Illinois sales tax on medical devices audit

Here is the 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, and medicated hand lotion, excluding grooming and hygiene products; and
• prescription and nonprescription medical appliances that directly replace a malfunctioning part of the human body, such as corrective eyewear, contact lenses, prostheses, insulin syringes, and dentures.

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 thinking that the 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.  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)