Tax Type
Retail Sales and Use Tax
Description
Incontinence pads sold to for-profit hospital; Durable medical equipment versus supplies
Topic
Taxability of Persons and Transactions
Date Issued
06-24-1987
June 24, 1987
Re: Ruling Request/ Sales and Use Tax
Dear ******************
This will reply to your letter of March 23, 1987 seeking a ruling on the application of the sales and use tax to certain incontinent pads sold to for profit hospitals by ************** (taxpayer).
FACTS
According to your letter in connection with the marketing of their low air loss hospital beds, the taxpayer also provides several bed accessories, such as trapeze bars, bed rails, traction sets, as well as incontinence pads and special bed sheets. The taxpayer bills its client hospitals on a per day basis for each of the beds being used, inclusive of the accessories. However, an additional amount is billed on a per item basis for any excessive use of the incontinence pads. It is our understanding that the incontinence pads sold by the taxpayer are not designed for repeated use.
RULING
§58.1-608(22) of the Virginia Code 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 equipment which (1) can withstand repeated use, (2) is primarily and customarily used to serve a medical purpose, (3) generally is not useful to a person in the absence of illness or injury, and (4) is appropriate for use in the home.
Furthermore, §630-10-65(F) of the Virginia Retail Sales and Use Tax Regulations provides that "the fact that an item is purchased from a medical equipment supplier is not dispositive of its exempt status, the item must satisfy the definition of durable medical equipment."
Since the incontinence pads described above are not designed for repeated use, they do not qualify for the durable medical equipment exemption cited above. Therefore, such items are subject to the tax when purchased by for profit hospitals and nursing homes even if they are purchased on behalf of specific patients or individuals.
In accordance with your request a copy of this ruling will be forwarded to************* at the address indicated below.
I hope that the foregoing has responded to your question but please let me know if you have any further questions.
Sincerely.
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner