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ST 2003- 10 - H.B. 95 – Drugs, Prosthetic Devices, Mobility
Enhancing Equipment, and Durable Medical Equipment -
July 10, 2003
Sales and Use Tax
H.B. 95 – Drugs, Prosthetic Devices, Mobility
Enhancing Equipment, and Durable Medical Equipment
Am. Sub. H.B. 95 contains a number of changes intended to
bring Ohio statutes into compliance with the terms of the
Streamlined Sales and Use Tax Agreement. Information on the
Streamlined Agreement can be found at www.streamlinedsalestax.org.
Effective July 1, 2003, H.B. 95 inserted definitions for the
terms "drug," "prescription," "durable medical equipment,"
"mobility enhancing equipment," and "prosthetic device." H.B.
95 also modified the sales tax exemptions for drugs and
medical equipment found in R.C. 5739.02(B)(18) and (19).
Definitions of the terms "drug," "prescription," "durable
medical equipment," "mobility enhancing equipment," and
"prosthetic device" are located in new divisions (FFF)
through (JJJ) of R.C. 5739.01. These new definitions are used
to define the parameters of revised exemptions to the sales
tax. The new definitions provide:
(FFF) "Drug" means a compound, substance, or preparation,
and any component of a compound, substance, or
preparation, other than food, dietary supplements, or
alcoholic beverages that is recognized in the official
United States pharmacopoeia, official homeopathic
pharmacopoeia of the United States, or official national
formulary, and supplements to them; is intended for use
in the diagnosis, cure, mitigation, treatment, or
prevention of disease; or is intended to affect the
structure or any function of the body.
(GGG) "Prescription" means an order, formula, or recipe
issued in any form of oral, written, electronic, or other
means of transmission by a duly licensed practitioner
authorized by the laws of this state to issue a
(HHH) "Durable medical equipment" means equipment,
including repair and replacement parts for such
equipment, that can withstand repeated use, is primarily
and customarily used to serve a medical purpose,
generally is not useful to a person in the absence of
illness or injury, and is not worn in or on the body.
(III) "Mobility enhancing equipment" means equipment,
including repair and replacement parts for such
equipment, that is primarily and customarily used to
provide or increase the ability to move from one place to
another and is appropriate for use either in a home or a
motor vehicle, that is not generally used by persons with
normal mobility, and that does not include any motor
vehicle or equipment on a motor vehicle normally provided
by a motor vehicle manufacturer.
(JJJ) "Prosthetic device" means a replacement,
corrective, or supportive device, including repair and
replacement parts for the device, worn on or in the human
body to artificially replace a missing portion of the
body, prevent or correct physical deformity or
malfunction, or support a weak or deformed portion of the
body. As used in this division, "prosthetic device" does
not include corrective eyeglasses, contact lenses, or
The current exemptions for drugs and medical equipment
found in R.C. 5739.02(B)(18) and (19) were substantially
revised by H.B. 95. In many cases, these amendments will
broaden the exemptions provided. In some cases, however,
previously exempt items may become taxable.
R.C. 5739.02(B)(18), effective July 1, 2003 provides
Sales of drugs for a human being, dispensed pursuant to a
prescription; insulin as recognized in the official
United States pharmacopoeia; urine and blood testing
materials when used by diabetics or persons with
hypoglycemia to test for glucose or acetone; hypodermic
syringes and needles when used by diabetics for insulin
injections; epoetin alfa when purchased for use in the
treatment of persons with medical disease; hospital beds
when purchased for use by persons with medical problems
for medical purposes; and medical oxygen and medical
oxygen-dispensing equipment when purchased for use by
persons with medical problems for medical purposes;
This new provision represents several changes from prior law.
Most importantly, the exemption for drugs has been expanded.
Formerly, only drugs "dispensed by a licensed pharmacist"
qualified for exemption. This precluded exemption for most
drugs dispensed by a physician.
As revised, R.C. 5739.02(B)(18) provides exemption for any
drug dispensed pursuant to a prescription, whether or not
dispensed to the patient by a pharmacist. The new language
will include drugs dispensed by a physician in the course of
his or her practice, such as vaccines, antibiotics, and
chemotherapy drugs, whether given to the patient or injected.
The new language retains the limitation from prior law that
provides the exemption only for drugs "for a human being."
Drugs for animals are not exempted by this provision, but
taxable to a veterinarian as a "consumer" under R.C.
5739.01(D)(2). However, other exemptions may, in some cases,
apply to veterinary drugs. For example, drugs used to treat
farm livestock may be exempted under the "used directly in
For prescription drugs dispensed by a pharmacist, the
pharmacist must maintain the prescription records required by
law to establish its exempt sales. No exemption is provided
for over-the-counter type drugs, such as aspirin, that are
purchased without a prescription.
Prior law allowed exemption for epoetin alfa only when used
in the treatment of end-stage renal disease. H.B. 95 amended
the provision for epoetin alfa to allow exemption when it is
used to treat a "medical disease." The specific inclusion in
R.C. 5739.02(B)(18) of insulin and epoetin alfa does not
create any limitation on the operation of this section to
exempt drugs dispensed on the prescription of a licensed
medical practitioner. The final change in R.C. 5739.02(B)(18)
is the inclusion of the word "medical" before both "oxygen"
and "oxygen dispensing equipment."
R.C. 5739.02(B)(19) has been significantly revamped by H.B.
95. Effective July 1, 2003, that section will provide sales
tax exemption for:
Sales of prosthetic devices, durable medical equipment
for home use, or mobility enhancing equipment, when made
pursuant to a prescription and when such devices or
equipment are for use by a human being.
There are two basic limitations on the scope of the exemption
provided by this section. First the prosthetic device,
durable medical equipment, or mobility enhancing equipment
must be sold pursuant to a prescription, as defined in R.C.
5739.01(GGG). Vendors of these types of equipment must
maintain records of the sales made to a consumer under the
order of a licensed medical practitioner (prescription) to
establish the claim of exemption.
Second, the device must be for use by a human being.
Prosthetic devices, mobility enhancing equipment or durable
medical equipment for use by or in the treatment of animals
do not qualify for this exemption.
Prosthetic devices, as defined in R.C. 5739.01(JJJ), include
*** worn on or in the human body to artificially replace
a missing portion of the body, prevent or correct
physical deformity or malfunction, or support a weak or
deformed portion of the body.
Included in this exemption would be such items as artificial
limbs, prosthetic eyes, breast prostheses, braces, ostomy
appliances, and joint replacements. The exemption would also
include items such as hairpieces for chemotherapy patients if
they are prescribed by a medical practitioner. However, the
statute continues to specifically exclude
from the definition the following devices, "eyeglasses,
contact lenses, and dental prostheses."
Durable medical equipment as defined in R.C. 5739.01(HHH)
will be exempt so long as the equipment is "for home use."
Purchases of medical equipment for use in physicians’
offices, hospitals, nursing homes or treatment centers do not
qualify for this exemption. Some of these entities may still
be able to qualify for exemption if, for example, the entity
is a charitable organization, or a state agency, or a
political subdivision of the state. [Note also that "hospital
beds" and "oxygen dispensing equipment" that are "for use by
persons with medical problems for medical purposes" are
exempt under R.C. 5739.02(B)(18). That exemption does not
contain the "home use" exclusion.]
Examples of the types of durable medical equipment that would
qualify for the exemption, if for home use, include bath and
shower chairs, traction equipment, and dialysis equipment.
Effective July 1, 2003, items that would not qualify as
durable medical equipment include items that are not designed
for repeated use such as disposable diapers (including adult
diapers), bandages, or nasal strips.
The final area of exemption in R.C. 5739.02(B)(19) is
"mobility enhancing equipment," as defined in R.C.
5739.01(III). This exemption includes such items as crutches,
walkers, chairlifts, wheelchairs [whether motorized or not].
It also includes devices used to lift or transport
wheelchairs in a motor vehicle, and other special devices or
equipment to allow persons with a physical disability to
operate a motor vehicle.
However, the exemption does not extend to any motor vehicles,
or to equipment on a motor vehicle that is normally provided
by a motor vehicle manufacturer. For example, a person might
purchase a van, and then have the van customized to
accommodate a wheelchair. In that case, the purchaser could
not claim exemption on the purchase of the van, but could
claim exemption on the customizing so long as it was not
equipment that is normally provided by a motor vehicle
To be exempt, mobility enhancing equipment must be
"appropriate for use either in a home or a motor vehicle."
Thus, purchases by a retailer, of motorized shopping carts to
assist persons with disabilities in shopping at the store
would not qualify for exemption as mobility enhancing
equipment. The equipment must also be of a type "that is not
generally used by persons with normal mobility." Thus a
bicycle would not qualify for the exemption.
Any vendor of mobility enhancing equipment must maintain a
record of the order of a licensed medical practitioner to
establish the exempt nature of the sale.
If you have questions regarding any matter covered in this
release, please call 1-888-405-4039 (Ohio Relay Service for
the Speech or Hearing Impaired: 1-800-750-0750).