98-081
Response February 9, 1999
REQUEST LETTER
Dear NAME.
We are writing regarding the Utah sales and use tax
implications related to the sale of medical oxygen to medical service organizations.
The basis of our request is as follows.
Medical Oxygen Sales
One of our clients, a home health care company (AThe Company@), sells medical oxygen in returnable
containers to health care providers (e.g., doctors, HMOs, nursing homes and hospitals)
for subsequent distribution to individuals pursuant to a doctor=s written prescription.
Utah statutes specifically include oxygen in the
definition of a medicine. Accordingly, we believe that the sale of oxygen to
medical service providers who will
administer the oxygen to individuals pursuant to a doctor's written
prescription or chart orders should
qualify or the exemption from sales tax for prescription medicines.
We respectfully request written clarification
regarding the Utah sales and use tax treatment related to sales of medical
oxygen to medical providers. If you
have any questions or need any additional information please call me at #####.
Sincerely,
NAME
RESPONSE
LETTER
February 9, 1999
RE: Advisory
Opinion - Sales Tax Exemption for Oxygen Used as a Medicine
Dear NAME,
We have received your request for an advisory opinion
concerning the sales tax exemption for medicine and its application to the sale
of oxygen. You have specifically asked
if oxygen sold to a medical care provider is subject to the exemption.
Sales of medicine are exempted from Utah=s sales and use tax.
Utah Code Ann '59-12-104(10).
For purposes of the exemption, Amedicine@ is defined in Utah Code Ann. '59-12-102(13)(b) to include Aany oxygen or stoma supplies prescribed by a physician
or administered under the direction of a physician or paramedic.@ Accordingly,
the sale of oxygen to medical service providers is exempt from taxation if the
oxygen is to be prescribed by a physician or administered under the direction
of a physician. Oxygen administered
pursuant to a doctor=s written prescription or chart orders could be
purchased tax-free because of this medicine exemption.
Please contact us if you have any other questions.
For the Commission,
Joe B. Pacheco, CPA
Commissioner
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