TAA 23A-001 Medical

QUESTION: Are Taxpayer’s sales of _________ (“Product”) exempt from Florida Sales and Use Tax when sold at retail in Florida? 

ANSWER: Yes. Since Product carries a prescription label and is intended for use on a single patient and is not intended to be reusable, Taxpayer’s sales of Product at retail in Florida would be exempt from Florida Sales and Use Tax. 

January 18, 2023

Technical Assistance Advisement – TAA #: 23A-001

_________ (“Taxpayer”)

Sales and Use Tax – Medical Product

Sections: 212.05 and 212.08(2), Florida Statutes - (“F.S.”)

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

BP #: _________

FEI#: _________

Dear _________: 

This is in response to your email dated November 28, 2022, 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 

Are Taxpayer’s sales of _________ (“Product”) exempt from Florida Sales and Use Tax when sold at retail in Florida?

Stated Facts 

Taxpayer sells medical products to hospitals located in Florida. Taxpayer is registered as a dealer to collect and remit Florida sales tax. 

In a previous TAA request made by Taxpayer which was dated April 20, 2022, Taxpayer provided the following information regarding Product:

“Product is used to guide the coils and other products in the  _________ system to the location within the body where the coils and other products will be housed. Product is a one-time use item. Product is not inserted into the body, and Product does not stay in the body. Product is not a prescription product.”

In a revised TAA request made by Taxpayer which was dated November 28, 2022, Taxpayer now provides the following information regarding Product: 

“Product is a one-time use item. Product’s packaging is labeled with the ‘RX-Only’ description. Product is used by licensed practitioners to guide the coils and other products in the _________ system to the location within the body where the coils and other products will be housed inside the body. Product does not stay in the body.”

Law and Discussion 

Unless a specific exemption applies, s. 212.05, F.S., provides it is the legislative intent that every person is exercising a taxable privilege that engages in the business of selling tangible personal property¹ in this state. For exercising such a privilege, a tax is levied on each taxable transaction or incident. The tax is due and payable at the rate of 6 percent, plus any applicable surtaxes imposed under s. 212.055, F.S., on the total consideration received for each item or article of tangible personal property when sold at retail in this state. 

Exemptions from tax are strictly construed against the claimant. Wanda Marine Corp. v. Dep't of Revenue, 305 So. 2d 65, 69 (Fla. 1st DCA 1975).

Rule 12A-1.020(6)(a), F.A.C., defines “[m]edical products, supplies, or devices” as “any products, supplies, or devices that are intended to be used for a medical purpose to treat, prevent, or diagnose human disease, illness, or injury. The purpose is assigned to a product, supply, or device by its label or its general instructions for use.” 

Rule 12A-1.020(6)(c)1., F.A.C., provides that “[m]edical products, supplies, or devices sold to hospitals, healthcare entities, or licensed practitioners are exempt when such medical products, supplies, or devices must be dispensed under federal or state law only by the prescription or order of a licensed practitioner and the medical products, supplies, or devices are intended for use on a single patient and are not intended to be reusable.”

Conclusion 

Since Product carries a prescription label and is intended for use on a single patient and is not intended to be reusable, sales of Product in Florida would be 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, MAcc 

Tax Law Specialist 

Technical Assistance & Dispute Resolution

^{(1) Section 212.02(19), F.S., defines the term “tangible personal property” as “personal property which may be seen, weighed, measured, or touched or is in any manner perceptible to the senses.”}