On the Nevada Ballot: Medical Equipment Sales Tax Exemption

One question Nevada voters can expect to see on the November 8, 2016, election ballot is the Nevada Medical Equipment Sales Tax Exemption Initiative, otherwise known as Question 4. Question 4 is a constitutional amendment that voters initiated. It proposes to change Article 10 of the Nevada Constitution, adding text in the form of “Section 7.” The amendment would change the taxation rules concerning certain pieces of equipment those who are infirm or dying might use in Nevada.

Details of the Medical Patient Tax Relief Act

The full text of the Medical Patient Tax Relief Act proposes the addition of a Section 7 onto Article 10 of the state’s constitution. The text of Section 7 would pass into law the tax exemption of certain medical equipment, oxygen delivery equipment, and mobility enhancing equipment for human use. Section 7 would prohibit taxation upon the sale, storage, use or consumption of this equipment when a licensed health care provider prescribes the equipment to a patient. Question 4 is similar to a measure Nevada’s legislature approved in Nevada in 1996, Question 13, which exempted casts, bandages, orthotics, and other supports from use and sales taxes.

Question 4 does not include exemptions to what the law will deem included equipment. Rather, it allows Nevada legislature to establish laws for such exemptions. As written, the Nevada Medical Equipment Sales Tax Exemption would apply to “durable medical equipment,” including oxygen delivery applications and equipment that enhances mobility. Examples of this type of equipment includes:

  • Concentrators and oxygen tanks
  • Feeding pumps
  • Ventilators
  • CPAP machines
  • Drug infusion devices
  • Infant apnea monitors
  • Nebulizers
  • Hospital bends
  • Wheelchairs and walkers
  • Canes and crutches
  • Bath and shower aids

If it passes as a state constitutional amendment, Question 4 would make these pieces of equipment and others tax exempt by law. Question 4 is an initiated constitutional amendment, meaning it must pass with a majority vote for two even-numbered election years to change the state’s constitution. In this case, it will have to pass the November 8, 2016, election as well as the 2018 election.

Support and Opposition for Question 4

The Alliance to Stop Taxes on the Sick and Dying is the main group supporting Question 4. This group, led by Doug Bennett and allies, has raised nearly $278,000 for the initiative. Supporting arguments for Question 4 state the amendment would help Nevada’s sick and dying by eliminating unnecessary sales taxes on medical equipment. A “yes” vote on Question 4 supports the removal of the tax burden on the sale, storage, use, or consumption of “tangible personal property” – in this case, the outlined medical equipment, if a licensed health care provider prescribes the equipment for human use.

The measure currently has no registered opposition, but Ann O’Connell wrote the official opposing argument voters can read in the Nevadan’s voter guide. She asserts that removing the tax on certain pieces of medical equipment would hurt Nevada’s schools, police and fire departments, libraries, and parks – services that rely on sales taxes to operate. O’Connell argues that Question 4 would decrease revenue from an “already strained” budget by an unknown amount, leading to the need for higher taxes in the future. A “no” vote opposes the amendment, retaining the current sales and use taxes.

Several other states already have tax exemptions similar to those proposed in Question 4. Arizona, California, Colorado, Texas, and Utah, for example, have laws that exempt the same three categories of medical equipment (durable, oxygen delivery, and mobility enhancing) from taxation. The Alliance to Stop Taxes on the Sick and Dying views the passage into law of Question 13 in 1996 as a sign that Question 4 will receive a positive response in this election.