Use tax has been getting a lot of attention in recent months, as revenue-seeking states try to capture revenue from untaxed out-of-state purchases. Increasingly, state departments of revenue are reminding residents that if they didn’t pay sales tax on purchases made in a different state or remotely (via Internet, catalog or phone), they probably owe use tax.
Bucking the trend, the Department of Revenue recently ruled that use tax is not owed on a control unit required to operate catheters. The reasoning is based on Iowa law, which reads, “Sales or rental of power devices especially designed to operate prosthetic, orthotic, or orthopedic devices shall be exempt from tax.” ((IAC701-231.8(4)).
Since the control unit is useless for any other purpose without the catheter, … [it] is exempt from use tax.”
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