Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
410.0000 PERMITS—Regulation 1699
(b) PERSONS MAKING NONTAXABLE SALES
410.0246 Artificial Eyes. A company, whose sole function is to manufacture and fit artificial eyes on patients referred by ophthalmologists, questioned whether it is required to register as a seller and hold a seller's permit. All fittings are done pursuant to the order or prescription of an ophthalmologist. The question was in light of the October 1, 1977 amendments to section 6369 and Regulation 1591 exempting sales of artificial eyes and their replacement parts.
Prior to October 1, 1977 ophthalmic or ocular devices or appliances were specifically excluded from the term "medicines." Effective October 1, 1977, section 6369 was amended to add "artificial eyes or their replacement parts" to the term "medicines." As a result of this amendment, artificial eyes or their replacement parts which are furnished pursuant to a written order of a physician shall be deemed to be dispensed on prescription and their charges are exempt from tax when furnished to patients by companies such as this one. However, under Revenue and Taxation Code section 6018, to the extent that this company only furnished artificial eyes, eye markers, and sclera lenses pursuant to the written order or prescription of an ophthalmologist, it does not sell tangible personal property the gross receipts of which are subject to tax. As such, this company will not be required to register with the Board as a seller. 4/21/81.