Selling Dental Products and Taxation

Are you selling dental products in your practice?  Should you be charging sales tax for these products or for your services?  The long answer: maybe.  This is a rather unexciting topic, so let us clear it up for you quickly.  Many dental practices are selling items like toothbrushes & waterpiks.  If you are selling these items (often the most common sales tax problems involve them) then you must charge your patients sales tax.  Hopefully, you are making a profit on these items, for the hassle of selling them.  Sales tax is required and must be charged on the total sales price.  

Think of your practice as you would any other retail business.  When you sell an item in the office, sales tax should be charged and a sales tax return should be filed with your state.  Now, if the item permanently stays in the patient’s mouth, it is exempt.  If the product is being sold as a prescription, and the item is not available over-the-counter, it would qualify for exemption and sales tax would not need to be charged.  A prescribed mouthwash is a great example of this.  Your dentistry services are also not taxable for sales tax.  If you are a dentist in the state of Kansas, here is a great reference with regard to taxation/exemption for dental professionals.  

In short: If the item permanently stays with the patient, no sales tax. If the item is prescribed and not available over-the-counter, no sales tax.  Well, there you have it!  Pretty simple, right?  If you have additional questions or concerns, contact a Dental Business Advisor at Hinrichs+Pesavento, today.  You can reach us any number of ways, including 24/7 Live Chat, Facebook Messenger, email, or by phone at (913) 681-1350.  Let us know how we can help!