Missouri – Taxability of Device Used to Stabilize Hands During Medical Procedures

SALT Report 2539 – The Missouri Department of Revenue issued a letter ruing regarding the application of sales and use tax to certain medical devices. The Taxpayer is an out-of-state company that develops and manufactures medical devices that enable physicians to securely position and stabilize a patient’s hand, wrist, and forearm while performing a surgical procedure. The “splint” is only used by the doctor while performing the medical procedure and is disposed of afterwards. The Taxpayer requested a ruling regarding whether its splints qualified for the exemption for prosthetic devices or orthopedic devices provided in section 144.030.2(19), RSMo.

In its response, the Department referred to Missouri Code of State Regulations 12 CSR 10-110-013(2)(D) which defines prosthetic devices as “a device that replaces all or part of the function of a permanently inoperative or malfunctioning internal body organ and is medically required.” And to Missouri Code of State Regulations 12 CSR 10-110.013(2)(A) which defines orthopedic devices as “a rigid or semi-rigid leg, arm, back or neck brace and casting materials which are directly used for the purpose of supporting a weak or deformed body member or restricting or eliminating motion in a diseased or injured part of the body.”

Based on those regulations, the Department ruled that the Taxpayer’s medical device did not qualify as an orthopedic device nor did it qualify a prosthetic device because the splint is only used during medical procedures to “temporarily support and stabilize a body part which is not weak or deformed.” Furthermore, because the device is disposed of after the medical procedure, it does not replace all or part of a permanently inoperative or malfunctioning internal body organ. Therefore, the Department concluded that any amounts the Taxpayer receives from its customers for the medical device are subject to Missouri sales and use tax.

For Further Information

Missouri Department of Revenue – Letter Ruling #LR 7246