California Medical, Dental, and Optical Supplies and Drugs

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Exemption from California sales and use tax applies to prescription drugs, and to medicines, that are furnished by licensed physicians, dentists, and podiatrists in treating their patients, or that are furnished by health facilities (including health facilities maintained by any division of state government) in treating patients pursuant to the order of licensed physicians, dentists, or podiatrists. Exemption eligibility instead requires products to satisfy requirements set forth in the controlling statute and regulation. ( Sec. 6369, Rev. & Tax. Code; Reg. 1591, 18 CCR)

See Food and Grocery Items, under the subheading "Vitamin enhanced water," for a discussion of medicinal claims made on food products.

•Blood and human body parts

Exempt from taxation for any purpose are human whole blood, plasma, blood products, and blood derivatives, or any human body parts held in a bank for medical purposes. ( Sec. 33, Rev. & Tax. Code) Containers used to collect or store tax-exempt human whole blood, plasma, blood products, or blood derivatives are also exempt. ( Sec. 6364.5, Rev. & Tax. Code; Reg. 1589(b)(1), 18 CCR) The exemption extends to blood collection units and blood pack units, as defined.

•Catheters

Intra-aortic balloon pump catheters and coronary angioplasty balloon catheters are exempt from tax. Other catheters are also exempt if they are:

  • permanently implanted in the human body, and help a natural organ, artery, vein, or limb to function, and remain or dissolve in the body;

  • used for drainage through an artificial opening in the human body, qualifying as ostomy materials and related supplies; or

  • used for drainage through a natural opening in the human body to help a natural body part to function or to replace such a part, qualifying as a prosthetic device.

( Reg. 1591.1, 18 CCR)

Supplies related to catheters are subject to tax. "Related supplies" includes, but is not limited to, coronary guiding catheters, coronary guide wires, guide wire introducers, sheath introducer systems, torquing devices, hemostatic valves, inflation devices, and syringes. ( Reg. 1591.1, 18 CCR)

The CDTFA legal division regards other catheters are taxable except for catheters that are:

  • permanently implanted;

  • used for drainage; or

  • an integral and necessary part of another exempt item.

See ¶63-710, SUTA Series 425, Prescription Medicines.

•Dental items

Not qualifying as exempt medicines are most dental works, including dentures, plates, fixed permanent bridges, and permanently implanted teeth, crowns, caps, inlays, other dental prosthetic materials and devices, and orthodontic devices, and appliances. ( Sec. 6369(c), Rev. & Tax. Code; Reg. 1591.2, 18 CCR)

See Services, for a discussion of dentists and dental laboratories.

•Drug stores

Guidance is provided regarding the application of sales and use taxes to common drug store transactions such as sales of prescription drugs, magazines, beauty supplies, and food products. The publication is designed for individuals who are responsible for drug store sales and purchases. ( CDTFA Publication 27, Drug Stores, California Department of Tax and Fee Administration)

•Hearing aids

Hearing aids furnished by licensed hearing aid dispensers are exempt from sales and use tax, but are taxable to the dispensers when they purchase such items. ( Sec. 6018.7, Rev. & Tax. Code; Reg. 1506(e), 18 CCR) Tax applies to the retail sale of such items by persons who are not licensed hearing aid dispensers. ( Reg. 1506(e), 18 CCR)

•Hemodialysis products

California exempts the sale or use of hemodialysis products supplied under the order of a medical doctor to a patient by a registered pharmacist or by a supplier authorized under California law to distribute such products directly. ( Sec. 6369.1, Rev. & Tax. Code; Reg. 1591, 18 CCR)

•Herbal products

Sales of herbal products, including teas and tea capsules, are subject to tax provided: (1) medicinal claims are made on the label or packaging, or in catalogs, brochures or other informational material distributed with the products; or (2) the products are labeled, packaged or otherwise marketed as food supplements or adjuncts (i.e., a food additive). Medicinal claims do not have to be in English for tax to apply. Tax applies to sales of herbal products that have a medicinal claim in a foreign language on the label or packaging as specified above. ( Reg. 1602, 18 CCR; Tax Information Bulletin, California State Board of Equalization, June 2008, ¶404-655)

A medicinal claim on a product's label does not convert a food product into a medicine. Products sold as medicines are not excluded from the definition of "food products;" actual medicines are excluded from food products. If a product is a medicine, then it is not a food product. In order to determine if the sale of an herbal product, including teas and tea capsules, falls within the food products exemption, it is irrelevant if specific medicinal claims are made regarding the product. Instead, the product must actually be a medicine. In determining if a product is a medicine, it must first be determined if the product is approved for use by the U.S. Food and Drug Administration to diagnose, cure, mitigate, treat, or prevent any disease, illness, or medical condition. If a product is so approved, it is a medicine and is not a food product. ( Tax Information Bulletin, California State Board of Equalization, December 2009, ¶405-020)

•Hospitals and other medical service facilities

Guidance is provided regarding the application of California sales and use taxes to transactions that involve hospitals and other medical service facilities, as defined. Although institutions operated by the federal government are not covered by this publication, the following institutions are: health facilities, community care facilities, residential care facilities for the elderly, alcoholism or drug abuse recovery or treatment facilities, housing for older persons, and surgery centers or other medical or psychological outpatient health facilities. ( CDTFA Publication 45, Hospitals and Other Medical Facilities, California State Board of Equalization, February 2009, ¶404-871)

•Insurance coverage

The prescription medicine exemption applies, even if prescription medicine charges are covered in whole or in part by insurance or by an employer-furnished health contract, whether or not the retailer issues a joint billing in the name of both the consumer and the insurer. ( Reg. 1591, 18 CCR)

Sales to persons insured under Part A of the Medicare Act are exempt from California sales and use tax as sales to the United States, whether or not items sold qualify as exempt "medicines," because health care providers are engaged in contract with the federal government to provide certain services. Unless sales to persons insured under Medicare Act Part B are otherwise not subject to tax, however, such sales are taxable since patients, not sellers, are under contract with the federal government with respect to Part B claims. See ¶63-710, SUTA Series 425, Prescription Medicines. ( Reg. 1591, 18 CCR)

See ¶63-710 for the CDTFA legal division's position concerning the tax treatment of items provided to patients by health maintenance organizations (HMOs). See ¶63-710, SUTA Series 425, Prescription Medicines.

•Medical identification tags

See Nonprofit Organizations, Private Schools, and Churches.

•Medical oxygen delivery systems

Medical oxygen delivery systems, defined as systems used to administer oxygen directly into a patient's lungs to relieve an abnormal deficiency or inadequate supply of oxygen, are exempt from tax. Liquid oxygen containers, high pressure cylinders, regulators, oxygen concentrators, tubes, masks, and related items necessary for delivery of oxygen to a person qualify for exemption from tax. However, devices that only assist breathing, but do not deliver air or oxygen directly into the lungs, do not qualify as exempt medical oxygen delivery systems. Qualifying systems are exempt, provided they are sold, leased, or rented to an individual for that person's use under the direction of a medical doctor. Systems used by patients while on the premises of hospitals, immediate care facilities, physicians, or other health care providers, however, are subject to tax. Insurance coverage does not affect the exempt status of qualifying sales of oxygen delivery systems and replacement parts, even if the retailer issues a joint billing in the name of the individual and the insurer. ( Sec. 6369.5, Rev. & Tax. Code; Reg. 1591.4, 18 CCR)

For qualifying system delivery purposes, "physicians" are persons authorized by a currently valid and unrevoked license to practice their respective professions in California. Persons holding a valid and unrevoked physician's and surgeon's certificate or certificate to practice medicine and surgery, issued by the Medical Board of California or the Osteopathic Medical Board of California, qualify as physicians. Unlicensed persons lawfully practicing medicine as a graduate of an approved medical school, registered with the Division of Licensing, and enrolled in an approved postgraduate training program, also qualify as physicians, provided they satisfy all other conditions requisite to the practice of medicine as postgraduates. ( Reg. 1591.4, 18 CCR)

Qualifying system rentals or leases to health facilities are exempt from tax, provided the facility intends to lease or rent the system to an individual for personal use and such transaction is actually consummated, with direction and control of the equipment transferred to the patient. Separate billing to the patient for using the system does not constitute an exempt lease or rental if the patient's use of the system is limited to the health facility's premises. ( Reg. 1591.4, 18 CCR)

•Medicinal cannabis

On November 8, 2016, California voters approved Proposition 64, The Control, Regulate, and Tax Adult Use of Marijuana Act. ( Special Notice L-481, California State Board of Equalization, October 2016; Tax Guide for Medical Marijuana Businesses, California State Board of Equalization, November 2016)

Retail sales of medicinal cannabis to persons who have a valid Medical Marijuana Identification Card (MMIC) issued by the California Department of Public Health (CDPH) and a valid government-issued identification card (ID) are exempt from sales and use tax.

The California Department of Tax and Fee Administration (CDTFA) provides guidance regarding marijuana. ( Publication 557, Tax Help for the Cannabis Industry, CDTFA, January 2020, ¶407-088)

Donated medicinal cannabis.—Beginning March 1, 2020, cannabis retailers may donate free medicinal cannabis or medicinal cannabis products (medicinal cannabis) to medicinal cannabis patients, or cannabis licensees may donate free medicinal cannabis to cannabis retailers for subsequent donation to medicinal cannabis patients, without payment of certain taxes. The following taxes are not applicable to donated medicinal cannabis:

  • the cultivation tax will not apply to medicinal cannabis when the cultivator designates for donation in the California Cannabis Track-and-Trace system;

  • the cannabis excise tax does not apply when a cannabis retailer donates free medicinal cannabis to a medicinal cannabis patient; and

  • the use tax will not apply when a cannabis retailer donates free medicinal cannabis to a medicinal cannabis patient, or when another licensee, such as a distributor or manufacturer, donates free medicinal cannabis to a retailer for subsequent donation to a medicinal cannabis patient.

( Sec. 6414, Rev. & Tax. Code; Sec. 34012.1, Rev. & Tax. Code; Special Notice L-729, California Department of Tax and Fee Administration, January 2020)

A "medicinal cannabis patient" is a qualified patient who possesses a qualifying physician’s recommendation, or a qualified patient or the patient’s primary caregiver with a valid Medical Marijuana Identification Card issued by the California Department of Public Health. ( Sec. 6414, Rev. & Tax. Code; Sec. 34012.1, Rev. & Tax. Code; Special Notice L-729, California Department of Tax and Fee Administration, January 2020)

The cannabis licensee that receives medicinal cannabis for donation must certify in writing to the licensee donating it that the medicinal cannabis will ultimately be donated to a medicinal cannabis patient. Cannabis licensees can use a written document, such as a letter, note, purchase order, or preprinted form, as a cannabis donation certificate. In the alternative, a cannabis licensee may use form CDTFA-230-CD, Cannabis Donation Certificate, as a written certification that the medicinal cannabis will be donated to a medicinal cannabis patient. ( Sec. 6414, Rev. & Tax. Code; Sec. 34012.1, Rev. & Tax. Code; Special Notice L-729, California Department of Tax and Fee Administration, January 2020)

When taken in good faith by the licensee donating the medicinal cannabis, the written certification relieves:

  • the cultivator from the liability of the cultivation tax;

  • the manufacturer from its responsibility to collect the cultivation tax from the cultivator;

  • the distributor from its responsibility to collect the cultivation tax from the cultivator and the cannabis excise tax from the retailer; and

  • each licensee from liability of the use tax when donating the medicinal cannabis.

If a cannabis licensee certifies in writing that medicinal cannabis will be donated to a medicinal cannabis patient and later sells or uses the medicinal cannabis in some other manner than for donation, the certifying licensee will be liable for any taxes that would be due, including the cultivation tax, cannabis excise tax, and use tax. ( Sec. 6414, Rev. & Tax. Code; Sec. 34012.1, Rev. & Tax. Code; Special Notice L-729, California Department of Tax and Fee Administration, January 2020)

Guidance issued to retailers on free medicinal cannabis.—Cannabis retailers are prohibited from giving away any amount of cannabis or cannabis products unless authorized to do so by the Bureau of Cannabis Control (BCC), for California cannabis excise and sales and use tax purposes. The BCC administers cannabis licensing activities for retailers and distributors. If a retailer is authorized to give cannabis or cannabis products away free of charge, the cannabis excise tax does not apply. However, the retailer does owe use tax on the retailer’s purchase price of the cannabis or cannabis products. ( Cannabis Tax Fact, California Department of Tax and Fee Administration, April 26, 2018)

The BCC provides that free cannabis or cannabis products can be provided to medicinal cannabis patients or primary caregivers in possession of valid Medical Marijuana Identification Cards issued by the California Department of Public Health. The cannabis excise tax does not apply to medicinal cannabis provided for free to qualified patients. If a retailer already paid the excise tax to a cannabis distributor, the retailer may request a return of the tax from the distributor who supplied the retailer with the cannabis or cannabis product. ( Cannabis Tax Fact, California Department of Tax and Fee Administration, April 26, 2018)

A cannabis retailer owes use tax based on the retailer’s purchase price of the cannabis or cannabis products the retailer provides to medicinal cannabis patients or primary caregivers free of charge. Or, if a retailer is also a licensed manufacturer, such a retailer owes tax on the cost of the taxable items used to manufacture the cannabis products. To pay use tax, the purchase price of the cannabis is reported as "Purchases Subject to Use Tax" on the sales and use tax return. Those purchases become part of the total amount that is subject to tax. ( Cannabis Tax Fact, California Department of Tax and Fee Administration, April 26, 2018)

To qualify for the exemption.—Retail sales of the following types of medical cannabis are exempt from sales and use tax:

  • medical cannabis;

  • medical cannabis concentrate;

  • edible medical cannabis products; and

  • topical cannabis (as defined in Sec. 19300.5 of the Business and Professions Code).

( Special Notice L-486, California State Board of Equalization, November 2016; Special Notice L-481, California State Board of Equalization, October 2016; Tax Guide for Medical Marijuana Businesses, California State Board of Equalization, November 2016)

To obtain the exemption, qualified patients or their primary caregiver must provide their valid Medical Marijuana Identification Card issued by the California Department of Public Health (pursuant to Sec. 11362.71 of the Health and Safety Code) and a valid government issued identification card at the time of purchase. In order to properly claim the sales and use tax exemption, a medical marijuana business should not collect sales tax reimbursement on the qualifying exempt sales of medical marijuana, and should claim a deduction on its sales and use tax return for the qualifying exempt medical marijuana sales. ( Special Notice L-486, California State Board of Equalization, November 2016; Tax Guide for Medical Marijuana Businesses, California State Board of Equalization, November 2016)

What retailers need to do to properly claim the exemption.—Medical marijuana retailers can claim the exemption on their sales and use tax return. Retailers should retain supporting documentation (either physical or electronic) to substantiate exempt transactions, including:

  • the purchaser's nine-digit ID number and expiration date, as shown on the qualified patient's or primary caregiver's unexpired Medical Marijuana Identification Card; and

  • the related sales invoice or other original record of sale.

( Special Notice L-486, California State Board of Equalization, November 2016; Special Notice L-481, California State Board of Equalization, October 2016; Tax Guide for Medical Marijuana Businesses, California State Board of Equalization, November 2016)

A valid MMIC is issued by the CDPH and indicates:

  • that the card is issued by the State of California and includes the state seal;

  • whether the purchaser is a "Patient" or "Caregiver;"

  • the patient’s or primary caregiver’s photo;

  • a nine-digit ID number;

  • the CDPH website to verify the ID number;

  • the expiration date; and

  • the county that issued the card, with the county phone number.

Retailers can verify the validity of the nine-digit ID number on the website of the California Department of Public Health at http://www.calmmp.ca.gov/MMIC_Search.aspx. ( Special Notice L-486, California State Board of Equalization, November 2016; Tax Guide for Medical Marijuana Businesses, California State Board of Equalization, November 2016)

See Agriculture, for a discussion of an excise tax imposed upon purchasers of all marijuana and marijuana products effective January 1, 2018, and a tax on marijuana cultivators also effective January 1, 2018.

•Medicine

Medicines sold to licensed physicians, dentists, or podiatrists, health facilities, or to any division of state government for use in treating patients are also exempt. However, medicines furnished by surgical centers to patients pursuant to a doctor's order are not exempt because surgical centers are regarded as the consumers of medicines they dispense. (See ¶63-710, SUTA Series 425, Prescription Medicines)

A sales and use tax exemption also applies to prescription medicines furnished without charge by pharmaceutical manufacturers or distributors to medical doctors or health care facilities for treatment purposes, and furnished to institutions of higher education for instruction or research purposes. The exemption also specifically applies to the cost of medicine packaging materials, and to constituent elements and ingredients used to produce medicines. Dual purpose devices used to administer and to package medicine, such as pre-filled syringes, are exempt. However, delivery devices furnished separately or included in distributed packages are subject to tax. ( Sec. 6369, Rev. & Tax. Code; Reg. 1591, 18 CCR)

For exemption purposes, "medicine" means any product fully implanted or injected in the human body, or any drug or any biologic approved by the U.S. Food and Drug Administration to diagnose, cure, mitigate, treat, or prevent any disease, illness, or medical condition regardless of ultimate use, or any substance or preparation intended for use by external or internal application to the human body in the diagnosis, cure, mitigation, treatment or prevention of disease and which is commonly recognized as a substance or preparation intended for that use. "Health facilities" is defined to include facilities, places, and buildings organized, maintained, and operated to diagnose, prevent, and treat human illness for at least a 24-hour period. (Sec. 1250, Hlth. & Sfty. Code; Reg. 1591, 18 CCR)

California sales and use tax is inapplicable to the sale of all permanently implanted articles. This includes an implant’s interdependent internal and external components that operate together as one device in and on a person in whom the device is implanted (including ear implants), unless the device is excluded from the definition of "medicines." ( Reg. 1591(b)(2), 18 CCR)

Botox.—Botox and Botox Cosmetic are injected biologics and are considered to be medicines under Regulation 1591. The FDA states that Botox and Botox Cosmetic are approved to treat moderate to severe frown lines between the eyebrows, a medical condition that is not serious. As such, CDTFA staff accepts that doctors only give patients injections of Botox and Botox Cosmetic when, in their judgment, they are treating a medical condition. ( Tax Information Bulletin, California State Board of Equalization, December 2006, ¶404-201)

Breast implants.—Breast implants are approved by the FDA for use in both reconstructive and cosmetic surgeries and are considered to be medicines regardless of the type of surgery performed. ( Tax Information Bulletin, California State Board of Equalization, December 2006, ¶404-201)

Exempt medicine.—In general, the exemption applies to qualified items in these categories:

  • artificial eyes or limbs and their replacement parts;

  • catheters;

  • permanently implanted articles;

  • insulin, and insulin syringes, as well as glucose test strips and skin puncture lancets used to determine a diabetic patient's blood sugar level, insulin amounts needed, and other diabetic control medication, furnished by a pharmacist as required under a physician's instructions for treatment of diabetes as directed by a physician;

  • mammary prostheses and ostomy appliances and supplies;

  • medical oxygen delivery systems (see "Medical oxygen delivery systems" below);

  • orthotic devices and their replacement parts (however, orthopedic shoes and supportive devices for the foot are not exempt unless they are an integral part of a leg brace or artificial leg);

  • programmable drug infusion devices to be worn on or implanted in the body;

  • prosthetic devices or their replacement parts (other than dentures and auditory, ophthalmic, or ocular devices). Included in this exempt category are stump socks, stockings worn with artificial legs, intraocular lenses, ear implants, and breast and tissue expanders;

  • sutures, whether or not permanently implanted;

  • wheelchairs, crutches, canes, quad canes, and walkers; and

  • vehicles and vehicle modifications for the physically handicapped.

( Sec. 6369, Rev. & Tax. Code; Reg. 1591, 18 CCR; Reg. 1591.1, 18 CCR; Reg. 1591.2, 18 CCR; Reg. 1591.4, 18 CCR)

Devices used to insert medication into patients may qualify as exempt "nonreturnable containers" if they are prefilled with medication, are disposable, and may be used to administer medication only to one patient. See ¶63-710, SUTA Series 425, Prescription Medicines.

Injected collagen and other dermal implants.—Injected collagen and similar products require FDA approval because they are injected under the patient's skin. Generally, such implants are approved by the FDA for correction of skin contour deficiencies such as wrinkles and acne scars and are considered to be medicines regardless of their ultimate use (whether used to correct scarring or the appearance of lines and wrinkles from aging). ( Tax Information Bulletin, California State Board of Equalization, December 2006, ¶404-201)

Supplements used to treat obesity.—When dietary supplements and adjunct products do not qualify as food products, as specified, and are furnished by a physician to his or her own patients as part of a medically supervised weight loss program to treat obesity, such products are regarded as medicine and are exempt from California sales and use taxes. Very low calorie meal replacement products meet the definition of "medicine" because they are intended for use by internal application to the human body in the treatment of obesity which is commonly recognized as a disease. ( Reg. 1591(e)(7), 18 CCR; Reg. 1602(a)(4), 18 CCR)

Taxable medical devices and items.—The exemption for medicines and drugs is inapplicable to:

  • alcoholic beverages;

  • dentures, including removable plates, fixed permanent bridges, and permanently implanted artificial teeth, crowns, caps, and other dental prosthetic materials and devices;

  • hospital beds (including specialized or therapeutic beds);

  • orthodontic, auditory, ophthalmic, or ocular devices or appliances; and

  • splints, bandages, pads, dressings, instruments, appliances, devices, or other mechanical, electronic, optical, or physical equipment or articles (or their components or accessories).

( Sec. 6369, Rev. & Tax. Code; Reg. 1591, 18 CCR; Reg. 1591.1, 18 CCR; Reg. 1591.2, 18 CCR; Reg. 1591.4, 18 CCR)

•Menstrual hygiene products

A sales and use tax exemption is available for menstrual hygiene products. "Menstrual hygiene products" are defined as: tampons; sanitary napkins primarily designed and labeled for menstrual hygiene use; menstrual sponges; and menstrual cups. ( Sec. 6363.10, Rev. & Tax. Code)

•Optical goods

Physicians, surgeons, or optometrists are the consumers, and are therefore taxable on their purchases, of materials such as eyeglasses, frames, and lenses used or furnished in performing their professional services. Sunglasses without correction, including clip-on sunglasses, are covered by this provision if furnished to correct a condition pursuant to a diagnosis. In all other instances, the physician, optometrist, or dispensing optician is the retailer of the sunglasses. ( Sec. 6018, Rev. & Tax. Code; Reg. 1592, 18 CCR)

A dispensing optician who fills a prescription prepared by a physician, surgeon, or optometrist for glasses, frames, sunglasses, including clip-on sunglasses, or other materials, or a licensed pharmacist who fills a prescription prepared by a physician or optometrist for replacement contact lenses, is also deemed to be the consumer of those items and must pay tax on his or her own purchase of such items. ( Sec. 6018, Rev. & Tax. Code; Reg. 1592(b), 18 CCR)

For a related discussion of sales, purchases, and services of ophthalmologists and optometrists, see ¶60-665 Services.

•Prosthetic devices and equipment

California's exemption for prescription medicines and drugs generally covers prosthetic devices and equipment (other than dental prostheses or auditory, ophthalmic, or ocular devices) furnished under a physician's written order. ( Sec. 6369, Rev. & Tax. Code; Sec. 6369.2, Rev. & Tax. Code; Reg. 1591, 18 CCR)

Mammary prostheses and ostomy appliances and supplies.—Medicine distribution exemption criteria do not apply to mammary prostheses and ostomy appliances and related supplies, provided such items are dispensed pursuant to a written order by a person authorized to issue a prescription. Ostomy appliances and related supplies used to accommodate patients after surgery are exempt from tax; however, such items are subject to tax when used as an adjunct to surgical procedure unless they remain in the patient for postoperative purposes. Exempt ostomy appliances include endotracheal and tracheostomy tubes used post-operatively or for home care to evacuate metabolic waste. Kidney dialysis machines and accessories are also exempt as ostomy appliances and related supplies. An accessory qualifies as a related supply item, provided it is either a necessary and integral part of the machine itself or it is a substance or preparation for external or internal application to the dialysis patient's body. ( Reg. 1591, 18 CCR)

Wheelchairs, crutches, and canes.—Wheelchairs, crutches, canes (including white canes used by the blind), quad canes, and walkers, and replacement parts for such items are exempt, provided they are sold to an individual for that person's personal use as directed by a licensed physician. ( Sec. 6369.2, Rev. & Tax. Code; Reg. 1591.2, 18 CCR) Three-wheel scooters that are similar in design and function to conventional wheelchairs qualify as wheelchairs for exemption purposes. ( Reg. 1591.2, 18 CCR)

Replacement parts eligible for exemption from tax include, but are not limited to, batteries for electric wheelchairs; belts and cushions sold to replace or supplement the basic items originally sold with wheelchairs, lap boards and trays attached to wheelchairs and considered a part of the wheelchair; and rubber tips, wheels, and other such items prescribed to replace an original component of the device. Mechanical devices that help a patient to eat or write do not qualify as exempt replacement parts unless they are part of the device itself. Restraints and similar items that do not become a part of a wheelchair or other such prescribed service are also not exempt replacement parts. ( Reg. 1591.2, 18 CCR)

•Recordkeeping requirements

Pharmacies must keep records supporting all deductions claimed under the prescription medicine exemption. Physicians, surgeons, and podiatrists must keep accurate records of drugs furnished by them. Any deduction for sales of medicines must be supported by appropriate records. This requirement is satisfied when records show the name of the purchaser, the name of the doctor, the date of sale, the item sold, and the sale price. All prescriptions filled must be kept on file and open for inspection by duly constituted authorities. ( Reg. 1591, 18 CCR)

•Vehicles and vehicle modifications for the physically handicapped

Items and materials used to modify a vehicle for use by a handicapped person also are exempt, provided they are necessary to enable the vehicle to transport a handicapped person. Also, when a handicapped person purchases a vehicle, gross receipts attributable to the portion of the vehicle modified to enable it to transport physically handicapped persons are not subject to tax. For exemption purposes, such materials must be incorporated into the vehicle; tax does not apply to such materials, whether or not they are installed by the retailer. ( Sec. 6369.4, Rev. & Tax. Code; Reg. 1591.3, 18 CCR)

Items eligible for exemption include, but are not limited to:

  • interlock systems;

  • upper torso restraints;

  • air bags of a unique type to raise or lower the vehicle for loading or unloading;

  • running boards on lower side of vehicle;

  • bolt cams used to restrain a wheelchair inside a van;

  • seat belts;

  • tire carriers to hold a spare, installed within a handicapped person's reach;

  • AC lights to illuminate the ramp or elevator area;

  • hardware for privacy curtains;

  • air compressors for use with medical equipment;

  • 12-volt receptacles to supply power to medical equipment;

  • 4-point tie-down systems to restrain a wheelchair; and

  • allocable portions of various interior packages, interior materials, and conversions necessary to modify a vehicle to transport physically handicapped persons.

( Reg. 1591.3, 18 CCR)

Certain items do not qualify for exemption from tax, whether or not they are installed on a vehicle to transport physically handicapped persons. Such items include, but are not limited to:

  • upper torso durable pads (unless part of the restraint);

  • portable ramps (telescopic);

  • air conditioners (unless necessary to transport certain types of disabled persons);

  • fire extinguishers;

  • CB radios (unless shown to be necessary to transport certain types of disabled individuals);

  • leather seat covers;

  • extra windows and their accessories;

  • upgrades to the interior (upgrade to leather seats); and

  • engine covers.

( Reg. 1591.3, 18 CCR)

•Vitamins, minerals, herbs, and dietary supplements

Vitamins, minerals, herbs, and other supplements sold or furnished under qualifying criteria, are exempt, provided they are used to cure, mitigate, treat or prevent disease, and provided they are commonly recognized as intended for such use. ( Reg. 1591, 18 CCR) However, food products in liquid, powdered, granular, tablet, capsule, lozenge, or pill form that are sold as dietary supplements or adjuncts are subject to tax ( Sec. 6359(c), Rev. & Tax. Code; Reg. 1602(a)(5), 18 CCR) unless they qualify as exempt prescription medicines.

See ¶60-390 Food and Grocery Items, for a more complete discussion of food products, food supplements, and dietary supplements.

Michael Fleming