A5846

An Act exempting medical alert devices and services from the sales and use tax, amending P.L.1980, c.105.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 13 of P.L.1980, c.105 (C.54:32B-8.1) is amended to read as follows:

13. a. Receipts from sales of the following sold for human use are exempt from the tax imposed under the "Sales and Use Tax Act":

(1) drugs sold pursuant to a doctor's prescription;

(2) over-the-counter drugs;

(3) diabetic supplies;

(4) prosthetic devices;

(5) tampons or like products;

(6) medical oxygen;

(7) human blood and its derivatives;

(8) durable medical equipment for home use;

(9) mobility enhancing equipment sold by prescription; [and]

(10) medical alert devices and medical alert services; and

(11) repair and replacement parts for any of the foregoing exempt devices and equipment.

b. As used in this section:

"Assistance operator" means a person who is authorized by a subscriber of a medical alert service to:

(1) receive a signal from or communicate with the subscriber when the subscriber uses a medical alert device; and

(2) contact one or more emergency responders, caregivers of the subscriber, family members of the subscriber, or any combination of these individuals, on the subscriber’s behalf when the subscriber uses a medical alert device.

"Drug" means a compound, substance, or preparation, and any component of a compound, substance, or preparation, other than food and food ingredients, dietary supplements, or alcoholic beverages:

(1) recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, or official National Formulary, and supplement to any of them; or

(2) intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; or

(3) intended to affect the structure or any function of the body.

"Over-the-counter-drug" means a drug that contains a label which identifies the product as a drug, required by 21 CFR 201.66. The label includes:

(1) a "Drug Facts" panel or

(2) a statement of the "active ingredient" or "active ingredients" with a list of those ingredients contained in the compound, substance or preparation. "Over-the-counter drug" does not include a grooming and hygiene product.

"Grooming and hygiene product" is soap or cleaning solution, shampoo, toothpaste, mouthwash, anti-perspirant, or sun tan lotion or screen, regardless of whether the item meets the definition of "over-the-counter drug."

"Prescription" means an order, formula, or recipe issued in any form of oral, written, electronic, or other means of transmission by a duly licensed practitioner authorized by the laws of this State.

"Prosthetic device" means a replacement, corrective, or supportive device including repair and replacement parts for same worn on or in the body in order to:

(1) artificially replace a missing portion of the body; or

(2) prevent or correct a physical disability; or

(3) support a weak or disabled portion of the body.

"Durable medical equipment" means equipment, including repair and replacement parts, but not including mobility enhancing equipment, that:

(1) can withstand repeated use;

(2) is primarily and customarily used to serve a medical purpose;

(3) is generally not useful to a person in the absence of illness or injury; and

(4) is not worn in or on the body.

"Medical alert device" means an electronic device that allows or causes a subscriber of a medical alert service to send a signal to or communicate with an assistance operator.

"Medical alert service" means a service that provides a subscriber of the service with a medical alert device and access to an assistance operator who is authorized by the subscriber to contact one or more emergency responders, caregivers of the subscriber, family members of the subscriber, or any combination of these individuals, on the subscriber’s behalf when the subscriber uses a medical alert device.

"Mobility enhancing equipment" means equipment, including repair and replacement parts, other than durable medical equipment, that:

(1) is primarily and customarily used to provide or increase the ability to move from one place to another and which is appropriate for use either at home or in a motor vehicle; and

(2) is not generally used by persons with typical mobility; and

(3) does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.

c. Receipts from sales of supplies purchased for use in providing medical services for compensation, but not transferred to the purchaser of the service in conjunction with the performance of the service, shall be considered taxable receipts from retail sales notwithstanding the exemption from the tax imposed under the "Sales and Use Tax Act" provided under this section.

(cf: P.L.2017, c.131, s.214)

2. This act shall take effect the first day of the second month next following enactment.

STATEMENT

This bill exempts medical alert devices and services from sales and use tax. As defined in the bill, "medical alert device" means an electronic device that allows or causes a subscriber, meaning a person with a subscription to a medical alert service, to send a signal to or communicate with an assistance operator. "Medical alert service" is defined as a service that provides a subscriber with a medical alert device and access to an assistance operator who is authorized by the subscriber to contact one or more medical alert responders on the subscriber’s behalf when the subscriber uses a medical alert device. Exempting medical alert devices and services from sales tax will help make these devices and services more affordable and accessible to the elderly and other vulnerable populations in New Jersey.