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BTLG Table of Contents > Sales and Use Tax Annotations > L > 330.0000 Leases Of Tangible Personal Property—In General > Annotation 330.2305.180

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330.0000 Leases of Tangible Personal Property—In General—Regulation 1660

Annotation 330.2305.180

(a) In General

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330.2305.180 Lease of Medical Equipment. A corporation is engaged in selling and leasing medical equipment and related supplies. Under one type of arrangement, the corporation furnishes hospitals with a medical instrument at no cost. The hospital must in return agree to place a standing purchase order for one box of catheters per month per instrument for use with the instrument. The price charged for the catheters under this agreement is higher than the list price. The hospital has the option of applying 50% of the amount over the list price charged for the catheters toward the purchase price of the instrument. The hospital also must pay a penalty of $475 if the instruments are returned in less than six months.

Since the amount charged for catheters under this type of agreement exceeds the regular price, the difference is regarded as a charge for rental of the instrument. Since tax was paid with respect to the entire charge, no further tax is due. 9/4/85.