Tax Type
Retail Sales and Use Tax
Description
Hospital beds; Medical equipment
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
05-31-1989
May 31, 1989
Re: Request for Ruling: Sales and Use Tax
Dear********************
This will reply to your letter dated March 21, 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 specialized hospital beds ("the beds") which are utilized for the prevention and treatment of different medical problems. The beds are prescribed by physicians for specific patients whose medical conditions are such that a standard hospital bed would hinder or aggravate the healing process. The beds are effective in the treatment of tissue trauma, spinal injuries, severe pulmonary conditions, pneumonia, and other conditions.
The beds are appropriate for use in the home, but a majority of them are used in the hospital environment due to the severity of the patient's injury or condition. The beds are installed by nurses and medical technicians employed by the Taxpayer and are monitored daily by the Taxpayer's nurses.
The Taxpayer asks specifically whether the beds qualify for exemption from the sales and use tax under Virginia Code §58.1-608(22).
RULING
Virginia Code §58.1-608(22), 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(22), 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, 1988.
If you have any further questions, please contact us.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner