Tax Type
Retail Sales and Use Tax
Description
Durable medical equipment lacking exemption documentation.
Topic
Durable Medical Equipment Exemption
Records/Returns/Payments
Date Issued
05-29-2013
May 29, 2013
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear *****:
This will reply to your letter submitted on behalf of ***** (the "Taxpayer"), in which you seek correction of the retail sales and use tax assessment issued for the period May 2008 through April 2011. I apologize for the delay in responding to your appeal.
FACTS
The Taxpayer is located outside Virginia and sells dental equipment, supplies and implants. As a result of the Department's audit, an assessment was issued for untaxed sales not supported by valid certificates of exemption and sales of durable medical equipment lacking documentation to support the exemption in Va. Code § 58.1-609.10 10.
The Taxpayer asserts that the contested sales of durable medical equipment to dentists are for specific patients and are exempt under Va. Code § 58.1-609.10 10. The Taxpayer provides additional documentation in support of its claim and requests that the Department adjust the audit accordingly.
DETERMINATION
Virginia Code § 58.1-609.10 10 provides, in part, an exemption from the retail sales and use tax for "prosthetic devices, orthopedic appliances, catheters...[and] other durable medical equipment and devices, and related parts and supplies specifically designed for those products ...when such items or parts are purchased by or on behalf of an individual for use by such individual."
Title 23 of the Virginia Administrative Code 10-210-500 discusses the sales and use tax application to dentists, dental laboratories and dental supply houses. The regulation addresses purchases on behalf of an individual and provides that:
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- The tax applies to sales to a dentist by a dental laboratory or supplier of dentures, plates, braces and similar prosthetic devices, or the component parts thereof, unless such dentures, braces, etc. are purchased on behalf of a specific patient. If such items are purchased in bulk and then dispensed to a particular patient, the original purchase will be subject to the tax even if the items withdrawn from the bulk inventory are modified for a specific patient.
Based on a review of the documentation submitted to the Department, the audit will be adjusted to remove those items in which the Taxpayer provides documentation that the medical equipment was purchased on behalf of a specific individual.
CONCLUSION
The audit will be adjusted based on this determination. After the audit is revised and the assessment is adjusted by the Department's audit staff, an updated bill with accrued interest will be issued to the Taxpayer. The outstanding balance must be paid within 30 days from the date of the bill to avoid the accrual of additional interest. Please remit payment to: Virginia Department of Taxation, Attention: *****, 600 E. Main Street,
23rd Floor, Richmond, Virginia, 23219. If you have any questions concerning payment of the assessment, you may contact ***** at *****.
The Code of Virginia section and regulation cited are available on-line at www.tax.virginia.gov in the Laws, Rules and Decisions section of the Department's web site. If you have any questions about this determination, you may contact ***** in the
Office of Tax Policy, Appeals and Rulings at *****.
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- Sincerely,
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Craig M. Burns
Tax Commissioner
AR/1-5160439318.T
Rulings of the Tax Commissioner