Which cardiology and radiology products qualified for Virginia's medical-equipment sales-tax exemptions?

Subject

To qualify as exempt durable medical equipment, the product must meet the criteria

Plain-English summary

Virginia divided the seller's medical products into exempt, conditionally exempt, and taxable groups based on the statutory category and how each item was used. A medical label or physician's prescription did not automatically make a product exempt.

The listed extraction, support, diagnostic, and other catheters were exempt, as were the named hemostats, guidewire, catheter cover, seal, clamp, introducer kits, and other supplies specifically related to catheters. Vari-Lase Compression Stockings also qualified because the Department found that they met all four durable-medical-equipment criteria.

Those four criteria required equipment that could withstand repeated use, primarily served a medical purpose, generally was not useful without illness or injury, and was appropriate for home use. The item also had to be purchased by or on behalf of an individual for that individual's use.

The Auto-Fill and Vaclock syringes were exempt only when dispensed by or sold on a licensed physician's prescription or work order. By contrast, the Vari-Lase console and related procedure products, the Klein pump and kits, and other physician-facility items failed the home-use requirement. Laser eyewear and the console case had no applicable exemption, while the abdominal retraction belt also failed repeated-use and home-use requirements.

Patient brochures qualified only when stored in Virginia for no more than 12 months and distributed outside Virginia. Brochures sent to Virginia customers or stored in Virginia longer were taxable.

What this means for you

• Classify each product under the exact statutory language; do not rely only on where it is sold or whether a doctor orders it.
• For durable medical equipment, document all four criteria and the purchase for a specific individual's use.
• A hospital- or physician-only device can fail because it is not appropriate for home use.
• Supplies specifically designed for an exempt catheter may qualify even when they are not themselves durable equipment.

Common questions

Were all products used in catheter procedures exempt? No. Catheters and specifically related supplies were exempt, but separately listed laser equipment, kits, eyewear, and storage items were taxable.

Did a prescription make every product exempt? No. The ruling said prescription status was not dispositive for durable medical equipment, though the two hypodermic syringes required a physician's prescription or work order under their separate exemption.

Were the patient brochures exempt? Only when stored in Virginia for 12 months or less and distributed for use outside Virginia.

Citations and references

• Va. Code § 58.1-609.10(9) and (10).
• Va. Code § 58.1-609.6(4).
• 23 VAC 10-210-940(F).
• P.D. 89-287 (November 27, 1989) and P.D. 84-196 (November 22, 1984).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 08-28

Original ruling text

April 2, 2008

Re: Ruling Request: Retail Sales and Use Tax

Dear *:

This will reply to your letter in which you request a ruling on the application of the retail sales and use tax to the sale of various medical products by * (the "Taxpayer").

FACTS

The Taxpayer sells various medical products for use by cardiologists and radiologists. The Taxpayer requests a ruling on the application of the retail sales and use tax to the products.

RULING

Generally

Virginia Code § 58.1-609.10 10 provides an exemption for "[w]heelchairs and parts therefor, braces, crutches, prosthetic devices, orthopedic appliances, catheters, urinary accessories, other durable medical equipment and devices, and related parts and supplies specifically designed for those products . . . when such items or parts are purchased by or on behalf of an individual for use by such individual. Durable medical equipment is equipment that (i) can withstand repeated use, (ii) is primarily and customarily used to serve a medical purpose, (iii) generally is not useful to a person in the absence of illness or injury, and (iv) is appropriate for use in the home."

In order to qualify as exempt durable medical equipment, the product must meet the four criteria provided above and the product must be purchased by or on behalf of an individual for use by such individual. The fact that an item is purchased from a medical equipment supply store or is purchased on a physician's prescription is not dispositive of its exempt status. See Title 23 of the Virginia Administrative Code (VAC) 10-210-940 F.

Exempt products

Based on the information provided, the following items may qualify for exemption from the retail sales and use tax pursuant to Va. Code § 58.1-609.10 10 because they are classified as catheters or related parts and supplies specifically designed for those products.

D-Stat Flowable

The D-Stat Flowable hemostat is delivered topically from a syringe to control surface bleeding from vascular access sites and percutaneous catheters and tubes. The D-Stat Flowable is exempt because it is a related supply to a catheter.

D-Stat Dry

The D-Stat Dry hemostat bandage is a dry hemostatic gauze pad with an adhesive bandage that quickly clots blood. The D-Stat Dry is exempt as a related supply to a catheter.

D-Stat Radial

The D-Stat Radial is a hemostatic band designed to be used after catheterization to assist in the hemostasis process. The D-Stat Radial is exempt because it is a related supply to a catheter.

D-Stat Clamp

The D-Stat Clamp is a handle designed to be used with the other D-Stat products to reduce hand fatigue from the physical demand required of manual compression. The D-Stat Clamp is exempt because it is a related supply to a catheter.

ThrombiGel

The ThrombiGel is a foam hemostat that is applied topically and is indicated as a trauma dressing for control of surface bleeding from percutaneous catheters and tubes. The ThrombiGel is exempt because it is a related supply to a catheter.

Pronto Extraction Catheter

The Pronto Extraction Catheter is an extraction catheter system for the removal of soft thrombus from the arterial system. Virginia Code § 58.1-609.10 10 clearly exempts catheters purchased for specific individuals. The Department has previously addressed the application of the tax to intravenous catheter systems, similar to those sold by the Taxpayer, in Public Document (P.D.) 89-287 (11/27/89). The ruling included catheter devices and supplies as items that constitute durable medical equipment. In addition, P.D. 84-196 (11/22/84) provides a list of durable medical equipment that is exempt from the tax and includes catheter devices and supplies. The list is also contained in the Department's regulation on durable medical equipment found in Title 23 VAC 10-210-940.

Pronto .035" Extraction Catheter

The Pronto .035" Extraction Catheter is a dual lumen, over the wire, catheter. The Pronto .035" Extraction Catheter is exempt from retail sales and use tax.

Pronto Short

The Pronto Short is an extraction catheter designed to accommodate multiple guidewires. The Pronto Short catheter is exempt from retail sales and use tax.

Pronto V3

The Pronto V3 is an extraction catheter designed to accommodate multiple guidewires. The Pronto V3 catheter is exempt from retail sales and use tax.

Pronto LP

The Pronto LP is an extraction catheter designed to accommodate multiple guidewires. The Pronto LP catheter is exempt from retail sales and use tax.

Langston Dual Lumen Pigtail Catheter

The Langston Dual Lumen Pigtail Catheter is for simultaneous pressure measurement from two sites. The Langston Dual Lumen Pigtail Catheter is exempt from retail sales and use tax.

Twin-Pass (Twin-Pass.023)

The Twin-Pass is a catheter designed to access discreet regions of the coronary and peripheral arterial vasculature. The Twin-Pass catheter is exempt from retail sales and use tax.

Skyway

The Skyway support catheters are intended to be used in conjunction with catheter guidewires in order to access arterial regions. The Skyway is exempt because it is a related supply to a catheter.

Duett

The Duett is a sealing device for arterial puncture sites. The device consists of two components, a balloon catheter and a biological flowable procoagulant. Based on the literature provided by the Taxpayer, the Duett is exempt from retail sales and use tax.

Micro-Inducer Kits

The Micro-Inducer Kits are intended to introduce up to a 0.038 inch guidewire or catheter into the vascular system. The Micro-Inducer Kits are exempt because they are a related supply to a catheter.

Guidewire

The Guidewire is a long, flexible, spring used to introduce and position an intravascular catheter. The Guidewire is exempt because it is a related supply to a catheter.

lnnerChange Catheter

The InnerChange Catheter is designed to be used for delivery of radiopaque media to selected sites in the vascular system in conjunction with routine diagnostic procedures. The InnerChange catheter is exempt from retail sales and use tax.

Gopher Support Catheters

The Gopher Support Catheters are used in conjunction with guidewires to access regions of the arterial vasculature. The Gopher Support catheters are exempt from retail sales and use tax.

Guardian HV

The Guardian HV is intended to minimize blood loss during catheterization. The device forms a seal around the catheter during the catheterization process. The Guardian HV is exempt from retail sales and use tax as a supply related to a catheter.

Calucci Catheter Cover

The Calucci Catheter Cover provides a water resistant barrier to protect an exposed catheter. The Calucci Catheter Cover is exempt because it is a related supply to a catheter.

Vari-Lase Compression Stockings

The Vari-Lase Compression Stockings provide graduated medical compression for post-operative patients. Based on the statute and the literature provided by the Taxpayer, the Vari-Lase Compression Stockings satisfy the criteria for durable medical equipment. Therefore, the Vari-Lase Compression Stockings qualify for exemption from the retail sales and use tax under Va. Code § 58.1-609.10 10.

Exempt products - dispensed by, prescription by a licensed physician

Auto-Fill Syringe

The Auto-Fill Syringe is for the introduction of lidocaine solutions into tissue for the purpose of local anesthesia. Virginia Code § 58.1-609.10 9 provides an exemption for hypodermic syringes "dispensed by or sold on prescriptions or work orders of licensed physicians . . . ." Based on the statute and literature provided by the Taxpayer, the Auto-Fill Syringe is exempt from retail sales and use tax provided it is dispensed by or sold on a prescription or work order of a licensed physician.

Vaclock Syringe

The Vaclock Syringe maintains negative pressure through a twist and lock motion. Virginia Code § 58.1-609.10 9 provides an exemption for hypodermic syringes "dispensed by or sold on prescriptions or work orders of licensed physicians . . . ."Based on the statute and literature provided by the Taxpayer, the Vaclock Syringe is exempt from retail sales and use tax provided it is dispensed by or sold on a prescription or work order of a licensed physician.

Taxable products

Max-Support Abdominal Retraction Belt

The Max-Support Abdominal Retraction Belt is a tape free method of lifting the abdomen of obese patients allowing access to the femoral crease. Based on the statute and the literature provided by the Taxpayer, the Max-Support Abdominal Retraction Belt does not meet criteria (i) and (iv) for exempt durable medical equipment because the device cannot withstand repeated use and is not appropriate for use in the home. Accordingly, this product does not qualify for exemption from the retail sales and use tax because it does not meet all of the mandatory requirements set out in the exemption statute.

Vari-Lase Console

The Vari-Lase Console is a solid state diode laser console. Based on the statute and the literature provided by the Taxpayer, the Vari-Lase Console does not meet criteria (iv) for exempt durable medical equipment because the device is not appropriate for use in the home, as the device must be used by a trained physician. Therefore, the sale of this product is taxable unless another exemption is applicable ( e.g. , resale exemption).

Vari-Lase Endovenous Laser Procedure Kit

The Vari-Lase Endovenous Laser Procedure Kit is for the treatment of varicose veins. The kit contains various items for use with the Vari-Lase Console. Based on the literature provided by the Taxpayer, the Vari-Lase Endovenous Laser Procedure Kit does not meet criteria (iv) for exempt durable medical equipment because the kit is not appropriate for use in the home, as the kit must be used by a trained physician in conjunction with the Vari-Lase Console. The sale of this product is taxable unless another exemption is applicable ( e.g. , resale exemption).

Vari-Lase Procedure Pack

The Vari-Lase Procedure Pack is a pack of sterile accessories designed to be used with the Vari-Lase Console. The Vari-Lase Procedure Pack does not meet criteria (iv) for exempt durable medical equipment because the procedure pack is not appropriate for use in the home, as the pack must be used by a trained physician in conjunction with the Vari-Lase Console. The sale of this product is taxable unless another exemption is applicable ( e.g. , resale exemption).

Vari-Lase Bright Tip

The Vari-Lase Bright Tip is an endovenous laser procedure kit used in conjunction with the Vari-Lase Console. This product does not meet criteria (iv) for exempt durable medical equipment because the product is not appropriate for use in the home, as the product must be used by a trained physician in conjunction with the Vari-Lase Console. The sale of this product is taxable unless another exemption is applicable ( e.g. , resale exemption).

Laser Protection Eyewear

The Laser Protection Eyewear is used when performing endovenous laser therapy with the Vari-Lase Console. The Taxpayer's sale of Laser Protection Eyewear is subject to the retail sales and use tax. The Code of Virginia does not provide an exemption for the sale of laser protection eyewear.

Laser Console Case

The Laser Console Case is a hard case used to store the Vari-Lase Console. The Taxpayer's sale of Laser Console Cases is subject to the retail sales and use tax. The Code of Virginia does not provide an exemption for the sale of Laser Console Cases.

HK Surgical Klein Pump Il

The HK Surgical Klein Pump II is an infiltration pump designed for delivering local anesthesia. Based on the information provided, the HK Surgical Klein Pump II does not meet criteria (iv) for exempt durable medical equipment because the product is not appropriate for use in the home, as the product must be used by a trained physician in a medical facility. The sale of this product is taxable unless another exemption is applicable ( e.g. , resale exemption).

Klein Infiltration Kits

The Klein Infiltration Kits consist of sterilized, one-time use tubing for use with the Klein Infiltration Pump. This product does not meet criteria (iv) for exempt durable medical equipment because it is not appropriate for use in the home, as the product must be used by a trained physician in a medical facility. The sale of this product is taxable unless another exemption is applicable ( e.g. , resale exemption).

Other products

Vari-Lase Patient Brochures

The Vari-Lase Patient Brochures are sold to the Taxpayer's customers, who in turn put them on display for their customers. Virginia Code § 58.1-609.6 4 provides an exemption from the retail sales and use tax for "[c]atalogs, letters, brochures, reports, and similar printed materials, except administrative supplies, the envelopes, containers and labels used for packaging and mailing same . . . when stored for 12 months or less in the Commonwealth and distributed for use without the Commonwealth."

The printed materials that are stored for less than 12 months in Virginia and distributed outside Virginia qualify for exemption under Va. Code § 58.1-609.6 4. Conversely, the tax does apply to: (1) brochures that will be sent to customers within Virginia, and (2) brochures that will be stored by the Taxpayer within Virginia for more than twelve months.

The responses in this letter are based on the facts presented as summarized above. Any change in the facts or the introduction of new facts may lead to a different result.

The Code of Virginia sections, regulation and public documents cited, along with other reference documents, are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's website. If you have any questions about this letter, you may contact the Department's Office of Tax Policy, Appeals and Rulings, at *.

Sincerely,

Janie E. Bowen

Tax Commissioner

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