You request a letter ruling concerning the application of the Massachusetts sales tax, G.L. c. 64H, to sales of a product known as *************** (hereinafter "the Product") to individual and institutional customers. You state the facts as follows: *************** ("Vendor") is the sole vendor and distributor of the Product, which is described as a modified seat cushion that can be mounted to a variety of powered and non-powered wheelchairs. The cushion is powered by an attached control unit and is used by immobilized patients at high risk of, or suffering from, pressure sores, bed sores, decubitus ulcers and other medical problems. The Product alleviates pain and therapeutically aids and accelerates the skin's healing process by providing zero pressure and allowing 100% air flow to the wound. It is also used to prevent additional, or the recurrence of, ulcers.
The Product is sold to individuals under the direction of, and with a written prescription from, a medical doctor. Additionally, it is sold to institutional customers such as hospitals or nursing homes through a purchase order or contractual agreement. In such cases, the sale is also initiated through a doctor's prescription.
Based on the facts as you state them, we rule that sales and rentals of the Product are exempt from sales tax as "alternating pressure pad units," under G.L. c. 64H, § 6(l), when 1) the Product and its components are sold or rented as a single unit for a single price, and 2) the Product is sold or rented pursuant to a written prescription of a registered physician.
With respect to Medicare sales of the products described in this ruling, see Letter Rulings 79-22, 81-57, 82-95, 83-83, and 84-19. See also Department of Revenue Directive 91-5.
Massachusetts imposes a five percent sales tax on sales and rentals of tangible personal property in Massachusetts by any vendor, unless otherwise exempt. See G.L. c. 64H, § 2. The exemptions to the sales tax are found in section 6 of Chapter 64H. Under G.L. c. 64H, § 6(l), the sale or rental of certain medical equipment is expressly exempt from sales tax, depending on the type of equipment and, in some cases, whether the equipment is prescribed by a registered physician. These exemptions include, in relevant part, an exemption for the following: "sales of ... alternating pressure pad units . . . when prescribed by a physician."
General Laws c. 64H, § 6(l) exempts sales of alternating pressure pad units on prescription of registered physicians, regardless of whether for home use or other use. See TIR 85-7. Based on the description you provided, the Product provides a specialized air support therapy system for patients suffering from pressure sores and related skin problems. As such, it constitutes an "alternating pressure pad unit," within the meaning of G.L. c. 64H, § 6(l). Sales or rentals of alternating pressure pad units are exempt under G.L. c. 64H, § 6(l) only when sold or leased pursuant to a registered physician's written prescription, unless another exemption provision applies. See, e.g., G.L. c. 64H, §§ 6(d), (exempting certain governmental sales); and § (e).
General Laws Chapter 64H, § 6(e) exempts sales to organizations that are exempt from taxation under Section 501(c)(3) of the Internal Revenue Code, provided the requirements of G.L. c. 64H, § 6(e) are met. Under G.L. c. 64H, § 6(e), sales or leases of alternating pressure pad units to a 501(c)(3) organization meeting all other requirements for exemption would be exempt, whether or not sold pursuant to a written prescription of a registered physician. Sales to for- profit organizations are not exempt under this provision.
The Product constitutes an alternating pressure pad unit for purposes of G.L. c. 64H, § 6(l). Thus, unless another exemption provision applies, sales of the Product are exempt under G.L. c. 64H, § 6(l), only when 1) the Product and its components are sold or rented together as a single unit for a single price, and 2) the Product and its components are sold or rented pursuant to a written prescription of a registered physician.
Very truly yours,
Commissioner of Revenue