless of whether it is the defibrillator or the training system that is sold, the taxability is the same. Both items are taxable under Utah law, as explained below.

Prior to July 1, 2004, Utah provides a sales tax exemption for items that meet the definition of �home medical equipment or supplies,� as found in Utah Code Ann. §59-12-102(12). Effective July 1, 2004, however, the exemption for home medical equipment or supplies has been eliminated. Instead, an exemption for �durable medical equipment,� as defined in Section 59-12-102(23), has been implemented. To qualify as either �home medical equipment or supplies� or �durable medical equipment,� the products must be eligible for payment under Title XVIII of the federal Social Security Act or the state plan for medical assistance under Title XIX of the federal Social Security Act. After conferring with the Division of Health Care Financing at the Utah State Department of Health, we have learned that neither defibrillators nor their trainings systems are eligible for payment under either of the titles described above. Therefore, these products are not exempt from Utah sales and use tax.

Although Utah provides an exemption from taxation for the sale of �medicine� (prior to July 1, 2004) and for a �drug� (on or after July 1, 2004), neither classification includes defibrillators, their training systems, or similar items. Again, the Commission finds that these products are subject to Utah sales and use tax regardless of the change in law that occurs on July 1, 2004. If you have any other questions, please let us know.

For the Commission,

Marc B. Johnson

Commissioner

MBJ/KC

04-004