TAA 19A-020R Medical, Prosthetic and Orthopedic Appliances, Prescriptions

QUESTION: Whether the rentals of a “Blood Coagulation Analyzer Model Sysmex CS-2500” and a “Coulter® DxH 800 Hematology Analyzer” are exempt from taxation? 

ANSWER: No, the rentals of a “Blood Coagulation Analyzer Model Sysmex CS-2500” and a “Coulter® DxH 800 Hematology Analyzer” are not exempt from taxation. 

January 27, 2023

Technical Assistance Advisement – TAA #: 19A-020R

_________ (“Taxpayer”)

Sales and Use Tax – Medical

Section 212.08, Florida Statutes (“F.S.”)

Rule 12A-1.020 Florida Administrative Code (“F.A.C.”)

FEI#: _________

BP #: _________

Dear _________: 

This is in response to your letter dated, July 30, 2019, requesting this Department’s issuance of a Technical Assistance Advisement (“TAA”) pursuant to Section(s.) 213.22, F.S., and Rule Chapter 12-11 F.A.C, Florida Administrative Code, regarding the matter discussed below. Your request has been carefully examined, and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, F.A.C. This response to your request constitutes a TAA and is issued to you under the authority of s. 213.22, F.S. 

REQUESTED ADVISEMENT 

Whether Taxpayer’s rentals of a “Blood Coagulation Analyzer Model Sysmex CS-2500” and a “Coulter® DxH 800 Hematology Analyzer” are exempt from taxation?

FACTS

The printouts attached to your e-mail explain that the automated Blood Coagulation Analyzer Model Sysmex CS-2500 is a cap-piercing model that measures blood samples while the tubes within which the blood is contained remain closed. This machine is used to test thrombotic tendency and for health monitoring. The testing parameters of the blood coagulation analyzer include eight (8) parameters of coagulation factors and testing parameters for chromogenic substrate, turbidimetric immunoassay, and agglutination. The Coulter® DxH 800 Hematology Analyzer is used for in-vitro diagnostic screening of patient populations in clinical laboratories and provides Complete Blood Cell (CBC) count, Leukocyte 5-Part Differential (Diff), Reticulocyte (Retic), and Nucleated Red Blood Cell (NRBC) per cent on whole blood.

The Department has learned the following:

The U.S. Food and Drug Administration (“FDA”) regulates things such as the test kits and devices at issue here under the Federal Food, Drug, and Cosmetic Act. 

• The Blood Coagulation Analyzer Model Sysmex CS-2500 can be found at the FDA’s website at: https://accessgudid.nlm.nih.gov/devices/00842768039522
• The Coulter® DxH 800 Hematology Analyzer can be found at the FDA’s website at: https://accessgudid.nlm.nih.gov/devices/15099590672423 
• By way of comparison, an exempt item, (A Thyroid Stimulating Hormone (TSH) test kit), listed in the Rule at issue can be found at the FDA’s website at: https://accessgudid.nlm.nih.gov/devices/20816467020086

LAW AND DISCUSSION 

Section 212.08, F.S., provides, in pertinent part: The sale at retail, the rental, the use, the consumption, the distribution, and the storage to be used or consumed in this state of the following are hereby specifically exempt from the tax imposed by this chapter. 

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(2) EXEMPTIONS; MEDICAL- 

(a) …. chemical compounds and test kits used for the diagnosis or treatment of human disease, illness or injury… 

Emphasis added

Rule 12A-1.020(7), F.A.C., states, in pertinent part: 

(a) The sale of chemical compounds and test kits used for the diagnosis or treatment of human disease, illness, or injury is exempt. The following is a nonexhaustive list of chemical compounds and test kits that are not subject to tax: 

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5. Blood analyzers, blood collection tubes, lancets, capillaries, test strips, tubes containing chemical compounds, and test kits to test human blood for levels of albumin, cholesterol, HDL, LDL, triglycerides, glucose, ketones, or other detectors of illness, disease or injury; … 

*** 

Emphasis added.

The rules of statutory construction are inapplicable here because s. 212.08(2)(a), F.S., is clear and unambiguous; however, it should be pointed-out that Florida courts have consistently held that exemptions must not be expanded beyond their express terms and must be strictly and narrowly construed against the taxpayer. State Department of Revenue v. Anderson, 403 So.2d 397, 399 (Fla. 1981); Green v. Pederson, 99 So.2d 292, 296 (Fla. 1957); Asphalt Pavers, Inc. v. Department of Revenue, 584 So.2d 55, 57 (Fla. 1st DCA 1991).

Section 212.08(2)(a), F.S., provides an exemption for test kits. Under an analysis of plain and ordinary language or referring to such sources as the FDA website, both the “Blood Coagulation Analyzer Model Sysmex CS-2500” and the “Coulter® DxH 800 Hematology Analyzer” are not test kits. Merriam-Webster’s dictionary defines “kit” as follows: “1a(1) : a collection of articles usually for personal use …” https://www.merriam-webster.com/dictionary/kit This should conclude our analysis of the question of whether or not the Blood Coagulation Analyzer Model Sysmex CS-2500 and Coulter® DxH 800 Hematology Analyzer are exempt from Florida Sales and Use Tax. 

Assuming there was any ambiguity in the term “test kits,” it would have to be interpreted narrowly and as an exception in light of the other exemptions it is listed with – none of which include the kind of immunoassay systems like the Blood Coagulation Analyzer Model Sysmex CS-2500 and the Coulter® DxH 800 Hematology Analyzer described here. Rule 12A-1.020(7)(a)5., F.A.C., provides a specific exemption from Florida Sales and Use Tax on the sale or rental of “blood analyzers.”

1. Although Rule 12A-1.020(7)(a)5., F.A.C., uses the term “blood analyzer,” that term must be read in the context of the entire rule (which provides that test kits are exempt from Florida Sales and Use Tax) and carries out the intent of the Legislature in s. 212.08(2)(a), F.S. (that only test kits are exempt from Florida Sales and Use Tax).

2. The Department does not view the Blood Coagulation Analyzer Model Sysmex CS-2500 and Coulter® DxH 800 Hematology Analyzer, as described, to be “blood analyzers” that would be exempt from Florida Sales and Use Tax because both the Blood Coagulation Analyzer Model Sysmex CS-2500 and Coulter® DxH 800 Hematology Analyzer, may analyze blood, neither fall into the larger and qualifying category of a test kit. 

CONCLUSION 

Taxpayer’s rentals of a “Blood Coagulation Analyzer Model Sysmex CS-2500” and a “Coulter® DxH 800 Hematology Analyzer” are not exempt from Florida Sales and Use Tax. 

This response constitutes a TAA under s. 213.22, F.S., which is binding on the Department only under the facts and circumstances described in the request for this advice, as specified in s. 213.22, F.S. Our response is predicated on those facts and the specific situation summarized above. You are advised that subsequent statutory or administrative rule changes, or judicial interpretations of the statutes or rules, upon which this advice is based, may subject similar future transactions to a different treatment than expressed in this response.

You are further advised that this response, your request and related backup documents are public records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions of s. 213.22, F.S. Confidential information must be deleted before public disclosure. In an effort to protect confidentiality, we request you provide the undersigned with an edited copy of your request for TAA, the backup material and this response, deleting names, addresses and any other details which might lead to identification of the Taxpayer. Your response should be received by the Department within ten (10) days of the date of this letter.

Leigh L. Ceci 

Tax Law Specialist 

Technical Assistance & Dispute Resolution