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2602, 2020

Which States Tax Medical Devices?

By |February 26th, 2020|Categories: Medical Industry|

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, apparatus, implement, machine, contrivance, [...]

2602, 2020

Where and When are Medical Services Taxable?

By |February 26th, 2020|Categories: Medical Industry|

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 to tax them [...]

2602, 2020

Leases of Mobile Medical Imaging Equipment

By |February 26th, 2020|Categories: Medical Industry|

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 at a specific [...]

2602, 2020

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

By |February 26th, 2020|Categories: Medical Industry|

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 (OTC) medicine is any medicine, as defined above, that may be purchased [...]

2602, 2020

Amendment to California Regulation 1591

By |February 26th, 2020|Categories: Medical Industry|

The California State Board of Equalization recently amended Regulation 1591 with little to no fanfare. The revision went through the amendment process in relative obscurity, probably because it only added three words to the regulation. The potential impact of those three words, however, could be material for those in the medical products industry. The proposal for this revision came out of the Board’s Business Tax Committee which is headed by Ms. Diane Harkey. Ms. Harkey, who represents the Fourth Equalization District (Orange County), and her staff have been a great resource for taxpayers, and through this committee have brought about [...]