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Treatment of Medical Tax Codes in California

This article applies to:Avalara AvaTax Update

Medical products that meet California’s definition of medicine are exempt if purchased for a qualifying use.

Qualifying uses include medical products sold on prescription for human treatment or medical products sold to a licensed practitioner or health facility for human treatment.

 

Exempt Sales

The following tax codes are for medical products sold on prescription or sold to a practitioner or health facility for human treatment, so the codes are set to exempt in California.

"Sold on prescription" or "sold to a medical facility" were added to each tax code description as of the effective date.

Tax Code

Description

Effective Date

PH404962

Antiembolism stocking/supports/compression garments - sold on prescription

07/01/2018

PH405034

Knee Immobilizers - sold on prescription

07/01/2018

PH405314

Ointments - antibiotic - sold on prescription

07/01/2018

PH405058

Orthopedic supplies - sold on prescription

07/01/2018

PH405282

Dressing - medicated - sold on prescription

07/01/2018

PH404690

Medical Supplies - General: Urinal bag - sold on prescription

07/01/2018

PH404954

Abdominal belts - sold on prescription

07/01/2018

PH405002

Collar - cervical - sold on prescription

07/01/2018

PH405106

Supports - ankle - sold on prescription

07/01/2018

PH405250

Bandages - elastic - sold on prescription

07/01/2018

PH403362

Saline - sold on prescription

07/01/2018

PH405026

Immobilizer - sold on prescription

07/01/2018

PH405114

Supports - back - sold on prescription

07/01/2018

PH404122

Syringes - Insulin - Reusable - sold on prescription

07/01/2018

PH404970

Belts/Binders/Straps - sold on prescription

07/01/2018

PH405082

Splint - sold on prescription

07/01/2018

PH405266

Burn treatment supplies - sold on prescription

07/01/2018

PH405170

Alcohol & alcohol preps - sold on prescription

07/01/2018

PH401022

Acne Blackhead and Pimple Treatments Lotion and Cream ONLY (Containing BP / SA / Sulfur / Resorcinol / or Coal Tar) / Homeopathic Acne Lotion and Cream Treatments (Trumps CSAST) - sold on prescription

08/01/2018

PH403074

Human Tissue - Cosmetic Surgery - sold to medical facility

08/01/2018

PH403290

Drug - vaccines - sold on prescription

08/01/2018

PH403322

Irrigation solution - sold to medical facility

08/01/2018

PH404026

Catheter - gastrostomy - sold to medical facility

08/01/2018

PH405306

Hydrogen Peroxide - sold on prescription

08/01/2018

PH403242

Betadine - sold to medical facility

08/01/2018

PH404098

Catheter - wound drain/thoracic - sold to medical facility

08/01/2018

PH404866

Staplers - skin internal and external - sold to medical facility

08/01/2018

PH405042

Mastectomy bra/supplies - sold on prescription

08/01/2018

PH403306

Injectables - sold to medical facility

08/01/2018

PH404170

Cleanser - medicated - sold on prescription

08/01/2018

PH404946

Skin Graft Products - sold to medical facility

08/01/2018

PH403282

Drug - radiology - sold to medical facility

08/01/2018

PH404226

Contraceptive devices - sold on prescription

08/01/2018

PH404890

Sutures - sold to medical facility

08/01/2018

PH405066

Orthotic supplies - sold on prescription

08/01/2018

PH405202

Lotion - medicated - sold on prescription

08/01/2018

PH405186

Incontinence cream - sold on prescription

08/01/2018

PH405090

Stabilizers - sold on prescription

08/01/2018

PH403314

Iodine - sold on prescription

08/01/2018

PH404123

Diabetic Supplies:  Replacement Needles / Disposable Syringes - sold on prescription

08/01/2018

PH404162

Chest drain - sold to medical facility

08/01/2018

PH404194

Colostomy/ileostomy -appliance - sold on prescription

08/01/2018

PH405194

Laxatives - sold on prescription

08/01/2018

PH405234

Petroleum jelly - unscented uncolored - sold on prescription

08/01/2018

PH403330

IV solution - sold to medical facility

08/01/2018

PH404498

Scrub brushes - medicated - sold to medical facility

08/01/2018

PH405114

Supports - back - sold on prescription

08/01/2018

PH405122

Supports - elastic - sold on prescription

08/01/2018

PH403122

Skin Substitutes - Synthetic or Xenograft - sold to medical facility

08/01/2018

PH403378

Water - sterile - sold on prescription

08/01/2018

PH404874

Staples, ligatures, clips - sold to medical facility

08/01/2018

PH404906

Bone Cement - sold to medical facility

08/01/2018

PH404914

Implantable hardware - permanent - sold to medical facility

08/01/2018

PH404922

Mesh and internal repair material - sold to medical facility

08/01/2018

PH403138

Cast materials - sold to medical facility

08/01/2018

PH403370

Viscosupplements - sold to medical facility

08/01/2018

PH404138

Dialyzer - sold to medical facility

08/01/2018

PH404546

Stents and accessories - sold to medical facility

08/01/2018

PH404722

Wound care drain - sold to medical facility

08/01/2018

PH404882

Suture substitutes - sold to medical facility

08/01/2018

PH405050

Orthopedic appliance - sold to medical facility

08/01/2018

PH403082

Human Tissue - Dental/Periodontal - sold to medical facility

08/01/2018

PH403090

Human Tissue - Reconstructive Surgery - sold to medical facility

08/01/2018

PH404282

Enema - Prefilled - sold on prescription

08/01/2018

PH403858

Resuscitator - FLD - sold to medical facility

08/01/2018

PH403067

Diabetic Equipment:  Reusable Lancet Devices - sold on prescription

08/01/2018

PH403106

Porcine (pig) Tissue - Dental/Periodontal - sold to medical facility

08/01/2018

PH403298

Gel - sold on prescription

08/01/2018

PH404986

Boards - back - sold on prescription

08/01/2018

PH403098

Porcine (pig) Tissue - Cosmetic Surgery - sold to medical facility

08/01/2018

PH403850

Resuscitator - sold to medical facility

08/01/2018

PH400033

Diabetic Supplies - sold on prescription

08/01/2018

PH403114

Porcine (pig) Tissue - Reconstructive Surgery - sold to medical facility

08/01/2018

PH404626

Trach Care supplies - sold on prescription

08/01/2018

PH404938

Ports - permanent - sold to medical facility

08/01/2018

PH404930

Ports - nonpermanent - FLD - sold to medical facility

08/01/2018

Taxable Sales

Medical products that meet California's definition of medicine are taxable if they're purchased at retail without a prescription.

"Sold at retail” was added to each tax code description as of the effective date, to meet the needs of our clients selling medical products at retail.

Tax Code

Description

Effective Date

PH405099

Orthotic Supplies - sold at retail

07/01/2018

PH405245

Bandages - sold at retail

07/01/2018

PH403365

Saline - sold at retail

07/01/2018

PH405171

Alcohol & alcohol preps - sold at retail

07/01/2018

PH405260

Burn treatment supplies - sold at retail

07/01/2018

PH404121

Syringes - Insulin - Reusable - sold at retail

07/01/2018

PH404688

Urinal bag - sold at retail

07/01/2018

PH405244

Dressing - medicated - sold at retail

07/01/2018

PH405310

Ointments - antibiotic - sold at retail

07/01/2018

PH405057

Orthopedic supplies - sold at retail

07/01/2018

PH405307

Hydrogen Peroxide - sold at retail

08/01/2018

PH405043

Mastectomy bra/supplies - sold at retail

08/01/2018

PH404171

Cleanser - medicated - sold at retail

08/01/2018

PH404080

Ostomy appliances and related supplies - sold at retail

08/01/2018

PH404225

Contraceptive devices - sold at retail

08/01/2018

PH404891

Sutures - sold at retail

08/01/2018

PH405187

Incontinence cream - sold at retail

08/01/2018

PH403315

Iodine - sold at retail

08/01/2018

PH404125

Diabetic Supplies:  Replacement Needles / Disposable Syringes - sold at retail

08/01/2018

PH405195

Laxatives - sold at retail

08/01/2018

PH405233

Petroleum jelly - sold at retail

08/01/2018

PH403379

Water - sterile - sold at retail

08/01/2018

PH404883

Suture substitutes - sold at retail

08/01/2018

PH404283

Enema - Prefilled - sold at retail

08/01/2018

PH403068

Diabetic Equipment:  Reusable Lancet Devices - sold at retail

08/01/2018

PH403297

Gel - sold at retail

08/01/2018

PH400034

Diabetic Supplies - sold at retail

08/01/2018

PH404627

Trach Care supplies - sold at retail

08/01/2018

What should I do with the updated tax codes?

We encourage you to review your California medical tax codes for accuracy. You may need to remap SKUs or UPCs to new or updated codes to obtain the proper tax treatment. Also note that you may need to conduct a document review to ensure you can substantiate under audit that exempted medical products were sold on prescription or to another licensed practitioner or health facility for human treatment. Please contact Avalara Support if you have any questions.