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Texas designated doctor exams ordered by the Texas Department of Insurance sales tax

By November 10, 2022March 27th, 2024Texas Sales Tax

Sales Tax Rules for Designated Doctor Exams Ordered by the Texas Department of Insurance

Texas Comptroller of Public Accounts ruled that charges for designated doctor exams ordered by the Texas Department of Insurance, Division of Workers’ Compensation (DWC), are taxable insurance services. The DWC orders exams to evaluate an injured employee’s medical condition and to resolve disputes about worker’s compensation insurance benefits regarding a work related injury or illness. The exams are not medical treatments and do not establish a physician-patient relationship. They are performed to determine the appropriate level of workers’ compensation benefits. These are activities to handle, investigate, adjust, and/or pay claims or losses, and the activities meet the definition of insurance claims adjustment or claims processing under Tex. Admin. Code § 3.355(a)(8). Charges for exams are subject to Texas sales and use tax. Designated doctors are responsible for collecting and remitting sales and use tax on charges to workers’ compensation insurance carriers for exams. The doctors may accept an exemption certificate in lieu of collecting tax on exams for exempt governmental entities described by Tex. Tax Code Ann. § 151.309, such as self-insured political subdivisions, or to religious, educational, and public service organizations described by Tex. Tax Code Ann. § 151.310.

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Ansari Law Firm

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