Policy letter; food, medical devices, drugs; Aug30,1999

Topic Code: F176Food (ST) M081Medical Devices (ST) P238Prescription Drugs (ST)           Document Reference: 99300126

August 30, 1999

Redacted Content

Recently, the department received your letter requesting a legal or advisory opinion regarding the taxability of several items sold in your company stores. Redacted Content is a retailer of grocery and drug items with several outlets in Iowa. Specifically, you requested an opinion regarding whether sales tax should be imposed on sales to Redacted Content’s customers regarding the following items:

Please note that the authority cited in this letter may contain reference to department rules that have been drafted and adopted as implementing provisions of the Iowa Code. In addition, Department rules have the force and effect of the law and are presumed valid. Hope Evangelical Lutheran Church v. Iowa Department of Revenue and Finance, 463 N.W.2d 76 (Iowa 1990), Richards v. Iowa Department of Revenue, 360 N.W.2d 830 (Iowa 1985).

Hearing Aid Batteries: Pursuant to department rule 701 IAC 20.9(3)”a”, a hearing aid is exempt from tax as a prosthetic device. For tax purposes, batteries for a hearing aid are treated the same as hearing aid carriers and repair kits which are taxable as medical equipment and supplies pursuant to 701 IAC 20.9(3)”e”.

Birth Control and Contraceptive Products: Prescription birth control products are exempt from tax as a drug prescri bed or dispensed to an ultimate user pursuant to 701 IAC 20.7. However, non-prescription contraceptive products are subject to tax as the sale of tangible personal property as provided in Iowa Code section 422.43.

Blood Glucose Monitors: Your letter did not provide a description of the type of monitors at issue. As a result, I will state that the monitors are taxable, unless such devices fall within on of the two exemptions that I shall set forth. 1) Department rule 701 IAC 20.8(1) provides that the sales of specific nonprescription medical devices are exempt from Iowa tax if such devices are purchased for human use or consumption. One of the items listed is “diabetic testing materials”. This rules defines what constitutes exempt “diabetic testing materials” as “all materials used in testing for sugar or acetone in the urine, including, but no limited to, Clinitest, Tes-tape, and Clinistix; also, all materials used in monitoring the glucose levels in the blood, including, but not limited to, bloodletting supplies and testing strips”. 2) The sale of the monitors would also be exempt from Iowa tax if the monitors are medical devices that are prescri bed or dispensed to the ultimate user pursuant to department rule 701 IAC 20.7(1). “Medical device” is defined in 701 IAC 20.7(1)”c”(3) as, “equipment or supplies, including orthopedic or orthotic devices, intended to be prescri bed by a practitioner for human use to an ultimate consume for placement on or in the ultimate user’s body”.

Breast Shells and Bra Pads: Taxable as the sale of tangible personal property unless prescri bed or dispensed to the ultimate user for placement on or in the ultimate user’s body.

Edible Cake Decorations (including age number items made from sugar): Pursuant to department rule 701 IAC 20.1(3), such decorations are taxable as candy, candy-coated or candy products, unless purchase with food coupons.

Commode Chairs: Pursuant to department rule 701 IAC 20.9(3)”e”, commode chairs are taxable as medical equipment and supplies.

Condoms: Taxable as the sale of tangible personal property pursuant to Iowa Code section 422.43, unless prescri bed or dispensed as a drug to the ultimate user for placement on or in the ultimate user’s body.

Yogurt Covered Nuts: Taxable as candy-coated items pursuant to 701 IAC 20.1(3).

Yogurt Covered Raisins: Taxable as candy-coated items pursuant to 701 IAC 20.1(3).

Party Platter/Trays-(cold food) prepared by Deli for “off-premise’ consumption only. This would include items such a lunchmeats, cheeses, crackers, fruits, vegetables. These platters are picked up by customer and not delivered by us: These platters/trays are taxable as being sold for off-premise consumption pursuant to 701 IAC 20.5(2)”b”.

Party Platters/Trays-hot or cold sandwiches prepared by the Deli for “off-premises” consumption only. These platters are picked up by the customer and not delivered by us: These platters/trays are taxable as being sold for off-premise consumption pursuant to 701 IAC 20.5(2)”b”.

Sincerely,

Jerri M.K. DeVries

Policy Section

Office: (515) 281-3194

Fax: (515) 242-6487