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NY – Prosthetic or not??

Posted by salestax on May 6, 2009

Just another reason why I and many others in this great nation are employed in a niche career involving sales and use taxes. 

New York put out an advisory opinion about whether biological soft tissue products were exempt.  In the advisory, they reviewed the exemption for medical eqiupment and supplies and prosthetics.  In this particular case, they found that the tissue would be a prosthetic because it replaced actual skin. 

But, what really struck me was the mention of another case where a particular type of bone filler met the requirement of prosthetic because it “completely or partially replaces a missing body part,” but a 2nd bone filler didn’t qualify because it only repaired the bone, was absorbed by the body and later replaced by new bone, so it was not exempt because it “did not completely or partially replace a missing body part because it did not remain in the body.” 

I find two things wrong with this:

1.  The statement was that the 2nd filler became “absorbed” by the body.  However, there’s no mention that it left the body.  But the reason for denial in this case was because “it did not remain in the body.”  I find this to be quite ambiguous.

2.  Next, I don’t understand why the non-prosthetic bone filler coulnd’t have been exempted as medical equipment and supplies since it seems to meet the definition of  “required for use in the cure, mitigtion, treatment or prevention of illnessess or diseases in human beings or to correct or alleviate physical incapacity.” 

My guess is that this is another case of rulings officers taxing something based on one section of a law, just because that’s the section inquired about by a taxpayer, but not paying attention to another section of law that would exempt it.

Does anyone else see this, or is it just me?  Your thoughts?

Like I said… this is the reason I’m employed.

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