Publication 45, Hospitals and Other Medical Facilities
Medicines, Medical Supplies, and Products

The exemptions described in this section are those that generally apply to hospitals and other medical service facilities. If you would like information on other exemptions (such as sales in interstate commerce or donations to qualified nonprofit organizations), please see publication 61, Sales and Use Taxes: Tax Expenditures.

Application of Tax to Medicines and Other Medical Products

The discussion of medicines and application of tax to medical products are divided into the categories listed below. As noted in the following pages, sales of some items are specifically exempted from tax, while others are exempt based on how they are used.

• Medicines.
• Mammary prosthesis/breast implants. See Mammary prostheses.
• Ostomy appliances and supplies. See Ostomy appliances and supplies.
• Insulin syringes. See Insulin syringes.
• Balloon catheters and other catheters. See Balloon catheters and other catheters.
• Wheelchairs, crutches, canes, quad canes, and walkers. See Wheelchairs, crutches, canes, quad canes, and walkers.
• Continuous passive motion machines. See Continuous passive motion (CPM) machines.
• Medical oxygen delivery systems/continuous positive airway pressure (CPAP) systems. See Medical oxygen delivery systems.

Medicines

Sales of medicines, as defined, are exempt from tax when sold or furnished under the specific conditions listed below.

"Medicines" means and includes any product fully implanted or injected in the human body, or drug or biologic, that has been approved by the U.S. Food and Drug Administration to diagnose, cure, mitigate, treat, or prevent any disease, illness, or medical condition.

"Medicines" is also defined as 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.

The complete definition of medicines can be found in Regulation 1591, Medicines and Medical Devices.

The following pages provide examples of items that are defined as medicines. It should be noted that orthodontic, prosthetic, auditory, ophthalmic, and ocular devices and appliances do not qualify as medicines for tax purposes unless they are specifically included in the definition of medicines, as summarized in this section.

To be exempt, medicines must be sold or furnished under the following conditions (some exceptions are noted later).

The medicine must be:

• 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, or
• Furnished by a licensed physician, surgeon, dentist, or podiatrist to their own patient for treatment of the patient, or
• Furnished by a health facility for treatment of any person pursuant to the order of a licensed physician, surgeon, dentist, or podiatrist, or
• Sold to a licensed physician, surgeon, dentist, podiatrist, or health facility for the treatment of a human being, or
• Sold to the State of California 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, or
• Furnished by a pharmaceutical manufacturer or distributor without charge to a licensed physician, surgeon, dentist, podiatrist, or health facility for the treatment of a human being, or to an institution of higher education for instruction or research. Such medicine must be of a type that can be dispensed only: (a) for the treatment of a human being, and (b) according to a prescription issued by persons authorized to prescribe medicines. This exemption applies to the constituent elements and ingredients used to produce the medicines and to the tangible personal property used to package such medicines.
• In the case of hemodialysis products, supplied on order of a licensed physician and surgeon to a patient by a registered pharmacist or by a manufacturer, wholesaler, or other supplier authorized by section 4054 or 4059 of the Business and Professions Code to distribute such products directly to hemodialysis patients.

Drugs, preparations, and similar substances

Tax does not apply to the sale or use of any substance or preparation that is intended for use by external or internal application to the human body in the diagnosis, cure, mitigation, treatment, or prevention of disease and is commonly recognized as intended for such use, when sold or furnished under the conditions listed above.

Examples:

Articles permanently implanted in the human body

Tax does not apply to the sale or use of articles permanently implanted in the human body to assist in the functioning of any natural organ, artery, vein, or limb, and which remains or dissolves in the body, when sold or furnished under the conditions listed above.

An item is considered to be permanently implanted if its removal is not anticipated.

Examples:

With specific exceptions, items that replace, rather than assist, the functioning of all or part of a natural organ, artery, vein, or limb are excluded from the definition of medicines. Sutures and skin staples are included in this category, whether or not they are permanently implanted. A nonreturnable, nonreusable needle fused or prethreaded to a suture is regarded as part of the suture. Suture strips are considered a bandage and are excluded from the definition of medicines, and are therefore taxable.

Artificial limbs and eyes

Tax does not apply to the sale or use of artificial limbs and eyes or their replacement parts, including stump socks and stockings worn with artificial legs and intraocular lenses for human beings, when sold or furnished under the conditions listed above.

Orthotic devices

Tax does not apply to the sale or use of orthotic devices and their replacement parts designed to be worn on the person as a brace, support, or correction for the body structure (excluding orthodontic devices) when sold or furnished under the conditions listed above.

Orthotic devices include:

Orthotic devices and their replacement parts do not need to be furnished by a registered pharmacist to be considered as dispensed on prescription, provided they are furnished pursuant to the written order of a physician or podiatrist. For example, orthotic devices furnished according to a written order of a physician or podiatrist by—but not limited to—medical device retailers, clinics, physical therapists, intermediate care facilities, or other such individuals or institutions are deemed to be dispensed on prescription.

Please note: Orthotic shoes and support devices for the foot are not exempt unless they are:

• Custom-made biomechanical foot orthosis, or
• An integral part of a leg brace or artificial leg.

The term "custom-made biomechanical foot orthosis" means a device that is made on a positive model of the individual patient's foot. The model may be individually constructed from suitable model material such as plaster of Paris, stone, or wax, and may be manually constructed or fabricated using electronic technology.

In more general terms, a custom-made biomechanical foot orthosis means a foot orthosis which moves the osseous bones in the foot to a position in which the correct or ideal positioning of the patient's ankle joint in relation to the leg is obtained. A podiatrist must generally perform numerous tests to determine this position for each patient.

Once the desired position is determined, the podiatrist makes a mold of the foot and sends a prescription to an orthotic lab. Following the physician's instructions, the lab adjusts the mold by adding or removing materials, and then makes an orthotic from the corrected mold. An arch support does not qualify as a custom-made biomechanical foot orthosis.

Continuous passive motion (CPM) machines. Electrically powered apparatuses are often worn on the ankle, knee, hip, or finger to stimulate tissue healing. Since they are designed to assist the functioning of a natural body part, they are considered exempt orthotic devices when fully worn on the body. Sales or leases of CPM machines to patients are not taxable when sold or furnished according to a written order of a physician or podiatrist. For more information, see the discussion of written orders under Prescription Defined.

Prosthetic devices

Tax does not apply to the sale or use of prosthetic devices and their replacement parts when designed to be worn on or in the patient to replace or assist the functioning of a natural part of the human body, when sold or furnished under the conditions listed above. Excluded from the definition of "medicines" are air compression pumps and pneumatic garments; noninvasive temporary pacemakers; vacuum/constriction devices used to treat male impotency; auditory, ophthalmic, and ocular devices; and dental prosthetic devices and materials, such as dentures, bridges, crowns, caps, inlays, and artificial teeth.

Examples of prosthetic devices that qualify as medicines when worn on or in the patient include:

Prosthetic devices also include:

• Bags and tubing, as well as filters, locks, tape, clamps, and connectors which are integral to the tubing used to dispense enteral feeding to the patient, including gastrostomy tubes, jejunostomy tubes, and nasogastric tubes.
• Needles, syringes, cannulas, bags, and tubing, as well as filters, locks, tape, clamps, and connectors which are integral to the tubing, each of which is used to dispense TPN or IDPN to the patient.

Prosthetic devices and their replacement parts do not need to be furnished by a registered pharmacist to be considered as dispensed on prescription, so long as they are furnished pursuant to the written order of a physician or podiatrist.

Please note: Volumetric infusion pumps are not included unless the pump is used with a kidney dialysis machine.

Drug infusion devices

Tax does not apply to the sale or use of programmable drug infusion devices to be worn on or implanted in the human body which automatically cause the infusion of measured quantities of a medicine into the body, when sold or furnished under the conditions listed above.

Biologics

Botox®, Botox® Cosmetics, and similar biologics approved by the U.S. Food and Drug Administration (FDA) to diagnose, cure, mitigate, treat, or prevent any disease, illness, or medical condition are medicines regardless of how the products are used.

Breast implants

Breast implants are approved by the FDA for both reconstructive and cosmetic surgeries. Breast implants are considered medicines regardless of the type of surgery performed (reconstructive or cosmetic).

Collagen/dermal implants

Collagen and similar products are classified by the FDA as medical devices and generally require FDA approval. Restylane can be used to either correct scarring or correct the appearance of lines and wrinkles from aging. Restylane is considered a medicine regardless of its ultimate use.

Medical kits

Because medical kits often consist of both medicines and administration equipment, the exempt charges for the medicine should be segregated from the taxable charges. Regardless of the percentage value of the exempt portion of the sale, the charges for the medicines are exempt while the charges for the remainder of the kit are taxable.

Antiseptic cleansers/scrubs used by hospital personnel

Tax does not apply to items such as antiseptic surgical cleansers/scrubs applied by hospital personnel to their own bodies to benefit the patient and which constitutes a critical component of the patient's treatment.

Mammary prostheses

Mammary prostheses (including breast implants) are considered exempt from tax. Bras to hold a mammary prosthesis in place, filler pads, adhesive spray and remover, and lymphedema arm sleeves are exempt. Mammary prostheses need to be sold or furnished under the conditions listed above to qualify for the exemption but do not need to be furnished by a pharmacist to be considered dispensed on prescription—so long as they are furnished pursuant to a written order of a person authorized to prescribe.

Ostomy appliances and supplies

Tax does not apply to sales of ostomy appliances and related supplies that are required as the result of any surgical procedure by which an artificial opening is created in the human body for the elimination of natural waste. In order for these items to be considered medicines, they must be used in postoperative situations or sold as an accommodation to patients. If they are used as an adjunct to surgical procedures, purchases or sales of these items would be subject to tax, unless the appliances remain in the patient for postoperative purposes.

The term "natural waste" is not limited to that type of waste eliminated from the body by its natural function. It is also meant to cover situations where trauma fluid or exudate is removed from the human body.

Examples of ostomy appliances and supplies include:

Ostomy appliances and related supplies need to be sold or furnished under the conditions listed above to qualify for the exemption, but do not need to be furnished by a pharmacist to be considered dispensed on prescription, so long as they are furnished pursuant to a written order of a person authorized to prescribe.

Kidney dialysis machines

"Ostomy appliances" and "related supplies" include kidney dialysis machines, replacement parts for the kidney dialysis machines, and the catheters, dialysis fluid additives, volumetric infusion pumps, tubing, blood sets, fistula sets, and shunts used in connection with such machines. To qualify as a related supply, an item must be a necessary and integral part of the machine itself, or a substance or preparation intended for external or internal application to the patient undergoing dialysis.

Insulin syringes

Tax does not apply to sales of insulin syringes furnished by a registered pharmacist to a person for treatment of diabetes, as directed by a physician.

Tax does not apply to the sale of glucose test strips and skin puncture lancets furnished by a pharmacist, as directed by a physician, that are used by a diabetic patient to determine their own blood sugar level for the patient's use in treating diabetes. The furnishing of these items by a person other than a pharmacist is taxable, even when the glucose test strips and lancets are furnished by a health facility or administered by hospital staff.

Balloon catheters and other catheters

Balloon catheters

Sales of intra-aortic balloon pump catheters and coronary angioplasty balloon catheters are not subject to tax. However, sales of related supplies are subject to tax. The term "related supplies" includes, but is not limited to, coronary guiding catheters, coronary guide wires, guide wire introducers, sheath introducer systems, torquing devices, hemostatic valves, inflation devices, and syringes.

Other catheters

Sales of catheters are generally taxable, with three major exceptions:

1. Catheters that are permanently implanted are nontaxable when they assist the functioning of a natural organ, artery, vein, or limb and remain or dissolve in the body.
2. Catheters that are used for drainage purposes through artificial openings are nontaxable as ostomy materials and supplies.
3. Catheters or other types of drainage devices used for drainage through natural openings are nontaxable as prosthetic 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.

Catheters may also be exempt if they are an integral and necessary part of another exempt item.

Wheelchairs, crutches, canes, quad canes, and walkers

Tax does not apply to sales, including leases that are "sales," of wheelchairs, crutches, canes, quad canes, white canes used by the legally blind, and walkers and replacement parts for these devices when sold to a patient as directed by a licensed physician.

Electric three-wheel scooters that are similar in both design and function to a conventional electric wheelchair also qualify for exemption when sold or leased to an individual for the personal use of that individual as directed by a physician or surgeon.

For information on sales made to health maintenance organizations (HMOs), see HMOs and Charges for the Use of Durable Medical Equipment.

Medical oxygen delivery systems

Tax does not apply to the sale or use of medical oxygen delivery systems when sold or leased to an individual for the personal use of that individual under the direction of a licensed physician.

In general, tax applies to sales of medical oxygen delivery systems to hospitals, immediate care facilities, or other health care providers for use on their premises in the same manner as other sales of tangible personal property.

The term "medical oxygen delivery systems" includes liquid oxygen containers, high pressure cylinders, regulators, oxygen concentrators, tubes, masks, cylinder carts for ambulating, cylinder stands, and related items necessary for the delivery of oxygen to the person. It also includes repair and replacement parts for use in such a system.

Continuous positive airway pressure (CPAP) equipment sold or leased to individuals for the treatment of a sleep disorder such as sleep apnea may also be nontaxable as a medical oxygen delivery system. CPAP equipment continuously supplies a small amount of pressure to the user's airway, as distinguished from similar devices that only assist the patient in breathing and do not deliver air or oxygen directly into the patient's lungs. Devices that only assist the patient's breathing process and, as such, do not deliver air or oxygen directly into the patient's lungs are subject to sales tax.

Items excluded from the definition of medicines

The term "medicines" does not include the items listed below (this list is not all-inclusive). Consequently, sales and purchases of these items are generally taxable.

• Orthodontic, auditory, ophthalmic, or ocular devices or appliances. See Artificial limbs and eyes for examples of specifically exempted items.
• Dentures, removable plates, fixed permanent bridges, permanently implanted artificial teeth (except dental implant systems, including dental bone screws and abutments—see Articles permanently implanted in the human body), crowns, caps, inlays, and other prosthetic materials and devices.
• Articles which 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, arch supports, cervical pillows, exercise weights (boots or belts), orthopedic shoes and supportive devices (unless they are a "custom-made biomechanical foot orthosis" or an integral part of a leg brace or artificial leg), plastazote inserts, plastazote shoes, plastic shoes (custom or ready-made), sacroease seats, shoe modifications, Spenco® inserts, traction units (unless they qualify because of how they are worn), or thermophore pads.
• Hospital beds, including specialized or therapeutic beds.
• Any alcoholic beverage of which the manufacture, sale, purchase, possession, or transportation is licensed and regulated by the Alcoholic Beverage Control Act (Division 9, commencing with section 23000, of the Business and Professions Code).
• Bathroom equipment, nebulizers, trapeze bars, patient hydraulic lifts, IV stands and restraints, and bone fracture therapy devices.
• Specially designed hand utensils, grooming and dental aids, eating and drinking aids, shampoo aids, and household aids.
• Glucose meters and non-insulin syringes.
• Condoms and diaphragms.

Revision June 2026