Michigan Appeals Court Upholds Denial of Sales Tax Exemptions for Medical Supplies

The Michigan Court of Appeals affirmed the Court of Claims’ order granting partial summary disposition in favor of the Department of Treasury, holding that certain medical supplies sold by a medical device retailer did not qualify for Michigan’s sales tax exemption for prosthetic devices. The taxpayer challenged assessments for tax years 2017 through 2020 on items including prescription bandages, incontinence products, gauze, tape, and related medical supplies sold to disabled patients. The court held that tax exemptions must be strictly construed in favor of taxation and that the governing statutory language controls over any conflicting administrative rules. Applying this principle, ...