Tax Type
Retail Sales and Use Tax
Description
Therapeutic magnets; Medical, dental, and optical supplies and drugs
Topic
Taxability of Persons and Transactions
Date Issued
06-16-2000
June 16, 2000
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This will reply to your letter in which you seek a ruling on the application of the retail sales and use tax to certain products sold by ****** (the "Taxpayer"). I apologize for the delay in responding to your letter.
FACTS
The Taxpayer sells personal and homecare products through a network of distributors located in Virginia and throughout the United States. Under agreement with the department, the Taxpayer collects and remits the sales tax on behalf of its distributors in Virginia who resell the products to their customers in Virginia. The Taxpayer collects the tax on the suggested retail selling price of the products sold to the distributors.
The Taxpayer requests information on the application of the tax to therapeutic magnets. The therapeutic magnets are advertised to alleviate localized pain such as headaches, sport injuries, and other chronic pains by blocking electrical signals from the nerve cells in the body to the brain. The therapeutic magnets are applied to the area of pain by terrycloth bands and wraps or adhesive pads. The product is designed for use in the home and can withstand repeated use.
RULING
Code of Virginia § 58.1-609.7(2) provides an exemption from the sales and use tax for "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 defined in the statute as "equipment which (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.
At this time, I cannot determine that therapeutic magnets qualify for this exemption. Current research on this issue notwithstanding, magnets are not "primarily and customarily used to serve a medical purpose" as mandated. Accordingly, they are not durable medical equipment as envisioned in the statute, and the sale of these items by the Taxpayer to its distributors is not an exempt transaction under Code of Virginia § 58.1-609.7(2).
If you have additional questions, please contact *****, Office of Tax Policy, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OPT/22579T
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This will reply to your letter in which you seek a ruling on the application of the retail sales and use tax to certain products sold by ****** (the "Taxpayer"). I apologize for the delay in responding to your letter.
FACTS
The Taxpayer sells personal and homecare products through a network of distributors located in Virginia and throughout the United States. Under agreement with the department, the Taxpayer collects and remits the sales tax on behalf of its distributors in Virginia who resell the products to their customers in Virginia. The Taxpayer collects the tax on the suggested retail selling price of the products sold to the distributors.
The Taxpayer requests information on the application of the tax to therapeutic magnets. The therapeutic magnets are advertised to alleviate localized pain such as headaches, sport injuries, and other chronic pains by blocking electrical signals from the nerve cells in the body to the brain. The therapeutic magnets are applied to the area of pain by terrycloth bands and wraps or adhesive pads. The product is designed for use in the home and can withstand repeated use.
RULING
Code of Virginia § 58.1-609.7(2) provides an exemption from the sales and use tax for "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 defined in the statute as "equipment which (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.
At this time, I cannot determine that therapeutic magnets qualify for this exemption. Current research on this issue notwithstanding, magnets are not "primarily and customarily used to serve a medical purpose" as mandated. Accordingly, they are not durable medical equipment as envisioned in the statute, and the sale of these items by the Taxpayer to its distributors is not an exempt transaction under Code of Virginia § 58.1-609.7(2).
If you have additional questions, please contact *****, Office of Tax Policy, at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OPT/22579T
Rulings of the Tax Commissioner