The Missouri Department of Revenue recently issued a letter ruling discussing the taxability of embolization products sold in the state. Mo. Ltr. Rul. No. LR 7142 (Dept. of Revenue Aug. 31, 2012). A medical device manufacturer requested the ruling to determine whether its sales of embolization devices are subject to tax. These devices are used to deliberately block blood flow within the vein or artery in order to achieve a therapeutic effect. The embolization device is delivered through a catheter to embolize vessels in hypervascular tumors and arteriorvenous malformations. Once the embolization device is in the artery or vein, it will stop or reduce blood flow by swelling to its specific maximum size.
While sales of tangible personal property are generally subject to tax, Missouri exempts sales of prosthetic and orthopedic devices. Mo. Rev. Stat. secs. 144.020.1(1), 144.030.2(18). "Prosthetic device" is defined as "a device that replaces all or part of the function of a permanently inoperative or malfunctioning internal body organ and is medically required." Mo. Code Regs. Ann. tit. 12, sec. 10-110-013. "Orthopedic device" is defined as a "rigid or semi-rigid leg, arm, back or neck brace and casting materials which are directly used for the purpose of supporting a weak or deformed body member or restricting or eliminating motion in a diseased or injured part of the body." Mo. Code Regs. Ann. tit. 12, sec. 10-110-013.
According to the DOR's letter ruling, the embolization device does not satisfy the definition of "prosthetic device," as it does not replace the function of a permanently inoperative or malfunctioning internal body organ. Similarly, the embolization device does not fit within the definition of "orthopedic device." The device is not rigid or semi-rigid casting material that is used to support a body member, and it does not restrict or eliminate motion in a diseased or injured part of the body. Therefore, the embolization device is subject to sales tax in Missouri as tangible personal property.