Tax Type
Retail Sales and Use Tax
Description
Infusion pumps; Medical equipment
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
08-04-1989
August 4, 1989
Re: Request for Ruling: Sales and Use Tax
Dear*****************
This will reply to your letter dated May 30, 1989, in which you requested a ruling on the application of the sales and use tax to your client ("The Taxpayer").
FACTS
The Taxpayer designs, manufactures, and leases portable ambulatory infusion pumps ("the infusion pumps") which are utilized for the treatment of different infectious diseases and cancer. The infusion pumps are prescribed by physicians for specific patients whose medical conditions are such that using a conventional intravenous device would hinder that persons ability to maintain a normal productive life. The infusion pumps are effective in the treatment of cancer (e.g., chemotherapy infusion), acquired immune deficiency, peritonitis, cystic fibrosis, cellulitis, osteomyelitis, and other diseases.
The infusion pumps are appropriate for use in the home and are also used in the in the hospital environment since they give the patient mobility. The infusion pumps can withstand repeated use and the patient only has to refill the drug reservoir with the proper medication (dosage amounts are programmed released).
The Taxpayer asks specifically whether the infusion pumps qualify for exemption from the sales and use tax under Virginia Code §58.1-608(7)(b).
RULING
Virginia Code §58.1-608(7)(b), 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 [or leased] by or on behalf of an individual for use by such individual." (Emphasis added).
The term "[d]urable medical equipment" is defined in Va. Code §58.1-608(7)(b), as:
-
- [E]quipment 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.
- [E]quipment 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.
All purchases or leases (regardless of whether the item is durable medical equipment) by a nonprofit hospital or nursing home are not subject to the tax. However, purchases or leases of durable medical equipment not on behalf of a specific patient by for-profit hospitals, clinics, physicians, etc., are subject to the tax. See the enclosed copy of Commissioner's Ruling Letter dated January 4, 1989.
If you have any further questions, please contact us.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner