Tax Type
Retail Sales and Use Tax
Description
Medical, dental, and optical supplies and drugs; Bulk orders of items.
Topic
Taxability of Persons and Transactions
Date Issued
05-26-1998
May 26, 1998
Dear**********:
This is in reply to your letter to ***** in which you seek correction of sales and use tax assessed to ***** (the "Taxpayer'), for the period September 1991 through August 1997. I apologize for the delay in responding to your appeal.
FACTS
The Taxpayer is a licensed ophthalmologist and was assessed tax on purchases used in its practice. The auditor extended the audit period beyond three years because the Taxpayer failed to file use tax returns. The Taxpayer takes exception to the tax based on the department's failure to provide notification of the use tax requirements.
DETERMINATION
Title 23 of the Virginia Administrative Code (VAC) 10-210-2060(B) provides that physicians, surgeons and other "practitioners of the healing arts' are the consumers of all tangible personal property used in performing their professional services and must pay the tax to their suppliers at the time of purchase. If the supplier fails to collect the tax, the practitioner must pay the tax on a consumer use tax return, Form ST-7.
The auditor assessed the use tax on administrative supplies, medical supplies, and miscellaneous items used in the Taxpayer's practice. In addition, the tax was assessed on a maintenance contract for laser equipment that included the provision of parts. The assessed items were purchased for use in the Taxpayer's practice and, therefore, are subject to the use tax.
In regard to the notification from the department, Code of Virginia Sec. 58.1-204, copy enclosed, states that the department is required to publish regulations and written rulings or other interpretations of Virginia law which are of interest to taxpayers and practitioners. The department employs various methods to disseminate information concerning the taxes it administers.
The department published the regulation concerning the application of the sales and use tax to physicians' practices in 1966. The regulation has been issued in subsequent publications of the Retail Sales and Use Tax Regulations in 1969, 1979, 1985, and 1997, copies enclosed. The regulations were widely distributed and made freely available to the public.
While you indicate that you were unaware and uninformed about the use tax and its application to physicians' practices, the foregoing demonstrates that the department has disseminated such information which was readily available to the general public. The law is clear on this issue and the department has no choice but to uphold the assessment.
If you have any questions regarding this letter, please contact ***** of the department's Office of Tax Policy at *****.
Dear**********:
This is in reply to your letter to ***** in which you seek correction of sales and use tax assessed to ***** (the "Taxpayer'), for the period September 1991 through August 1997. I apologize for the delay in responding to your appeal.
FACTS
The Taxpayer is a licensed ophthalmologist and was assessed tax on purchases used in its practice. The auditor extended the audit period beyond three years because the Taxpayer failed to file use tax returns. The Taxpayer takes exception to the tax based on the department's failure to provide notification of the use tax requirements.
DETERMINATION
Title 23 of the Virginia Administrative Code (VAC) 10-210-2060(B) provides that physicians, surgeons and other "practitioners of the healing arts' are the consumers of all tangible personal property used in performing their professional services and must pay the tax to their suppliers at the time of purchase. If the supplier fails to collect the tax, the practitioner must pay the tax on a consumer use tax return, Form ST-7.
The auditor assessed the use tax on administrative supplies, medical supplies, and miscellaneous items used in the Taxpayer's practice. In addition, the tax was assessed on a maintenance contract for laser equipment that included the provision of parts. The assessed items were purchased for use in the Taxpayer's practice and, therefore, are subject to the use tax.
In regard to the notification from the department, Code of Virginia Sec. 58.1-204, copy enclosed, states that the department is required to publish regulations and written rulings or other interpretations of Virginia law which are of interest to taxpayers and practitioners. The department employs various methods to disseminate information concerning the taxes it administers.
The department published the regulation concerning the application of the sales and use tax to physicians' practices in 1966. The regulation has been issued in subsequent publications of the Retail Sales and Use Tax Regulations in 1969, 1979, 1985, and 1997, copies enclosed. The regulations were widely distributed and made freely available to the public.
While you indicate that you were unaware and uninformed about the use tax and its application to physicians' practices, the foregoing demonstrates that the department has disseminated such information which was readily available to the general public. The law is clear on this issue and the department has no choice but to uphold the assessment.
If you have any questions regarding this letter, please contact ***** of the department's Office of Tax Policy at *****.
Rulings of the Tax Commissioner