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Colorado: Some Medical Products Exempt From Sales Tax

  • Oct 31, 2012 | Gail Cole

Medical products used to treat injury and disease are exempt from sales and use tax in Colorado, according to a recent letter ruling issued by the Colorado Department of Revenue.

(C.R.S. 39-26-717) In order to qualify for the exemption, a product must meet one of the following qualifications:

  1. Materials Furnished as Part of a Licensed Provider's Professional Service: They must leave the licensed provider's office with the patient.
  2. Durable Medical Equipment: Equipment, including necessary repair and replacement parts, that:
    • Is not worn in or on the body;
    • Can withstand repeated use;
    • Is primarily used for medical purposes
    • Is generally not useful to a person in the absence of illness or injury.
  3. Prosthetic Device: An artificial part which replaces part of a body or assists a bodily function.

The recent Colorado letter ruling concerned a biotechnology company which sold a product that assists with surgical grafts.  Though the product in question did not meet the definition of durable medical equipment or prosthetic device, it did qualify for the materials furnished exemption.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.