Tax Type
Retail Sales and Use Tax
Description
Medical Equipment and Devices; Durable Medical Equipment for the Deaf
Topic
Taxability of Persons and Transactions
Date Issued
08-23-1991
August 23, 1991
Re: Request for Ruling: Retail Sales and Use Tax
Dear***********************
This will reply to your letter requesting a ruling regarding the applicability of the Virginia retail sales and use tax on purchases made by ************** (the Taxpayer).
FACTS
The Taxpayer is a nonprofit volunteer organization organized to provide assistance to hearing impaired children and adults in the**************. The Taxpayer has recently started to purchase assistive devices directly from a dealer in order to provide additional funds to cover its operating expenses. The devices that the Taxpayer provides or sells are l) Telecommunication Devices for the Deaf (TDDs) which enable the deaf to communicate through the telephone; 2) Telecaptioners, which enable the deaf to use the television and VCR; and 3) Alert devices, which alert the deaf, by means of a flasher, to sounds, i.e., a doorbell, phone ring, or baby's cry. When a deaf child acquires the ability to read, the Taxpayer purchases a Telecaptioner on her behalf and donates it to the child. If an older deaf individual requires one, the Taxpayer purchases one on their behalf upon their request and resells it to the individual. The Taxpayer may also sell Telecaptioners, TDDs, or alert devices to individuals or the schools the deaf children attend. The Taxpayer seeks a ruling on the applicability of retail sales and use tax on the purchases of these devices.
RULING
Virginia Regulation (VR) 630-10-65(F) states that:
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- Durable medical equipment is that 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. In order for an item to be exempt from the tax, it must meet all of the criteria. The fact that an item is purchased from a medical equipment supplier is not dispositive of its exempt status; the item must satisfy the definition of durable medical equipment.
Telecommunication Devices for the Deaf
Telecommunication Devices for the Deaf (TDDs) are equipment that can withstand repeated use and are for appropriate use in the home. Additionally, the TDDs serve a particular medical purpose, that is, the TDDs perform the function of hearing for the deaf individual and are useful only if an individual has lost the function of hearing. Thus, TDDs meet the requirements of durable medical equipment.
Telecaptioners
Telecaptioners provide a substitute for the hearing function of a hearing impaired individual by converting sound into printed words. The words are then displayed across a video screen thereby providing a means by which a hearing impaired individual can obtain necessary information. The equipment is used in the home with repeated use and is generally not used by an individual, absent a hearing disability. As such, the equipment qualifies as durable medical equipment.
Alert Devices
Alert devices alert a hearing impaired individual to sounds by means of a visual signal. The otherwise unintelligible sound, i.e., a baby's cry, the doorbell, is received by the alert device and translated into a light or other visual signal alerting the hearing impaired individual to the event and allows the person to respond. As such, the device qualifies as durable medical equipment.
Because the above three types of assistive devices meet all four criteria set forth in VR 630-10-65(f) for durable medical equipment, such devices are exempt from the tax when purchased by or on behalf of an individual. However, the tax is due when the Taxpayer purchases the devices in bulk for future donation to organizations or individuals. When purchasing the devices for resale, the Taxpayer may purchase the devices exempt under the resale exemption (Form ST-10) and is required to collect and remit the tax from its customers, unless otherwise exempt form the tax.
I hope this clarifies the application of the tax. If you have any further questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner