The Indiana Department of Revenue (DOR) denied a taxpayer’s refund claim for sales tax paid on the purchase of a swim spa, which the taxpayer claimed is used for medical treatment.
The taxpayer claimed that she was entitled to a refund of sales tax paid since the swim spa has room to swim and exercise and is made for exercise and therapy. Indiana’s Sales Tax Information Bulletin 48 (October 2020), which addresses exempt sales of medical supplies and equipment, states that items such as hot tubs and other items that have general usage would typically not be exempt. It also specifies that the phrase “used exclusively” in “medical supplies or devices used exclusively for medical treatment” means the intended usage of the device by the manufacturer, not the use made of the device by the purchaser. The taxpayer attempted to differentiate the swim spa from a hot tub since it has room to swim and exercise whereas a hot tub does not. Further, the taxpayer’s prescription states that the swim spa is “to help increase mobility.” However, the state’s definition of “mobility enhancing equipment” specifies that the equipment “is not generally used by persons with normal mobility.” Swim spas are used by people with and without mobility issues, so they do not meet the definition of exempt “mobility enhancing equipment.”
Additionally, the taxpayer purchased the swim spa prior to receiving a prescription order from a physician. The invoice for the swim spa purchase is dated February 6, 2021. The prescription order is dated April 26, 2021. Regarding the timing discrepancy, the taxpayer stated that while the sales agreement was filled out on February 6, 2021, the swim spa was not delivered until May 3, 2021, and payment was not due until after the delivery was made. The DOR stated that the relevant date was February 6, 2021, the date of the sales agreement. Therefore, the swim spa was purchased in February 2021 without a prescription.
(Final Order Denying Refund No. 01-20221543, Indiana Department of Revenue, February 6, 2023, released April 19, 2023)