1/05/04 - Georgia - Hemodialysis equipment and replacement parts may be exempt from sales and use tax - The SALT Group®

Georgia Code Annotated §48-8-3(54.1) provides an exemption from sales and use tax for “[t]he sale or use of any physician prescribed prosthetic device as defined under Titles XVIII and XIX of the Social Security Act.” Therefore any physician prescribed equipment or device defined as a “prosthetic device” under either Title XVIII or XIX of the Social Security Act would be eligible for the sales and use tax exemption.

Recent developments in Georgia have lead to a more liberal interpretation of the Georgia Statutes. Accordingly the Department of Revenue issued a recent letter ruling indicating that the term prosthetic device will include those devices meeting the criteria as specified in Title XVIII and XIX of the Social Security Act. Examples of devices meeting such criteria when prescribed by a physician include the following:

Devices that replace all or part of an internal body organ or replace all or part of the function of a permanently inoperative or malfunctioning internal body organ. For example, cardiac pacemakers, nerve stimulators, electronic speech aids, collagen implants, prosthetic lenses, breast prostheses for post-mastectomy patients, maxillofacial devices, surgical mesh, orthopedic implants, urinary collection and retention systems, total parenteral and enteral nutrition systems, trachea tubes and tracheostomy speaking values, colostomy and other ostomy bags and supplies, including the replacement of such devices and supplies, and hemodialysis equipment and replacement parts for such equipment.

Leg, arm, back and neck braces, including replacements if required because of a change in the patient’s physical condition. For example, cervical collars, thoracic rib belts, sacro-lumbar and dorso-lumbar corsets;

Devices that replace all or part of an external body member or replace all or part of the function of a permanently inoperative or malfunctioning external body member. For example, artificial legs, arms and eyes;

Devices that support weak or deformed portions of the body or prevent or correct physical deformity or malfunction. For example, abdominal binders, corsets used as a hernia support, trusses, anti-embolism stocking and custom molded shoes; and

One pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens.

Georgia’s more liberal interpretation is similar to Arizona Court of Appeals determination in Renal West L.C. v. Arizona Department of Revenue. In its ruling the Arizona Court of Appeals determined that dialysis equipment purchased by a dialysis treatment center was exempt from the Arizona use tax as doctor-prescribed prosthetic appliances even though doctor prescriptions recommending use of the equipment for kidney treatments were issued to patients, not the treatment center.

The court further determined that the treatment center did not have to be a nonprofit organization to be eligible for the exemption.^[1] Also, all items essential to dialysis treatment, such as solutions, testing equipment, and supplies, qualified as tax-exempt prosthetic appliances.

If you would like additional information on this topic or have other healthcare related questions, please contact James Privett, Regional Vice President - Sales & Use Tax Group at (615) 373-8373 or 615 414-1682. E-mail jprivett@thesaltgroup.com

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[1] Nonprofit hospitals in Georgia are exempt from sales and use tax. This expanded interpretation is related to for-profit hospitals and nonprofit clinics that do not meet the definition of hospital in the Georgia statutes.



		For Immediate Release January 5, 2004 Hemodialysis equipment and replacement parts may be exempt from sales/use tax Georgia Code Annotated §48-8-3(54.1) provides an exemption from sales and use tax for “[t]he sale or use of any physician prescribed prosthetic device as defined under Titles XVIII and XIX of the Social Security Act.” Therefore any physician prescribed equipment or device defined as a “prosthetic device” under either Title XVIII or XIX of the Social Security Act would be eligible for the sales and use tax exemption. Recent developments in Georgia have lead to a more liberal interpretation of the Georgia Statutes. Accordingly the Department of Revenue issued a recent letter ruling indicating that the term prosthetic device will include those devices meeting the criteria as specified in Title XVIII and XIX of the Social Security Act. Examples of devices meeting such criteria when prescribed by a physician include the following: Devices that replace all or part of an internal body organ or replace all or part of the function of a permanently inoperative or malfunctioning internal body organ. For example, cardiac pacemakers, nerve stimulators, electronic speech aids, collagen implants, prosthetic lenses, breast prostheses for post-mastectomy patients, maxillofacial devices, surgical mesh, orthopedic implants, urinary collection and retention systems, total parenteral and enteral nutrition systems, trachea tubes and tracheostomy speaking values, colostomy and other ostomy bags and supplies, including the replacement of such devices and supplies, and hemodialysis equipment and replacement parts for such equipment. Leg, arm, back and neck braces, including replacements if required because of a change in the patient’s physical condition. For example, cervical collars, thoracic rib belts, sacro-lumbar and dorso-lumbar corsets; Devices that replace all or part of an external body member or replace all or part of the function of a permanently inoperative or malfunctioning external body member. For example, artificial legs, arms and eyes; Devices that support weak or deformed portions of the body or prevent or correct physical deformity or malfunction. For example, abdominal binders, corsets used as a hernia support, trusses, anti-embolism stocking and custom molded shoes; and One pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens. Georgia’s more liberal interpretation is similar to Arizona Court of Appeals determination in Renal West L.C. v. Arizona Department of Revenue. In its ruling the Arizona Court of Appeals determined that dialysis equipment purchased by a dialysis treatment center was exempt from the Arizona use tax as doctor-prescribed prosthetic appliances even though doctor prescriptions recommending use of the equipment for kidney treatments were issued to patients, not the treatment center. The court further determined that the treatment center did not have to be a nonprofit organization to be eligible for the exemption.^[1] Also, all items essential to dialysis treatment, such as solutions, testing equipment, and supplies, qualified as tax-exempt prosthetic appliances. If you would like additional information on this topic or have other healthcare related questions, please contact James Privett, Regional Vice President - Sales & Use Tax Group at (615) 373-8373 or 615 414-1682. E-mail jprivett@thesaltgroup.com Back to Main News Page [1] Nonprofit hospitals in Georgia are exempt from sales and use tax. This expanded interpretation is related to for-profit hospitals and nonprofit clinics that do not meet the definition of hospital in the Georgia statutes.



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