Punctuation in Missouri statute prevents sales-tax exemption for cancer-treating medical devices

Punctuation is preventing a sales-tax exemption for medical devices used by cancer patients in Missouri.

While a legislative process moves forward for the second year to clarify the statute regarding medical sales-tax exemptions, some state legislators hope the new director of Missouri’s Department of Revenue will correct the comma-caused situation.

A bill sponsored by state GOP Rep. Lisa Thomas provides a specific exemption from state and local sales taxes for all sales of class III medical devices that use electric fields to treat cancer.

She said during a legislative hearing last week that most other medical devices, prescription drugs and similar items are exempt from sales and use taxes, but the state Revenue department has issued opinions stating it "does not believe the  statute exempts the devices that we’re talking about."

At least one other state GOP lawmaker hopes Wayne Wallingford, a former state representative and senator recently appointed by Republican Gov. Mike Parson to lead Revenue department, can solve without legislation what he and others consider the statute's language problem.

"Have you talked to the new director about, maybe, re-evaluating this position?" asked state GOP Rep. Shane Roden. "Maybe the ship has turned around over there and there's some possibility that we could fix this without having to fix this."

This is the second year legislators are attempting to fix this Missouri law. Last year, it was an amendment to a Senate bill that Parson vetoed.

"Regrettably ... providing a sales tax exemption for certain cancer treatment devices, would have provided tax relief for Missourians fighting rate cancers," he said in explaining his action. "I am supportive of this tax deduction, which is consistent with other medical devices and provides appropriate state tax relief. It is my hope that the General Assembly will pass this provision again in the next legislative session." 

Thomas, a psychiatrist and the medical director of the Missouri Physicians Health Program, urged the committee to move the legislation forward.

"Today's bill is important to cancer patients who do not have the luxury of time to begin receiving benefit from this exemption," he said. "We believe the government does not need to collect sales and use taxes on these life extending devices."

Six years ago, Wallingford sponsored SB794, which clarified sales tax exemptions for "all sales, rentals, repairs, and parts of durable medical equipment."

Ray McCarty, president and chief executive officer of Associated Industries of Missouri, recently said: “This device has been certified as durable medical equipment. However, the way the language was added, if you read all to all the way to the end of the sentence, it refers to 1980.

"The Missouri Department of Revenue decided that they needed to read that as if there were no commas in the sentence and that meant the law we passed in 2016 exempting durable medical equipment only applied to durable medical equipment that existed in 1980.”