REQUEST LETTER

04-004

NAME

ADDRESS

The COMPANY, a retail drugstore chain requests a written opinion regarding the sales taxability on the following medical equipment:

BRAND NAME CR Plus AED Training System – It is a battery operated external defibrillator used in cardiac emergencies to correct abnormalities in the heart's electrical system. Would this product be exempt from sales tax if a patient purchases it with a written prescription?

Enclosed you will find more information regarding the BRAND NAME CR.

Thank you for your assistance in this matter.

NAME

RESPONSE LETTER

                                                                                    March 19, 2004

NAME

ADDRESS

RE:        Private Letter Ruling Request – Taxability of BRAND NAME CR-T Automated External Defibrillator Training System

Dear NAME,

            You have asked the Commission whether the sale of a “BRAND NAME CR Plus AED Training System” is exempt from Utah sales and use tax.   You describe this item as a defibrillator used to correct heart abnormalities.   However, upon reading the literature you provide, the BRAND NAME CR-T AED Training System appears to be an instrument that provides realistic training in the use of a BRAND NAME CR Plus defibrillator without the actual charge and discharge of electrical energy. Regardless of whether it is the defibrillator or the training system that is sold, the taxability is the same.   Both items are taxable under Utah law, as explained below.

            Prior to July 1, 2004, Utah provides a sales tax exemption for items that meet the definition of “home medical equipment or supplies,” as found in Utah Code Ann. §59-12-102(12).   Effective July 1, 2004, however, the exemption for home medical equipment or supplies has been eliminated.   Instead, an exemption for “durable medical equipment,” as defined in Section 59-12-102(23), has been implemented.   To qualify as either “home medical equipment or supplies” or “durable medical equipment,” the products must be eligible for payment under Title XVIII of the federal Social Security Act or the state plan for medical assistance under Title XIX of the federal Social Security Act.   After conferring with the Division of Health Care Financing at the Utah State Department of Health, we have learned that neither defibrillators nor their trainings systems are eligible for payment under either of the titles described above.   Therefore, these products are not exempt from Utah sales and use tax.

            Although Utah provides an exemption from taxation for the sale of “medicine” (prior to July 1, 2004) and for a “drug” (on or after July 1, 2004), neither classification includes defibrillators, their training systems, or similar items.    Again, the Commission finds that these products are subject to Utah sales and use tax regardless of the change in law that occurs on July 1, 2004.   If you have any other questions, please let us know.

For the Commission,

Marc B. Johnson

Commissioner

MBJ/KC

04-004