Colorado – Medical and Dental Supplies and Equipment

SALT Report 1851 – The Colorado Department of Revenue updated their sales and use tax FYI regarding exemptions for medical and dental supplies and equipment.  Generally, certain drugs, medical equipment and supplies are exempt from state and state-administered sales and use taxes.  Medical service providers include doctors, hospitals and medical clinics, nursing homes, and other similar entities.  Because the principal focus of these medical service providers is the sale of services, they are considered to be the consumers of the equipment and supplies they purchase and use to provide their services. Sales of nonexempt items to these providers are treated as retail sales, not wholesale sales.

Colorado law, §39-26-717 CRS exempts the following items:

  • Prescription drugs dispensed with a prescription or furnished by a licensed provider,
  • Insulin, hypodermic needles and syringes used only for insulin, and glucose used for treating insulin reactions,
  • Blood and urine testing kits and materials,
  • Prosthetic devices,
  • Corrective eyeglasses and contact lenses, including over-the-counter corrective eyeglasses,
  • All sales of drugs and materials when given to a patient by a licensed provider as part of professional services,
  • Hearing aids, including related accessories, such as batteries, testers and hearing aid savers,
  • Sleep therapy, inhalation therapy, and electrotherapy and related equipment,
  • Oxygen delivery equipment and any required disposable medical supplies,
  • Medical, feeding, and disposable supplies, including any related accessories for incontinence, infusion, enteral nutrition, ostomy, urology, diabetic care, and wound care
  • Durable medical equipment, including repair and replacement parts, and,
  • Mobility enhancing equipment, including repair and replacement parts

However, hot tubs, spas, whirlpool baths, waterbeds, soft foam beds and pillows, and exercise equipment are not exempt because they are not primarily and customarily used to serve a medical purpose.

The FYI also discusses vendor liability and provides a list of most taxable and exempt supplies.

For Further Information:

Colorado Department of Revenue – FYI 68