Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2011
Sales And Use Tax Law
CHAPTER 4. EXEMPTIONS
Article 1. General Exemptions
6369. Prescription medicines. (a) There are exempted from the taxes imposed by this part the gross receipts from the sale in this state of, and the storage, use, or other consumption,in this state of, medicines:
(1) Prescribed for the treatment of a human being by a person authorized to prescribe the medicines, and dispensed on prescription filled by a registered pharmacist in accordance with law.
(2) Furnished by a licensed physician and surgeon, dentist, or podiatrist to his or her own patient for treatment of the patient.
(3) Furnished by a health facility for treatment of any person pursuant to the order of a licensed physician and surgeon, dentist, or podiatrist.
(4) Sold to a licensed physician and surgeon, podiatrist, dentist, or health facility for the treatment of a human being.
(5) Sold to this state or any political subdivision or municipal corporation thereof, for use in the treatment of a human being; or furnished for the treatment of a human being by a medical facility or clinic maintained by this state or any political subdivision or municipal corporation thereof.
(6) Furnished without charge by a pharmaceutical manufacturer or distributor to a licensed physician, surgeon, dentist, podiatrist, or health facility for the treatment of a human being, or furnished by a pharmaceutical manufacturer or distributor without charge to an institution of higher education for instruction or research, provided that the exemption provided in this paragraph is limited to medicines of a type that can be dispensed only (A) for the treatment of a human being and (B) pursuant to prescriptions issued by persons authorized to prescribe medicines. The exemption provided in this paragraph shall include the materials used to package, and the constituent elements and ingredients used to produce, the medicines described in this paragraph and is intended to preclude any imposition of tax pursuant to Section 6094 or 6095 with respect to those materials, elements, and ingredients.
(b) "Medicines" as used in this section, means any substance or preparation intended for use by external or internal application to the human body in the diagnosis, cure, mitigation, treatment, or prevention of disease and commonly recognized as a substance or preparation intended for that use. However, "medicines" does not include any of the following:
(1) Any auditory, prosthetic, ophthalmic, or ocular device or appliance.
(2) Articles that are in the nature of splints, bandages, pads, compresses, supports, dressings, instruments, apparatus, contrivances, appliances, devices, or other mechanical, electronic, optical or physical equipment or article or the component parts and accessories thereof.
(3) Any alcoholic beverage the manufacture, sale, purchase, possession, or transportation of which is licensed and regulated by the Alcoholic Beverage Control Act (Division 9 (commencing with Section 23000) of the Business and Professions Code).
(c) Notwithstanding subdivision (b), "medicines" as used in this section means and includes any of the following:
(1) Sutures, whether or not permanently implanted.
(2) Bone screws, bone pins, pacemakers, and other articles, other than dentures, permanently implanted in the human body to assist the functioning of any natural organ, artery, vein, or limb and which remain or dissolve in the body.
(3) (A) Orthotic devices, other than orthodontic devices, designed to be worn on the person of the user as a brace, support, or correction for the body structure, and replacement parts for these devices. However, orthopedic shoes and supportive devices for the foot are not exempt unless they are custom-made biomechanical foot orthoses or are an integral part of a leg brace or artificial leg.
(B) For purposes of this paragraph, "custom-made biomechanical foot orthoses" means an individually prescribed foot orthosis which is custom fabricated over a neutral or near neutral subtalar joint with a pronated midtarsal joint position positive plaster model of the patient's foot, which model, when the cast is modified to support the osseous position of the forefoot in relationship to the rearfoot, embodies the angular osseous relationships of the anterior and posterior portions of the foot.
(4) Prosthetic devices, and replacement parts for those devices, designed to be worn on or in the person of the user to replace or assist the functioning of a natural part of the human body, other than auditory, opthalmic, and ocular devices or appliances, and other than dentures, removable or fixed bridges, crowns, caps, inlays, artificial teeth, and other dental prosthetic materials and devices.
(5) Artificial limbs and eyes, or their replacement parts, for human beings.
(6) Programmable drug infusion devices to be worn on or implanted in the human body.
(d) "Health facility" as used in this section has the meaning ascribed to it in Section 1250 of the Health and Safety Code, and also includes "clinic" as defined in Section 1200 of the Health and Safety Code.
(e) Insulin and insulin syringes furnished by a registered pharmacist to a person for treatment of diabetes as directed by a physician shall be deemed to be dispensed on prescription within the meaning of this section.
(f) Orthotic and prosthetic devices, and replacement parts for these devices, furnished pursuant to the written order of a physician or podiatrist, shall be deemed to be dispensed on prescription within the meaning of paragraph (1) of subdivision (a), whether or not the devices are furnished by a registered pharmacist.
(g) Mammary prostheses, and any appliances and related supplies necessary as the result of any surgical procedure by which an artificial opening is created in the human body for the elimination of natural waste, shall be deemed to be dispensed on prescription within the meaning of this section.
History.—Added by Stats. 1961, p. 2273, operative January 1, 1962. Stats. 1962, p. 12, in effect April 23, 1962, added a provision concerning the furnishing of medicine by a physician and surgeon or podiatrist, or a county or other licensed hospital, dispensed by a registered pharmacist, pursuant to Sections 4051 or 4052.1 of the Business and Professions Code; and added the second paragraph. Stats. 1963, p. 1723, in effect September 20, 1963, renumbered the section, deleted the reference to Section 4031 of the Business and Professions Code, deleted the second paragraph, and added (5), (b), (c), and (d). Stats. 1970, p. 2999, operative July 1, 1971, included "dentist" as person whose furnishing and purchases of prescription medicines is exempt, renumbered former (5)(c) and (5)(d) as (5)(d) and (5)(e) respectively and added new (5)(c). Stats. 1972, Ch. 877, operative October 1, 1972, added the words "other than dentures," and "and artificial limbs or their replacement parts, for human beings." to part (c). Stats. 1977, Ch. 1245, operative October 1, 1977 through December 31, 1982, changed "hospital" to "health facility" in paragraphs (a)(3) and (a)(4); deleted "prosthetic" in paragraph (b) following "(1) any auditory"; in paragraph (c) added "shall" before "mean", added a colon and "(1)" following "include" and before "sutures"; added a semicolon and "(2)" following "implanted"; added a semicolon following "in the body"; added subparagraphs (3), (4), and added "(5)". In paragraph (d) changed "Hospital" to "Health facility", and Section "1401" to "1250", and added paragraph (f). Stats. 1978, Ch. 229, operative August 1, 1978 through December 31, 1982, added "prosthetic" following "auditory" to (b) (1) added "other than orthodontic devices," following "orthotic devices" added "and replacement parts for such devices" following "body structure" to (c) (3) added "and replacement parts for such devices" following "prosthetic devices" rearranged wording and added rest of sentence following "other than dentures" to (c) (4) added new (f) and changed former (f) to (g). Stats. 1982, Ch. 1589, in effect January 1, 1983, added "(6)" in subdivision (c), and added "and insulin syringes" after "insulin" in subdivision (e). Stats. 1987, Ch. 384, in effect September 3, 1987, at the end of (a)(1), (a)(2), (a)(3), deleted ", or" and substituted a period; in (a)(2) added "or her" after "him", in (b) changed "section mean and include" to "section, means and includes" and changed "intended for such use; provided that 'medicines' do not include" to "intended for that use. However, 'medicines' does not include any of the following", ended (b)(1) and (b)(2) with periods and deleted the commas, in subdivision (c) changed "shall mean and include" to "means and includes any of the following", at the end of (c)(1), (c)(2), (c)(3), (c)(4), replaced semicolons with periods, in (c)(3), changed "for such devices; provided, that" to "for these devices. However, " added "custom-made biomechanical foot orthoses or" before "an integral part" and added a definition for "custom-made biomechanical foot orthoses", in (c)(5) deleted "and" before "(6)", in paragraph (f) substituted "these" for "such", added "or podiatrist" following "physician", and changed "paragraph (a)(1) of this section" to "(1) of subdivision (a)." Stats. 1994, Ch. 857, in effect September 27, 1994, but operative January 1, 1995, added "in this state of" after "sale,", deleted a comma after "consumption", and added a comma after "state of" in subdivision (a); added paragraph (6) to subdivision (a); deleted "and includes" after "means", added a comma after "treatment", and deleted "which is" after "disease and" in subdivision (b); added a comma after "opthalmic" in paragraph (1) of subdivision (b); substituted "that" for "which" after "Articles" in paragraph (2) of subdivision (b); added a comma after "possession" in paragraph (3) of subdivision (b); added paragraph letter designation (A) after "(3)" and added a comma after "support" in paragraph (3) of subdivision (b); created new paragraph (B) in subdivision (c) with the former third sentence of paragraph (3) therein; substituted "those" for "such" after "parts for", and added commas after "opthalmic" and "teeth" in paragraph (4) of subdivision (c). Stats. 2001, Ch. 706 (AB 646), in effect October 11, 2001, operative April 1, 2002, added ", and also includes . . . Safety Code" after "and Safety Code" in subdivision (d).
Antiseptic sudsing skin scrub.—Antiseptic skin cleanser used by hospitals on patients and for preoperative scrubbing by operating personnel and hand cleansing by hospital personnel caring for patients was found to be a tax-exempt medicine since the cleanser, in all such uses, is applied to the human body in the mitigation and prevention of disease. The application of the cleanser by hospital personnel to their own bodies benefits the patient and constitutes a critical component of the patient's treatment. Purdue Frederick Co. v. State Board of Equalization (1990) 218 Cal.App.3d 1021.