Tax Type
Retail Sales and Use Tax
Description
Equipment and Devices; Liquid Nutrients and Ostomy Supplies
Topic
Taxability of Persons and Transactions
Date Issued
03-11-1991
March 11, 1991
Re: Request for Ruling: Sales and Use Tax
Dear****************
This will reply to your letter dated March 12, 1990 in which you request a ruling on the application of the sales and use tax to certain medical equipment and supplies.
FACTS
You request clarification on the application of the sales and use tax to supplies used with enteral and parenteral feeding equipment and ostomy equipment.
You contend that liquid nutrients qualify as supplies for use with enteral and parenteral feeding equipment and are exempt from the tax since the pump, tubes, containers, etc. would be of no benefit to the patient without the nutrient. You further maintain that durable medical equipment dealers have a class 6 pharmacy license which gives them the legal authority to dispense exempt medicines and drugs.
You also contend that tapes, sponges, etc. used with any ostomy product are exempt from the tax because they are supplies related to the use of a prosthetic device.
RULING
Enteral and Parenteral Nutritional Products. Va. Code § 58.1-608(7)(a) provides an exemption from the sales and use tax for "[m]edicines, drugs,...dispensed by or sold on prescriptions or work orders of licensed physicians." Under both the Virginia Drug Control Act and the Federal Food, Drug, and Cosmetic Act, the definition of the term drug specifically excludes food. Thus, enteral nutrients are not exempt from the tax as medicines or drugs within the meaning of Va. Code § 58.1-608(7)(a) since they are special dietary foods.
Va. Code § 58.1-608(7)(b) provides an exemption for "prosthetic devices...and other 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." Virginia Regulation 630-10-65 (copy enclosed) includes within a listing of exempt durable medical equipment "enteral and parenteral feeding equipment and supplies (tubes, pumps, containers)."
As provided in the statute, in order for supplies used with prosthetic devices and durable medical equipment to be exempt from the tax, they must be sold specifically for use with such equipment. The only items that would be exempt from the tax when used for enteral or parenteral feeding include the containers, pumps, tubes, etc. which are specifically designed for enteral or parenteral feeding. Thus, nutritional products that are sold specifically for use with enteral or parenteral feeding equipment qualify for exemption. However, nutritional products which are sold as dietary supplements for oral consumption are taxable.
Ostomy Supplies. As provided above, only supplies specifically designed for ostomy products are exempt of the tax. Because tapes, sponges, etc. are general purpose items and are not designed specifically for use with an ostomy product, they are not exempt supplies.
I hope this clarifies the application of the tax in these situations. However, please contact the department if you need further clarification.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner