Rule on Sales Tax for Medical Resources
Qualifying Medical Appliances
- Prescription medicines and nonprescription items claimed to have medicinal value, such as:
- Aspirin
- Cough medicine
- Medicated hand lotion
- Excluding grooming and hygiene products
- Prescription and nonprescription medical appliances that directly replace a malfunctioning part of the human body, such as:
- Corrective eyewear
- Contact lenses
- Prostheses
- Insulin syringes
- Dentures
Audit Challenges
This is where the problem starts on an audit: The doctor’s office buys supplies from an out-of-state vendor and does not pay sales tax, thinking that the appliances purchased are all qualifying medical appliances.
This is not always true. For example:
- If a Cardiologist purchases a treadmill to help perform tests for their patients,
→ That is fully taxable.
Professional Support
Contact our firm to discuss your audit and your duties to report sales and/or use tax in Illinois.
By: Mansoor Ansari J.D., LL.M. (TAX)