­
James R. Dumler, CPA

About James R. Dumler, CPA

James graduated with honors with a Bachelor’s degree in Business Management with a concentration in accounting, and has completed the California Board of Equalization’s training program. James currently specializes in California and multi-state sales and use tax matters including, but not limited to the hospitality, medical, high-tech, eCommerce, and automobile industries. James is the founder and manager of McClellan Davis’ vehicle, vessel and aircraft exemption program. Email James

Which States Tax Medical Devices?

Continuing in the vein of addressing fairly broad topics early on with this blog, I will focus this particular posting on the taxability of medical devices.  I will address the topic by looking at each individual state to determine what constitutes a medical device by definition and whether items fitting that definition are taxable or non-taxable pursuant to the applicable law.

Clarifying details and/or exceptions will be noted below, but in general, all 45 taxing states (jurisdictions) follow the United States Federal Drug Administration’s (FDA) definition of a medical device:

A medical device is “an instrument, […]

Where and When are Medical Services Taxable?

I was recently asked by a fellow tax professional whether medical services in general were exempt from sales, use or equivalent taxes in jurisdictions that have an active taxing scheme in place.  I thought I would share my research on the matter just in case the topic presents itself to others in the future.

Medical services can be generally defined as services provided by a state board licensed professional in the medical industry, including dentistry, that improve the physical and/or mental well-being of a patient.  While most states exempt medical services, there are a few that choose […]

Leases of Mobile Medical Imaging Equipment

I’ve been assisting a taxpayer with multistate sales and use tax issues pertaining to their subleases of mobile medical imaging equipment.  Since similar problems can arise in connection with multistate leasing in general, some details of the case are worth noting.  

The taxpayer leases imaging equipment such as MRI and PET scanners from prime lessors and then subleases it to various hospitals throughout the nation.  The hospitals, in turn, use the equipment to enhance and/or supplement their ability to diagnose ailments and injuries. (Subleasing these units is generally cheaper than buying them outright.)  The units may remain […]

Which States Tax Prescription and Over-The-Counter Medicine?

The legal definition of a medicine varies slightly from state-to-state, but it generally includes any pill, powder or substance that is intended to treat, cure or mitigate human disease or ailments and has medicinal qualities.  For the purposes of this blog post, the definition does not include medical devices, prostheses, supplies (including bandages), personal hygiene products or medicinal marijuana, all of which will be addressed in subsequent postings.  Finally, a prescription medicine is one that is ordered by a licensed member of the medical profession, and an over-the-counter

Audit Methodology 101- What is a Credit Card Test of Sales?

The use of a credit card test has become an increasingly popular audit methodology employed by the California Department of Tax and Fee Administration’s (CDTFA) audit staff. It used to be primarily utilized to estimate sales for restaurant and bar establishments but we are finding that the use of this test is becoming more prevalent in other industries as well.

The increased use of this methodology is for good reason. When preformed correctly, the test can produce a very accurate computation of a business’ gross receipts. The key to performing the test correctly, as with others, is making certain that the […]

Hospitals & Medical Services: Proposed Changes to CA Reg 1503

Last month I participated in an Interested Parties Meeting (IPM) with the California Department of Tax and Fee Administration (CDTFA) to discuss proposed revisions to California Code of Regulations, title 18 (Regulation), section 1503- Hospitals and other Medical Service Facilities, Institutions and Homes for the Care of Persons.  I want to share my thoughts on the proposed revisions because they will have a material impact on hospitals and other medical facilities’ ability to claim refunds of tax related to their Medicare Part A sales.

Currently, Regulation 1503, subdivision (b)(2), contemplates a transaction where title to the tangible personal property (TPP) in […]

California Adopts New Vapor Tax Regulations

The California Department of Tax and Fee Administration (CDTFA) recently adopted emergency Regulations 4076, Wholesale Cost of Tobacco Products and 4077, Tobacco Product Manufacturer.  The regulations interpret and implement the changes made to the Cigarette and Tobacco Products Tax Law (CTPTL) under Proposition 56, California Healthcare, Research and Prevention Tobacco Tax Act of 2016.  The new law increases the excise tax on cigarettes by $2.00 per pack which results in an “equivalent” increase in tax for other tobacco products (OTP), e.g., cigars, chewing tobacco, snuff (and now Vapor Products).  The new rate set for OTP of 65.08% is significantly higher than the prior rate of […]

Sales & Use Tax Refund Opportunities: Durable Medical Equipment

logo-v2This month, James R. Dumler, a senior sales tax specialist at McClellan Davis and featured contributor at Sales Tax Support provides a multistate sales and use tax update related to the medical industry. Sales Tax Support publishes articles written by experts and thought leaders in the specialized field of sales and use tax with small and medium sized business owners in mind.

Visit salestaxsupport.com to read James’ informative article “Sales & Use Tax Refund Opportunities: Durable Medical Equipment

Are Tips Subject to Sales Tax in California?

Fotolia_38665300_S_Coffee with tipIf you’re a restaurant owner that’s been through a California sales tax audit, you probably asked the auditor the above question at some point during the process. The answer you probably received was, “It depends,” or, “Sometimes.” If you’re lucky, you didn’t get further clarification in the form of an audit bill for tax on your employees’ tips.

The underlying principle is deceptively simple: if the amounts of your tips are optional (left up to the customers), and all of the tips are actually distributed to your employees, the tips are […]

Medicinal Marijuana: Taxable or Exempt? – At SalesTaxSupport.com

logo-v2This month, James R. Dumler, a senior sales tax specialist at McClellan Davis and featured contributor at Sales Tax Support writes about sales tax on medical and recreational marijuana. Sales Tax Support publishes articles written by experts and thought leaders in the specialized field of sales and use tax with small and medium sized business owners in mind.

Visit salestaxsupport.com to read James’informative article “Medicinal Marijuana: Taxable or Exempt?”