The Michigan Department of Treasury recently issued a letter ruling reaffirming that sales of implantable devices to for-profit medical facilities are taxable.
The taxpayer was a for-profit medical facility that purchased implantable medical devices to sell to patients with a prescription. The implantable devices were sold to patients rather than used to render professional medical services to the patient.
The ruling determined that Michigan's prosthetic device exemption only applies when the device is "dispensed" to a patient. The term "dispense" does not apply to the purchase of a prosthetic device for resale by a medical facility. As a result, a medical facility cannot claim the prosthetic device exemption. However, a medical facility can purchase prosthetic devices for resale if they will be resold to patients rather than being administered to patients as a part of professional medical services.