In most states that charge sales tax, orthotic and prosthetic devices are tax exempt when they are prescribed and used to replace, support, or correct a body part or function. Five states have no statewide sales tax at all, and the rest generally treat these devices as medical necessities rather than retail goods. On top of the sales tax break, federal law lets you pay for qualifying devices with pre-tax HSA or FSA dollars and deduct unreimbursed costs that push your medical expenses above 7.5% of adjusted gross income.
Which Devices Qualify
A prosthetic device replaces a missing body part or restores a lost function. The Streamlined Sales and Use Tax Agreement, which standardizes definitions across participating states, describes a prosthetic device as a replacement, corrective, or supportive item worn on or in the body that artificially replaces a missing portion, prevents or corrects a physical deformity or malfunction, or supports a weakened or deformed body part.1Streamlined Sales Tax Governing Board. Medical Equipment Issue Paper Most state statutes use language modeled on this definition.
Common qualifying items include artificial arms and legs (including activity-specific limbs like running prostheses), artificial eyes, hearing aids, and pacemakers. Dental prostheses such as dentures and bridges qualify in many jurisdictions, and the IRS specifically lists artificial teeth as deductible medical expenses.2Internal Revenue Service. Publication 502 – Medical and Dental Expenses
Orthotic devices support, align, or correct an existing body structure rather than replacing a missing one. Rigid back braces, prescribed knee braces for ligament injuries, and custom-molded shoe inserts for diagnosed conditions typically qualify. Most states require orthotic devices to be prescribed by a licensed practitioner or custom-designed for a specific patient. A mass-produced elastic knee sleeve grabbed off a pharmacy shelf usually does not meet that bar.
What Does Not Qualify
The dividing line is medical necessity versus general convenience or cosmetics. Over-the-counter athletic supports, basic bandages, and compression garments bought without a prescription are almost never exempt, because they are useful to anyone rather than tied to a specific illness or injury.
Cosmetic devices fall on the taxable side too. An implant or prosthesis purchased purely for appearance rather than to replace a missing part or restore function does not qualify, and a prescription alone will not change that if the underlying purpose is cosmetic.
Durable medical equipment sits in a separate tax category in many states. Hospital beds, wheelchairs, and oxygen concentrators may have their own exemptions under different code sections, but they are not prosthetic or orthotic devices because they are not worn on or in the body. If you are buying equipment that stays in your home, check whether your state has a distinct durable medical equipment exemption.
Repair Parts, Supplies, and Accessories
The Streamlined Sales Tax definition explicitly includes repair and replacement parts within the prosthetic device exemption.1Streamlined Sales Tax Governing Board. Medical Equipment Issue Paper Most states that exempt the device also exempt components designed specifically for it: replacement socket liners, prosthetic socks, connective hardware, and servicing labor. That matters because prosthetic limbs need regular maintenance over their lifespan.
Generic supplies are trickier. A specialized lithium battery built for a myoelectric arm is far more likely to qualify than a standard AA battery that happens to power an accessory. When in doubt, ask your prosthetist to document that the part is a necessary component of the prescribed device, and keep that record with your prescription.
Documentation You Need
A prescription from a licensed healthcare provider is the foundation of any exemption claim. It should identify the patient, the diagnosed condition, and the specific device. Some states also require a Certificate of Medical Necessity giving additional clinical justification. Not every state demands this, but having one on file strengthens your position if the exemption is later questioned.
Retailers usually require an exemption certificate too. States participating in the Streamlined Sales and Use Tax Agreement accept a standardized multi-state form that captures your name, address, identification number, the legal basis for the exemption, and the seller’s details.3Streamlined Sales Tax Governing Board. Certificate of Exemption This paperwork protects the seller during state audits. Filing a fraudulent certificate carries penalties in every state.
How It Works at Checkout
In practice, you present the prescription and completed exemption certificate to the prosthetist or medical supply company before checkout. The seller confirms the paperwork matches the items and zeroes out the sales tax line. Your receipt should show the subtotal and total as the same amount, often flagged “Tax Exempt” next to the item.
Keep copies of everything. Sellers must retain exemption certificates for several years to satisfy audit requirements, and you should hold onto your prescription, certificate, and receipt for the same reason.
Shipping charges generally follow the tax treatment of the underlying product. If the device is exempt, delivery fees on that device are typically exempt as well. If a single shipment contains both an exempt prosthetic and taxable general supplies, ask the seller to itemize the delivery charges so the exempt portion is clear.
Insurance and Medicare
If private insurance pays for the device, the sales tax exemption still applies to the full purchase price. The exemption is based on what the item is, not who pays for it, and you should not see tax on your copay or coinsurance.
Medicare works differently. Medicare’s fee schedules for prosthetic and orthotic devices already build sales tax into the base calculation, and Medicare contractors do not make a separate payment for sales tax or adjust fees when local rates change. You should not be charged additional sales tax on top of your Medicare copayment, and if a provider tries to add it, it is worth questioning.
Paying With an HSA or FSA
Prosthetic and orthotic devices are eligible medical expenses under both Health Savings Accounts and Flexible Spending Accounts. Federal law defines eligible medical expenses to include amounts paid for the diagnosis, cure, treatment, or prevention of disease, and for items affecting any structure or function of the body.4Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses Paying with pre-tax HSA or FSA dollars effectively adds a discount equal to your marginal tax rate on top of any sales tax exemption.
The Federal Income Tax Deduction
You may also be able to deduct the cost on your federal income tax return. Under 26 U.S.C. ยง 213, unreimbursed medical expenses are deductible to the extent they exceed 7.5% of adjusted gross income.5Internal Revenue Service. Topic No. 502, Medical and Dental Expenses The cost of prosthetic and orthotic devices, fitting and adjustment fees, repairs, and replacement parts all count toward the threshold.
The 7.5% floor means the deduction matters most when a medical expense is large relative to income. Someone with $60,000 in AGI needs more than $4,500 in total medical expenses before any deduction begins, and a major prosthetic purchase often clears that on its own. You must itemize on Schedule A to claim the deduction, so it only helps if your itemized deductions exceed the standard deduction.4Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses Keep receipts and explanation-of-benefits statements, because only the portion your insurer did not reimburse is deductible.
Getting a Refund If You Already Paid Sales Tax
If you paid sales tax on a qualifying device because you lacked the paperwork at purchase, or because neither you nor the seller realized the item was exempt, you can file a refund claim with your state revenue department. The process usually involves a refund application, the original receipt showing tax paid, the prescription, and the exemption certificate you would have used at the register.
Deadlines are set by each state and commonly run between one and four years from the purchase date or the date the tax was due. Miss the window and the refund is gone. Processing can take several months. For expensive devices, the math justifies the paperwork: at a combined 8% tax rate, a $20,000 above-knee prosthetic generates $1,600 in recoverable tax. Attach proof of what you actually paid, such as a credit card statement or canceled check, because a claim without payment documentation will be denied.
States With No Sales Tax
Five states impose no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.6Tax Foundation. State and Local Sales Tax Rates, 2026 If you live in one of these, the exemption is a non-issue for state purposes. Alaska allows local jurisdictions to levy their own sales taxes, so buyers in some Alaskan municipalities may still see a local tax and should ask whether that jurisdiction exempts medical devices.