Illinois – Taxability of Joint Relief and Muscle Recovery System

SALT Report 2991 – The Illinois Department of Revenue issued a general information letter regarding whether a Taxpayer’s medical product qualifies for the lower tax rate of 2.25% provided in Title 86 part 130 Section 130.311 – Medicines, Medical Appliances and Grooming and Hygiene Products.

The Taxpayer’s medical device is an FDA regulated cold compression system that aids in muscle recovery. The product treats joint injuries, poor circulation, muscle pain, reduces swelling, and minimizes the effects of delayed onset muscle soreness.

In its response, the Department stated that under the provisions of 86 Ill. Adm. Code Section 130.311 qualified medical appliances are those that directly substitute for a malfunctioning part of the human body. This includes items such as artificial limbs, dental prostheses, orthodontic braces, crutches, orthopedic braces, wheelchairs, heart pacemakers, and dialysis machines.

Based on above, the Department determined that the Taxpayer’s product does not qualify for the lower tax rate as it does not directly substitute for a malfunctioning part of the human body. Consequently, the system is subject to the higher state tax rate of 6.25%.

For Further Information

Illinois Department of Revenue – General Information Letter ST 13-0038-GIL