November 16, 2017
Re: Ruling Request: Retail Sales and Use Tax
Dear *****:
This will reply to your letter in which you request a ruling regarding the application of the Virginia retail sales and use tax to the sale of a product manufactured by (the “Taxpayer”) and sold to licensed dental practices in Virginia. I apologize for the delay in responding to your request.
FACTS
The Taxpayer is a Virginia manufacturer of medical and dental products. The Taxpayer manufactures and sells glass fiber reinforcement composite posts used by licensed dentists in root canal and crown procedures. The fiber posts support and anchor a crown after a root canal procedure. The fiber post consists of 70 percent glass fiber and 30 percent reinforced resin that is thermally coated with optical glass cladding made of noncorrosive bio-compatible material. The Taxpayer sells the fiber posts to licensed dentists and requests a ruling regarding the retail sales and use tax application to such sales.
RULING
Virginia Code § 58.1-609.10 10 provides an exemption from the retail sales and use tax 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. [Emphasis added.]
Title 23 VAC 10-210-940 G addresses purchases on behalf of an individual and states, “In order to be deemed a purchase on behalf of an individual, the item must be specifically bought for the individual. If items are purchased in bulk and then dispensed to individual patients, no exemption is applicable even if the item is modified or fitted for a specific individual.”
Title 23 on the Virginia Administrative Code (VAC) 10-210-500 A states:
The tax applies to sales to a dentist by a dental laboratory or supplier of dentures, plates, braces and similar prosthetic devices, or the component parts thereof, unless such dentures, braces, etc. are purchased on behalf of a specific patient. If such items are purchased in bulk and then dispensed to a particular patient, the original purchase will be subject to the tax even if the items withdrawn from the bulk inventory are modified for a specific patient.
The taxable status of prosthetic devices and similar items is governed by the above exemption and regulations, which require that these devices be purchased on behalf of an individual patient. Based on the Taxpayer's website, the fiber posts are available in six diameters and sold in blister packs to keep the posts organized and clean until ready for use. Although the dental posts qualify as a Class I device, the dental posts appear to be for general use and not purchased for a specific patient. Therefore, the Taxpayer should collect the sales tax when making sales of the dental posts to dental practices.
This response is based on the facts as summarized above. Any change in facts or the introduction of new facts may lead to a different result.
I trust that the foregoing responds to your inquiry. The Code of Virginia and regulation sections cited are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department's website. If you have any questions concerning this ruling, please contact ***** in the Department's Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/709.T