Publication 45, Hospitals and Other Medical Facilities

This publication explains how California sales and use tax laws apply to hospitals and medical facilities, focusing on when these entities act as consumers versus retailers of tangible personal property. It outlines broad exemptions for items such as prescription medicines, patient meals, and qualifying medical devices, while identifying taxable activities like cafeteria sales, vending machine operations, and gift shop transactions. The guidance also highlights how tax rules apply across hospital departments, including laboratories, pharmacies, optical units, and visiting nurse programs.

More detailed sections describe taxable and nontaxable purchases, specific exemptions for implanted devices, ostomy supplies, blood products, and breast pumps, and rules for equipment leases and capital asset sales. The publication further explains administrative requirements such as recordkeeping, exemption and resale certificates, Medicare and MediCal impacts on tax reporting, and procedures for filing refund claims. It concludes with definitions, compliance guidance, and references to additional CDTFA resources.

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Please note: This publication summarizes the law and applicable regulations in effect when the publication was written. However, changes in the law or in regulations may have occurred since that time. If there is a conflict between the information in this publication and the law or regulations, decisions will be based on the law or regulations and not on this publication.

Revision June 2026