Ga. Comp. R. & Regs. 560-12-2-.30

Current through Rules and Regulations filed through April 18, 2024

Rule 560-12-2-.30 - Drugs, Durable Medical Equipment, Prosthetic Devices, and Other Medical Items

(1) Purpose. This Rule sets forth the application of sales and use tax to certain drugs, durable medical equipment, prosthetic devices, and other medical items.

(2) Definitions. For the purposes of this Rule, the following definitions and explanations of terms shall apply:

(a) "Drug" means a compound, substance, or preparation, and any component of a compound, substance, or preparation, other than "food and food ingredients," "dietary supplements," or "alcoholic beverages":

1. Recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, or official National Formulary, or supplement to any of them; or

2. Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; or

3. Intended to affect the structure or any function of the body.

(b) Durable medical equipment.

1. "Durable medical equipment" means equipment, including repair and replacement parts for the same, that:

i. Can withstand repeated use;

ii.Is primarily and customarily used to serve a medical purpose;

iii.Generally is not useful to a person in the absence of illness or injury;

iv.Is not worn in or on the body; and

v. Is not "mobility enhancing equipment."

2. Examples of durable medical equipment include but are not limited to:

i. Hospital beds, mattresses, and bedding-related attachments;

ii.Drug infusion equipment (non-implanted), nebulizers, vaporizers, oxygen concentrators, infant apnea monitors, and ventilators;

iii.Sitz bath chairs, bed pans, urinals;

iv.Heat lamps, heat pads, and hot water bottles; and

v. Blood glucose monitors, electronic nerve stimulators (non-implanted), breast pumps, and insulin infusion pumps (non-implanted).

(c) Mobility enhancing equipment.

1. "Mobility enhancing equipment" means equipment, including repair and replacement parts to the same, that:

i. Primarily and customarily is used to provide or increase the ability to move from one place to another and that is appropriate for use either in a home or a motor vehicle; and

ii.Generally is not used by persons with normal mobility; and

iii.Does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.

2. "Mobility enhancing equipment" does not include "durable medical equipment."

3. Examples of mobility enhancing equipment include but are not limited to:

i. Adjustable or raised toilet seats;

ii. Tub and shower stools or benches;

iii. Bed pull-up Ts;

iv. Canes;

v. Crutches;

vi. Grab bars and hand rails;

vii. Lift chairs;

viii.Patient lifts;

ix. Scooters and transporters for disabled persons;

x. Specialty chairs;

xi.Transfer belts and benches;

xii. Walkers; and

xiii. Wheelchairs and ramps.

(d) "Natural person" means an individual human being.

(e) "Over-the-counter drug" means a drug that contains a label identifying the product as a drug as required by 21 C.F.R. § 201.66. The "over-the-counter drug" label includes:

1. A "Drug Facts" panel; or

2. A statement of the "active ingredient(s)" with a list of those ingredients contained in the compound, substance, or preparation.

(f) "Physician" means a person licensed to practice medicine pursuant to Article 2, Chapter 34 of Title 43.

(g) "Prescription" means an order, formula, or recipe issued in any form of oral, written, electronic, or other means of transmission by a duly licensed practitioner authorized by the laws of this state.

(h) Prosthetic device.

1. "Prosthetic device" means a replacement, corrective, or supportive device including repair and replacement parts for the same worn on or in the body to:

i. Artificially replace a missing portion of the body; or

ii.Prevent or correct physical deformity or malfunction; or

iii.Support a weak or deformed portion of the body.

2. "Prosthetic device" does not include hearing aids and eyeglasses.

3. Examples of prosthetic devices include but are not limited to:

i. Artificial implants such as artificial arteries (e.g., vascular grafts, stents), hearts and valves (e.g., atrial, mitral, annuloplasty rings), ears, nose, eyes (e.g., intraocular lenses), skin and other tissues (e.g., collagen, hyaluronic acid), larynx, or any other implant that replaces, in whole or part, a part of the human body;

ii.Bone nails, pins, screws, plates, fixation devices, bone cement, wax, fillers, or other items surgically implanted into the body used to correct deformities, or to preserve and restore the function of the human skeletal system;

iii.Organ implants;

iv.Breast prostheses, including surgical brassieres for post- mastectomy patients;

v. Cardiac pacemakers and implanted cardioverter defibrillators;

vi.Implanted nerve stimulators;

vii.Implanted tissue expanders;

viii.Implanted devices used for hydrocephalus;

ix.Surgical mesh;

x. Gastric bands and intragastric balloons;

xi.Colostomy, ileostomy and urostomy appliances, including bags and necessary equipment required for attachment, such as tubing;

xii.Electronic speech aids if the patient had a laryngectomy or if the larynx is inoperative;

xiii.Urinary collection systems, including Foley catheters, when replacing bladder function in cases of urinary incontinence;

xiv.Enteral or parenteral feeding systems and their individual components (e.g., catheters, filters, extension tubing, infusion pumps);

xv.Artificial legs, arms and eyes, including terminal devices such as artificial hands;

xvi.Braces, cervical collars, abdominal belts, anti-embolism stockings, pressure/compression garments, trusses, supports, suspensories, and similar devices worn on the body to correct or alleviate a physical incapacity or injury;

xvii.Hoods and space shoes that replace part of a foot;

xviii.Stump stockings and harnesses essential to the effective use of an artificial limb, and

xix.Dental crowns, implants, complete and partial dentures, obturators and fillings.

(3) Drugs.

(a) The sale or use of drugs that are lawfully dispensable only by prescription for the treatment of natural persons is exempt from Georgia sales and use tax. This exemption applies to all purchasers including but not limited to individual consumers, hospitals, clinics, and medical practice groups.

(b) Unless otherwise exempt, all sales of over-the-counter drugs are subject to Georgia sales and use tax regardless of whether they are dispensed under a prescription, even if the over-the-counter drug is purchased on the advice or recommendation of a physician. Examples of over-the-counter drugs include but are not limited to aspirin, acetaminophen, ibuprofen, cold remedies, antacids, laxatives, and cold sore gels.

(c) Dealers must maintain sufficient prescription documentation to support exempt sales.

(4) Durable Medical Equipment.

(a) Purchases for resale. Durable medical equipment may be purchased tax exempt for resale only if title and possession will be permanently transferred to a natural person to whom a prescription for the equipment is issued or if full possession, control and use will be transferred, pursuant to a bona fide lease agreement, to a natural person to whom a prescription for the equipment is issued.

1. Durable medical equipment that can be sold or used only pursuant to a prescription under federal or state law may be purchased tax exempt for resale pursuant to this subparagraph without furnishing form ST-5 (Sales and Use Tax Certificate of Exemption).

2. If an item of durable medical equipment may lawfully be sold without a prescription, the purchaser must furnish form ST-5 to its vendor in order to purchase the item tax free for resale.

(b) Transfers to patients. Pursuant to O.C.G.A. § 48-8-3(54)durable medical equipment may be transferred tax exempt to a natural person to whom a prescription for the equipment is issued.

(c) Use by service providers. If a service provider uses, possesses or controls an item of durable medical equipment at any time in providing a medical service (including but not limited to diagnostic, treatment, or rehabilitative services), the item is not considered to have been sold or used pursuant to a prescription and the service provider is liable for sales or use tax on the service provider's cost price of the item.

(5) Prosthetic Devices.

(a) If a prosthetic device can be sold or used only pursuant to a prescription under federal or state law, and title and possession will be permanently transferred to a natural person to whom a prescription for the device is issued, the entity (including hospitals, clinics, and medical practice groups) transferring the device may purchase the item tax exempt without furnishing form ST-5 (Sales and Use Tax Certificate of Exemption). The entity subsequently may transfer the device tax exempt pursuant to O.C.G.A. § 48-8-3(54) to a natural person to whom a prescription for the device is issued.

(b) If a prosthetic device may lawfully be sold without a prescription, and title and possession will in fact be permanently transferred to a natural person pursuant to a prescription issued to that person, the entity transferring the device must furnish an ST-5 to its vendor in order to purchase the item tax free for resale. The transferring entity may then transfer the item tax exempt pursuant to O.C.G.A. § 48-8-3(54)when the transfer is made to a natural person pursuant to a prescription issued to that person.

(6) Mobility Enhancing Equipment.

(a) Purchases for resale. Mobility enhancing equipment may be purchased tax exempt for resale only if title and possession will be permanently transferred to a natural person to whom a prescription for the equipment is issued by a physician or if full possession, control and use will be transferred, pursuant to a bona fide lease agreement, to a natural person to whom a prescription for the equipment is issued by a physician.

1. Mobility enhancing equipment that can be sold or used only pursuant to a prescription under federal or state law may be purchased tax exempt for resale pursuant to this subparagraph without furnishing form ST-5 (Sales and Use Tax Certificate of Exemption).

2. If an item of mobility enhancing equipment may lawfully be sold without a prescription, the purchaser must furnish form ST-5 to its vendor in order to purchase the item tax free for resale.

(b) Transfers or sales to patients. Pursuant to O.C.G.A. § 48-8-3(72)mobility enhancing equipment may be transferred tax exempt to a natural person to whom a prescription for the equipment is issued by a physician.

(c) Use by service providers. If a service provider uses, possesses or controls an item of mobility enhancing equipment at any time in providing a medical service (including but not limited to diagnostic, treatment, or rehabilitative services), the item is not considered to have been sold or used pursuant to a prescription and the service provider is liable for sales or use tax on the service provider's cost price of the item.

(7) Other Medical Items.

(a) Eyeglasses and contact lenses.

1. The sale of eyeglasses and contact lenses is exempt from sales and use tax when the sale is made to a natural person pursuant to a prescription issued to that person.

2. The distribution of prescription contact lenses by the manufacturer to licensed dispensers, that are free samples not intended for resale and labeled as such, are exempt from sales and use tax.

(b) The sale of oxygen is exempt from sales and use tax when the sale is made to a natural person pursuant to a prescription issued to that person by a licensed physician.

For example, a medical service provider purchases oxygen from a seller and then sells the oxygen to a patient pursuant to a prescription issued to that patient by a licensed physician. The service provider's purchase is taxable unless the provider presents a resale certificate to the seller. The service provider's sale of oxygen to the patient is exempt under O.C.G.A. § 48-8-3(51).

(c) The sale of hearing aids is exempt from sales and use tax. This exemption applies to all purchasers including but not limited to individual consumers, hospitals, clinics, and medical practice groups.

(d) The sale of insulin syringes, insulin, and blood measuring strips is exempt from sales and use tax. This exemption applies to all purchasers including but not limited to individual consumers, hospitals, clinics, and medical practice groups.

(e) Enteral nutrition and parenteral nutrition are exempt from sales and use tax when sold to a natural person pursuant to a prescription issued to that person.

Ga. Comp. R. & Regs. R. 560-12-2-.30

O.C.G.A. Secs. 48-2-12, 48-8-2, 48-8-3, 48-8-49.

Original Rule entitled "Drugs, Medicines and Medical Supplies" adopted. F. and eff. June 30, 1965.

Repealed: New Rule entitled "Drugs, Medicine and Medical Equipment" adopted. F. Jan. 13, 1975; eff. Feb. 2, 1975.

Amended: F. June 4, 1985; eff. June 24, 1985.

Amended: F. Nov. 27, 1989; eff. Dec. 17, 1989.

Repealed: New Rule entitled "Drugs, Durable Medical Equipment, Prosthetic Devices, and Other Medical Items" adopted. F. Dec. 21, 2007; eff. Jan. 10, 2008.

Amended: F. Oct. 30, 2012; eff. Nov. 19, 2012.