The North Carolina Department of Revenue ("Department") recently ruled that therapeutic footwear was exempt as a prosthetic device. The therapeutic footwear provided support to its customers' feet and helped prevent ulcers, calluses, and other complications to the feet because of diabetes. North Carolina exempts prosthetic devices. A prosthetic device is a replacement, corrective, or supporting device worn on or in the body that (1) artificially replaces a missing body part, (2) prevents or corrects a physical deformity or malfunction, or (3) supports a weak or deformed body part.
The Department determined that the therapeutic footwear served as a supporting device that customers wore on their bodies to prevent or correct a deformity or malfunction of the feet because of diabetes. As a result, the therapeutic footwear was exempt.