Tax Type
Retail Sales and Use Tax
Description
Birth control implant device does not meet requirements for exemption
Topic
Exemptions
Date Issued
04-26-2007
April 26, 2007
Re: Request for Ruling: 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 a birth control device by your client, (the "Taxpayer").
FACTS
The Taxpayer manufacturers and sells a medical birth control device. The device is designed to provide an alternative to incisional methods of tubal ligation for women seeking permanent contraception.
The birth control device consists of a micro-insert, a disposable delivery system and a disposable split introducer. A gynecologist places one micro-insert in the proximal section of each fallopian tube lumen. When the micro-insert expands upon release, it remains anchored in the fallopian tube and results in permanent birth control. The birth control device has received Federal Food and Drug Administration approval for commercial distribution.
RULING
Virginia Code § 58.1-609.10 10 provides an exemption from the retail sales and use tax for durable medical equipment and devices, and related parts and supplies specifically designed for those products when such items 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 products 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.
Based on the information provided, the permanent birth control device does not meet criteria (i) and (iv) because the device cannot withstand repeated use and is not appropriate for use in the home, as the device must be implanted by a trained medical practitioner. While I recognize that the birth control device represents new technology and is used to provide a permanent contraception option for women, the device does not meet all of the mandatory requirements set out in the exemption statute. Absent the statutory authority, I am unable to grant an exemption from the retail sales and use tax in this instance.
This ruling is 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 section cited, along with other reference documents, are available on-line at www.tax.virginia.gov in the Tax Policy Library of the Department's
website. If you have any questions about this ruling, you may contact ***** in the Office of Policy and Administration, Appeals and Rulings, at *****.
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- Sincerely,
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- Janie E. Bowen
Tax Commissioner
- Janie E. Bowen
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AR/1-1048631835.i
Rulings of the Tax Commissioner