Colo. Code Regs. 39-26-717

Current through Register Vol. 47, No. 11, June 10, 2024

Rule 39-26-717 - Medical Material, Equipment, and Drugs

Basis and Purpose. The bases for this rule are section 39-21-112(1) and section 39-26-717, C.R.S. The purpose of this rule is to provide clarification regarding sales tax exemptions allowed for medical materials, equipment, and drugs.

(1)Definitions. As used in this rule and section 39-26-717, C.R.S., unless the context otherwise requires:

(a) "Prescription drug" has the same meaning as set forth in section 12-280-103(42), C.R.S.

(b) "Urine- and blood-testing kits and materials" include glucose strips and puncture lancets.

(c) "Prosthetic device" means a replacement, corrective, or supportive device, including repair and replacement parts for such device, worn on or in the body to:

(i) artificially replace a missing portion of the body;

(ii) prevent or correct physical deformity or malfunction; or

(iii) support a weak or deformed portion of the body.

(d) "Corrective eyeglasses and contact lenses" include over-the-counter corrective eyeglasses. However, the charges for eyeglass lens coatings (anti-reflective, scratch-resistant, anti-fog, etc.) that are separately stated on the invoice for corrective eyeglasses are taxable.

(e) "Furnished by a practitioner as part of professional services provided to a patient," as used in section 39-26-717(2)(a) and (2)(k), C.R.S., means "furnished to a patient" by a "practitioner" as part of "professional services" as those terms are defined in section 39-26-717(1)(c), C.R.S., and this paragraph (1)(e).

(i)Furnished to a Patient.

(A) "Furnished to a patient" means either:

(I) provided to a patient to take with them when they leave the practitioner's facility; or

(II) ingested or inhaled by the patient, injected into the patient, or administered intravenously or topically at the practitioner's facility (i.e., the prescription drug, nonprescription drug, or material is absorbed into the patient's body).

(B) Examples.

(I) Ibuprofen, acetaminophen, aspirin, and topical antiseptics and pain relief administered to a patient at the practitioner's facility are furnished to a patient.

(II) Medical supplies such as heel pads used during surgery to prevent skin and tissue damage are not furnished to a patient, even though they are worn by the patient, because they are neither ingested or inhaled by the patient, injected into the patient, or administered intravenously or topically at the practitioner's facility, nor do they leave the facility with the patient.

(III) Splints, casts, bandages, arm slings, packages of topical antiseptics and topical pain relief balms that are provided by a practitioner to a patient for use outside the practitioner's facility are furnished to a patient.

(IV) Tongue depressors, single-use scalpels, sponges, and other items that are used by the practitioner in the delivery of the professional services are not furnished to a patient.

(V) A patient's purchase of bandages from a medical supply retailer is not exempt pursuant to section 39-26-717(2)(k), C.R.S., even if the practitioner recommends the use of such bandages, because the bandages were not furnished by the practitioner.

(ii)Professional Services.

(A) "Professional services" does not include the sale of any item by a practitioner to a patient, unless such item is directly related to the professional service provided by the practitioner to the patient.

(I)Example. If a practitioner performs surgery to repair knee cartilage, and, as a necessary part of the service, sells the knee brace to assist in the recovery of the surgery, then the sale of the knee brace is exempt because it is provided as part of the professional service. However, if the practitioner performs knee surgery and, in addition to the knee brace, the patient elects to purchase an orthopedic pillow for the patient's recurring neck pain (for which the patient is not seeing the practitioner), the sale of the pillow is unrelated to the professional service, and, therefore, the sale of the orthopedic pillow does not qualify under this exemption.

(f) "Materials", as used in section 39-26-717(2)(k), C.R.S., does not include non-medical materials, such as baby diapers, disposable razors, boxes of tissues, toilet paper, deodorant, mouthwash, hand lotion (even if medicated), baby bottles, denture cleaner and adhesive, slippers, shave kits, admission kits, sanitary pads, and tampons, regardless of whether such non-medical materials are "furnished to a patient" as defined in paragraph (1)(e)(i) of this rule.

(g) "Oxygen delivery equipment" means a system used to transport oxygen directly into the patient's lungs and administered because the patient experiences an inadequate supply of oxygen.

(i) "Oxygen delivery equipment" includes:

(A) Liquid oxygen containers, oxygen cylinders, cylinder transport devices (sheaths, carts), cylinder stands, support devices, regulators, flowmeters, tank wrench, liquid oxygen base dispenser, liquid oxygen portable dispenser, oxygen concentrators, oxygen humidifiers, oxygen fittings, tubing, face masks and related items necessary for the delivery of oxygen to the patient;

(B) Pressure ventilators, volume ventilators, and other respiratory equipment that produce a form of controlled respiration in which compressed air is delivered under positive pressure into the patient's lungs;

(C) Respiratory equipment that induces air into the lungs of a patient, through the application of pressure to the chest area, regardless of whether the pressure applied is negative pressure or positive pressure;

(D) Exsufflation belts, iron lungs, chest shells, pulmo wraps, and the pumps and regulators necessary for the operation of the listed equipment; and

(E) Repair and replacement parts for oxygen delivery equipment.

(h)Durable medical equipment, including repair and replacement parts.

(i) "Durable medical equipment" includes, to the extent such items meet the statutory definition in section 39-26-717(1)(a), C.R.S.:

(A) Drug infusion equipment (non-implanted);

(B) Reaching, sitting, and sleeping aids, including sitting and sleeping cushions, overbed tables, specially designed hand utensils, foam wedges and cushions, alternating pressure pads, specialized seating and desks, boards, decubitis seating and sleeping pads for existing decubitis ulcers, patient lifts and slings;

(C) Toilet, bath and shower aids, including bed pans, urinals, and raised toilet seats, tub stools or benches, bath rails, and sitz bath chairs;

(D) Communication devices for physically impaired persons, including writing and speech aids;

(E) Injection guns;

(F) Electronic nerve stimulators (non-implanted) and insulin infusion pumps (non-implanted);

(G) Enteral feeding pumps and bags;

(H) Heat lamps, heat pads, and hot water bottles;

(I) Billi lights;

(J) Traction equipment, splints, and holders (non-implanted);

(K) Manual resuscitators;

(L) Physical and occupational therapy equipment, including hand exercise equipment putty, leg weights, bone fracture therapy devices (but not implanted fixators), muscle and nerve stimulators (non-implanted), paraffin baths, and hydrocollators;

(M) Eating and drinking aids, including specialized utensils;

(O) Stethoscopes;

(P) Hospital beds, but only if the bed is specially designed for the treatment of an existing illness or injury (e.g., adjustment mechanisms to adjust head and leg height and angle), marketed primarily for medical use, and constructed with medically necessary or appropriate design components that represent a significant portion of the cost of the bed (e.g., an inexpensive alert light does not convert a conventional bed into an exempt hospital bed). Bed mattresses are not "durable medical equipment" unless they meet the requirements of this paragraph (1)(h)(i)(P) and section 39-26-717(1)(a), C.R.S.

(ii) In general, equipment used primarily for preventative care, such as elder care or bariatric care, is not exempt durable medical equipment because the equipment is primarily and customarily used in the absence of an existing illness or injury. Equipment not specifically designed for the treatment of an existing illness or injury does not qualify for the durable medical equipment exemption even though the practitioner may believe that the equipment is useful or beneficial to the patient.

(i) "Mobility enhancing equipment":

(i) includes accessories related to equipment listed in section 39-26-717(1)(b)(II), C.R.S., such as ramps, motorized mechanical lifts, and carrying racks whose primary and customary purpose is to load or carry an exempt scooter in or on a motor vehicle;

(ii) includes stairglides, lifts in home, and patient transport devices; and

(iii) does not include items that are not primarily and customarily used to enhance mobility, such as shoe insoles, arch pads, dancer pads, knee braces, and ankle braces.

(j) "Equipment and related accessories for inhalation therapy" include room humidifiers, vaporizers, aspirators, aerosol compressors (stationary and portable), ultrasonic nebulizers, volume ventilators, respirators and related device supplies, percussors, vibrators, intermittent positive pressure breathing, circuits, devices and supplies, air oxygen mixers, oxygen concentrators, apnea monitors, ventilator vaporizers, and tubing.

(2)Dispensed Pursuant to a Prescription Order. The exemptions authorized by section 39-26-717(2)(g), (h), (i), and (j), C.R.S., apply only to items named therein that are dispensed pursuant to a prescription order and are therefore limited to purchases and leases of such items by a patient.

(a) A hospital or other medical service provider's purchases are not exempt under section 39-26-717(2)(g), (h), (i), or (j), C.R.S., because the hospital or provider's purchase is not made pursuant to a prescription order.

(b) The exemptions authorized by section 39-26-717(2)(g), (h), (i), and (j), C.R.S., do not apply to any items named when used for animals because the term "person" used in the definition of "prescription order" in section 39-26-717(1)(e)(II), C.R.S., does not include animals.

39-26-717

37 CR 18, September 25, 2014, effective 10/15/2014

38 CR 02, January 25, 2015, effective 2/14/2015

39 CR 10, May 25, 2016, effective 6/14/2016

40 CR 12, June 25, 2017, effective 7/15/2017

40 CR 23, December 10, 2017, effective 1/1/2018

41 CR 13, July 10, 2018, effective 7/30/2018

41 CR 14, July 25, 2018, effective 8/14/2018

42 CR 02, January 25, 2019, effective 12/18/2018, expires 4/17/2019.

42 CR 02, January 25, 2019, effective 12/18/2018

42 CR 06, March 25, 2019, effective 4/14/2019

43 CR 04, February 25, 2020, effective 3/16/2020

43 CR 17, September 10, 2020, effective 9/30/2020

44 CR 01, January 10, 2021, effective 1/30/2021

44 CR 07, April 10, 2021, effective 4/30/2021

44 CR 08, April 25, 2021, effective 5/15/2021

45 CR 04, February 25, 2022, effective 3/17/2022

45 CR 23, December 10, 2022, effective 12/30/2022

46 CR 08, April 25, 2023, effective 5/15/2023