Don't forget the sales tax! -- WSCA

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Date Posted: Fri, May 28 2004, 5:58:41
Author: John Angell
Subject: Don't forget the sales tax!

I have been working in this field since the late 1980�s. I have always known that we (chiropractors) need to charge sales tax for durable medical equipment (DME�s) such as cervical pillows, orthotics, low back supports, etc. When we were first opening our practice, the doctor we shared space with was audited by the State of Washington, Dept of Revenue. Because this doc did not charge sales tax or report it on his State B&O tax form, he was fined (heavily) and had to pay back taxes.

The subject of charging & report sales tax has been a hard one for DC�s to swallow. Here are some of the excuses I hear why DC�s don�t charge & report sales tax:
1. �We do not have a resale certificate�
2. �It�s too much work�
3. �I don�t believe you John�
4. �They (the State) really won�t come after us�

Once when I was doing a seminar in Spokane, and I was discussing the issue of sales tax, one of the doc�s at the seminar raised his hand to tell everyone that he once was audited by the state, and he now never fails to charge & report sales tax.

Later that week, I was speaking to a college and she told me about another office in Lynnwood that was audited. At a recent seminar I did in Bellevue, one of the attendees told me that their office is in the process of being audited. I asked them if they had been collecting & reporting sales tax, and they said �no�.

DON�T MESS WITH THE TAX MAN! IT�S NOT WOTH THE RISK!

Please remember to charge sales tax & report it! Also, copies of records you provide to attorneys & insurance companies are subject to sales tax!

There are only a few times when not charging sales tax is OK. This would include if your patient lives in another state, if the requesting party for records plans to resale them (i.e. Goodwin Attorney Services or MedRecs).

If you have questions about this, contact your tax professional!

John Angell
Kirkland Billing

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