Prescription Drugs
Prescription drugs are defined as medication, oxygen, or insulin intended to be dispensed to an ultimate user pursuant to a prescription drug order or medication order from a practitioner. This means that any drug requiring a prescription is exempt upon a doctor’s order, whether or not there is actually a prescription; for example, drugs administered in an emergency situation. "Doctors" include, but are not limited to, dentists, optometrists, chiropractors, podiatrists, osteopaths, and advanced registered nurse practitioners, as well as medical doctors.
Also included within the meaning of prescription drug is any drug or medication dispensed under a prescription, even if there is no requirement for a prescription. For example, a doctor writes a prescription detailing dosage and intervals for 200 mg tablets of ibuprofen. If a pharmacist fills and labels the order, it is exempt from sales tax. If the pharmacist instructs a person to choose ibuprofen sold "over the counter," it is a taxable sale.
Ultimate User
In order for prescription drugs or medical devices to be exempt from sales or use tax, the sale or rental must be to an ultimate user. An "ultimate user" is an individual who has lawfully obtained and possesses a prescription drug or medical device. An ultimate user cannot be a corporation or partnership. The drug or device must be prescribed, dispensed, or administered for placement on or into the body of the ultimate user to be exempt.
For example, a wheelchair prescribed for human use and sold by a medical supply store to an individual is exempt from tax. A sale of a wheelchair to a medical clinic for its own use is subject to tax because the clinic is not the ultimate user. The ultimate user must be an individual.
Prescription Not Required
The following is a non-exclusive list of items exempt from sales tax with or without a prescription, when dispensed for human use:
- Anesthesia trays
- Biopsy trays and needles
- Cannula systems
- Catheter trays and invasive catheters
- Diabetic testing materials
- Dialysis machines
- Dialyzers
- Drug infusion devices
- Fistula sets
- Hemodialysis devices
- Hypodermic syringes and needles
- Insulin
- Insulin infusion devices
- Irrigation solutions
- Intravenous administering sets, solutions and stopcocks
- Myelogram trays
- Nebulizers
- Oxygen
- Oxygen equipment
- Rental of oxygen equipment
- Small vein infusion kits
- Spinal puncture trays
- Transfusion sets
- Venous blood sets
- Video capsules/capsule endoscopes
Durable Medical Equipment
Sales or rental of durable medical equipment prescribed for human use are exempt from sales tax.
"Durable medical equipment" means equipment, including repair and replacement parts, to which all of the following apply:
- Can withstand repeated use
- Is primarily and customarily used to serve a medical purpose
- Generally is not useful to a person in the absence of illness or injury
- Is not worn in or on the body
- Is for home use only
- Is prescribed by a practitioner
Mobility Enhancing Equipment
Sales or rental of mobility enhancing equipment prescribed for human use are exempt from sales tax.
"Mobility enhancing equipment" means equipment, including repair and replacement parts, to which all of the following apply:
- Is primarily and customarily used to provide or increase the ability to move from one place to another and which is appropriate for use either in a home or a motor vehicle
- Is not generally used by persons with normal mobility
- Does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.
- Is prescribed by a practitioner
Prosthetic Devices
"Prosthetic device" means a replacement, corrective, or supportive device including repair and replacement parts worn on or in the body to do any of the following:
- Artificially replace a missing portion of the body
- Prevent or correct physical deformity or malfunction
- Support a weak or deformed portion of the body
The term "prosthetic device" includes, but is not limited to, orthopedic or orthotic devices, ostomy equipment, urological equipment, tracheostomy equipment, and intraocular lenses.
The following is a nonexclusive list of exempt prosthetic devices. They are exempt with or without a prescription.
- Artificial arteries
- Artificial breasts
- Artificial ears
- Artificial eyes
- Artificial heart valves
- Artificial implants
- Artificial larynx
- Artificial limbs
- Artificial noses
- Artificial teeth
- Cardiac pacemakers
- Contact lenses
- Cosmetic gloves
- Dental bridges and implants
- Drainage bags
- Hearing aids
- Ileostomy devices
- Intraocular lenses
- Karaya paste
- Karaya seals
- Organ implants
- Ostomy belts
- Ostomy clamps
- Ostomy cleaners and deodorizers
- Ostomy pouches
- Ostomy stoma caps and paste
- Penile implants
- Prescription eyeglasses
- Stoma bags
- Tracheal suction catheters
- Tracheostomy care and
- cleaning starter kits
- Tracheostomy cleaning
- brushes
- Tracheostomy tubes
- Urinary catheters
- Urinary drainage bags
- Urinary irrigation tubing
- Urinary pouches
Orthotic and Orthopedic Devices
An "orthotic device" is defined as a piece of special equipment designed to straighten a deformed or distorted part of the human body, such as corrective shoes or braces. An orthotic device is an orthopedic device.
An "orthopedic device" is a piece of special equipment designed to correct deformities or to preserve and restore the function of the human skeletal system, its articulations and associated structures. A hot tub or spa is not an orthopedic device.
Following is a nonexclusive list of orthotic / orthopedic devices exempt from tax.
- Abdominal belts
- Alternating pressure mattresses
- Alternating pressure pads
- Anti-embolism stockings
- Arch supports
- Arm slings
- Artificial sheepskin
- Bone cement
- Bone nails
- Bone pins
- Bone plates
- Bone screws
- Bone wax
- Braces
- Canes
- Casts
- Cast heels
- Cervical braces
- Cervical collars
- Cervical pillows
- Clavicle splints
- Corrective braces
- Corrective shoes
- Crutch cushions
- Crutch handgrips
- Crutch tips
- Crutches
- Decubitus prevention devices
- Dorsolumbar belts
- Dorsolumbar supports
- Elastic bandages
- Elastic supports
- Exercise devices
- Head halters
- Hernia belts
- Iliac belts
- Invalid rings
- Knee immobilizers
- Lumbosacral supports
- Muscle stimulators
- Nerve stimulators
- Orthopedic implants
- Orthopedic shoes
- Patient lifts
- Plaster (surgical)
- Rib belts
- Rupture belts
- Sacroiliac supports
- Sacrolumbar belts
- Sacrolumbar supports
- Shoulder immobilizers
- Space shoes
- Splints
- Traction equipment
- Transcutaneous electrical
- nerve stimulators (tens units)
- Trapezes
- Trusses
- Walkers
- Wheelchairs
Related Devices
Sales or rental of devices which are used exclusively in conjunction with prosthetic, orthotic, or orthopedic devices are exempt from tax.
Power Devices
Sales or rental of power devices especially designed to operate prosthetic, orthotic, or orthopedic devices are exempt from tax. This exemption does not include batteries which can be used to operate a number of devices, but batteries designed solely for use in hearing aids are exempt.
Purchases and Sales for Resale
Medical clinics and similar businesses may make rentals or purchases tax-free for resale to patients if the following circumstances are met:
- The drug, device, or other property is actually transferred to the patient;
- The drug, device, or property is transferred in a form or quantity capable of a fixed or definite price value;
- The medical clinic and the patient intend the transfer to be a sale; and
- The sale is separately itemized on the patient’s bill.
For example, a medical clinic may not purchase surgical knives and blades for resale because the patient does not take possession of them, and there is no intent by either the medical clinic or the patient for a sale to occur. On the other hand, a medical clinic may purchase a box of tissues for resale if all four conditions listed above are met.