An out-of-state company selling durable medical equipment and supplies was not subject to sales tax on its sales of insulin pumps. Missouri law provides and exemption for sales of insulin and sales of prosthetic or orthopedic devices. The insulin pump is a prosthetic device because it replaces a part of the function of an inoperative or malfunctioning pancreas by continuously releasing insulin into the body, like the pancreas would. Accordingly, sales of insulin pumps are exempt from tax.
The company’s sales of home blood glucose testing products and pump supplies are subject to sales tax when they are paid for by the company’s customer or an insurance company. The exemption for insulin, orthopedic, and prosthetic devices does not apply to home blood glucose testing products or pump supplies because they are not specifically identified as exempt or excluded from tax. On the other hand, sales of home blood glucose testing products and pump supplies are not subject to sales tax when paid for by Medicare or Medicaid when they are billed for such supplies by the company and pays the company directly for such supplies. Any amounts not paid by Medicare or Medicaid, such as co-payments, are subject to tax. (Letter Ruling No. LR6003, Missouri Department of Revenue, November 24, 2009)