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State and Local Taxation of Healthcare Providers: Common Sales/Use and Income Tax Considerations, and other Current SALT Trends

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Wednesday, April 5, 2023

Recorded event now available

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This webinar will describe the many sales tax issues affecting healthcare providers. Our panel of state and local tax experts will discuss the sales taxation of medical devices, healthcare services, and supplies, as well as reveal exemptions offered for R&D, manufacturers, nonprofits, and others that help mitigate these taxes. Our panel will also dive into other SALT trends in the healthcare industry--including pass-through entity taxes (PTEs), telehealth, telecommuting, as well as explore states' taxation of medical marijuana.

Description

Healthcare is a broad term that includes medical services, medication, supplies, and equipment. These categories can be further subdivided, for example, into medical and telehealth services and prosthetic and durable medical equipment, etc. Sales tax treatment of healthcare items varies significantly based on how each purchase is classified, as well as who or what type of entity is making the purchase. Additionally, there are subtle and stark differences in each state's sales tax treatment of these purchases.

Many states exempt purchases of medical devices from sales tax. In New York, for example, "Sales of medical equipment, component parts, and medical supplies are exempt from New York State and local sales and use taxes unless sold for use in providing medical or similar services for compensation." Consequently, sales to physicians, hospitals, and other medical service providers are subject to sales tax.

In addition, many states offer exemptions for certain equipment purchases. For example, many states offer exemptions for R&D equipment purchased for use to develop or improve a product. Tax advisers working with healthcare businesses and providers need to be aware of the state tax exemptions offered in most states.

Also, as demand for telehealth has increased the past few years, along with telecommuting continuing to evolve and expand, it is important as ever for businesses to revisit historical approaches to state taxes. Telehealth and telecommuting can impact nexus, apportioning and sourcing of income for business tax purposes, gross receipts taxes, payroll taxes, and other tax type considerations.

Listen as our panel of state tax professionals defines the numerous opportunities states offer medical businesses to reduce or eliminate state and local taxes.

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Outline

  1. State tax landscape
  2. Sales Tax Considerations
    1. Sales
      1. Healthcare services
        1. Medical
        2. Telehealth
      2. Medication and supplies
      3. Medical devices
        1. Prosthetic
        2. Durable medical equipment
        3. Mobility enhancing
      4. Sales by nonprofit organizations
      5. Exemptions
        1. For profit
        2. Nonprofit
        3. Medical facilities
        4. Research and development
        5. Manufacturing
      6. Audits
      7. Medical marijuana
  3. Income Tax Update
    1. Pass through entity tax update
    2. Telehealth
    3. Telecommuting
  4. Questions

Benefits

The panel will cover these and other critical issues:

  • Which tangible medical purchases are typically exempt from sales tax
  • How medical providers qualify for the R&D equipment in certain states
  • Current sales tax trends in the healthcare industry
  • Income tax issues affecting the healthcare industry

Faculty

Bartek, James
James A. Bartek, CPA
Partner, State and Local Tax Services
Withum Smith+Brown

Mr. Bartek leads the Firm’s State and Local Tax Services and has over 25 years of professional experience in...  |  Read More

Easterday, Courtney
Courtney Easterday, MSA
State and Local Tax Manager
Withum Smith+Brown

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 |  Read More
Rosenberg, Jason
Jason Rosenberg, CPA, CGMA, EA, MST
Principal
Withum Smith+Brown

Mr. Rosenberg is a Principal and Leader of Withum’s State (SALT) Income and Franchise Tax Service Line. With over...  |  Read More

Susmano, Bonnie
Bonnie Susmano, JD, MBA
State and Local Tax Manager
Withum Smith+Brown

Ms. Susmano provides client service to multi-state companies, including advisory, compliance review, planning,...  |  Read More

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