Missouri DOR: Purchase of Medical Grade Oxygen Exempt, but Purchase of Nitrous Oxide Subject to Sales Tax

Monday, June 11th, 2012


The Missouri Department of Revenue (DOR) recently issued a letter ruling explaining the taxability of medical grade oxygen and nitrous oxide purchased and used in a dental practice. Mo. Ltr. Rul. No. LR 7101 (Dept. of Revenue May 29, 2012). The DOR ruled that the clinic's purchases of medical grade oxygen are not subject to tax, but the clinic's purchases of nitrous oxide are taxable.

The party that requested the ruling is a dental clinic that purchases medical grade oxygen and nitrous oxide. In order to sedate patients for dental treatment, the clinic's dentists mix the gasses together and administer the mixture to patients. Once a patient is under the desired effects of conscious sedation, the dentist may perform dental procedures. The clinic asked whether its purchases of the two different gasses were subject to tax.

In Missouri, tangible personal property and certain services are subject to tax. Mo. Rev. Stat. sec. 144.020.1. However, "all sales of medical oxygen, home respiratory equipment, and accessories," are specifically exempt from state and local tax. Mo. Rev. Stat. sec. 144.030.2(18). Additionally, Missouri regulations state that "sales of prescription drugs, . . . medical grade oxygen, . . . which may be dispensed by a licensed practitioner are exempt from tax." Mo. Code Regs. Ann. tit. 12, sec. 10-110.013(3)(A). Accordingly, the dental clinic's purchase of medical grade oxygen is exempt from tax.

In constrast, the clinic's purchase of nitrous oxide is subject to sales tax. Missouri's sales tax statutes exempt prescription drugs that require approval by the Federal Drug Administration (FDA), but nitrous oxide is not listed as a prescription drug requiring approval by the FDA. Additionally, the exemption statute does not specifically list any other medical gas as exempt besides medical grade oxygen. Thus, the DOR concluded that the clinic's purchase of nitrous oxide is subject to tax.

About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

New York Adopts New Economic Nexus Rule

Wednesday, January 23rd, 2019 -Effective January 2019, a retailer located outside of New York is required to collect use tax if, during the p...

New Commercial Farmer Certification Process in Louisiana

Monday, January 21st, 2019 -Effective January, 15, 2019, the Louisiana Department of Revenue has a new certification process for commercia...

Service Repairs to Petroleum Storage Tanks Exempt in...

Friday, January 18th, 2019 -Louisiana's Board of Tax Appeals recently ruled that repairs on petroleum storage tanks were not taxable. ...

Nevada Exempts Feminine Hygiene Products in 2019

Wednesday, January 16th, 2019 -Last year, Nevada voters approved via ballot measure changes to the Sales and Use Tax Act of 1955. Voters amen...

Cleaning of Beer-Tap Lines Not Taxable in Ohio

Monday, January 14th, 2019 -The Supreme Court of Ohio recently ruled that cleaning beer-tap lines is not taxable. The taxpayer was...

Louisiana Court of Appeals Finds Marketplace Facilitators...

Friday, January 11th, 2019 -The Louisiana Court of Appeals has recently addressed the sales tax liability of marketplace facilitators. A c...