Oklahoma Administrative Code
Title 710 - Oklahoma Tax Commission
Chapter 65 - Sales and Use Tax
Subchapter 19 - Specific Applications and Examples
Part 15 - "H"
Section 710:65-19-142 - Hospitals, nursing homes, similar institutions and practitioners

Universal Citation: OK Admin Code 710:65-19-142

Current through Vol. 42, No. 1, September 16, 2024

(a) General provisions. Hospitals, nursing homes, similar institutions and practitioners primarily engaged in the business of rendering services, are generally considered to be the consumers or users of tangible personal property and services used in the operation of the institutions.Thus, with the exception of drugs, not to include over-the-counter drugs, and prosthetic devices, the gross proceeds derived from sales of tangible personal property and certain services to such institutions and practitioners are subject to tax. In-state vendors collect and remit sales tax on sales of such property to the institutions and practitioners, and use tax is due on out-of-state purchases. Healthcare institutions are not required to collect, report, and remit sales tax on gross receipts from meals, bandages, dressings, drugs, x-ray photographs or other tangible personal property when such items of tangible personal property are used in the rendering of their service, regardless of whether the items are billed separately.

(b) Vendors selling to healthcare institutions. Sellers of tangible personal property to institutions and practitioners are required to collect tax on sales of such property unless the hospital, nursing home, or similar institution is owned or operated by the federal government, the State of Oklahoma, a city, county, public trust, or a federally-recognized Indian Tribe, in which case the exemption described at OAC 710:65-13-130 will apply.

(c) Exceptions to the requirement to pay sales tax on purchases. Hospitals, nursing homes, similar institutions and practitioners engaged in the administration of drugs to their patients may purchase drugs, except for over-the-counter drugs, and prosthetic devices for use by individuals, exempt from sales taxas outlined in subsections (a) and (c) of 710:65-13-170.

(d) Sales tax refund claims.

(1) Purchases made prior to July 1, 2022. For purchases made prior to July 1, 2022, a refund may be claimed by hospitals, nursing homes, similar institutions and practitioners that dispense or provide medical appliances, medical devices or medical equipment to Medicare or Medicaid patients for the sales taxes previously paid by the institution or practitioner on such items. The documentation set out in (A) through (C) of this paragraph must be obtained as part of the claimant's records to substantiate the exemption claimed:
(A) Name and address of the purchaser or lessee or person on whose behalf the item is being purchased or leased;

(B) A copy of the prescription or work order; and

(C) A copy of the document which shows that the person on whose behalf the item is being purchased or leased is a Medicare or Medicaid patient.

(2) Purchases made on or after July 1, 2022. For purchases made on or after July 1, 2022, refund claims for items exempted pursuant to the provisions of 710:65-13-173 will not be allowed unless the purchaser's direct payment permit issued pursuant to 710:65-9-10 was presented to the vendor at the time of sale and the tax was accrued by the direct pay permit holder. To substantiate the refund claim the documentation outlined in subsection (e) of this Section will be required.

(e) Direct pay permits. Health care providers such as hospitals, nursing homes, similar institutions and practitioners may qualify for a direct payment permit, valid for three (3) years, pursuant to the provisions of Section 710:65-9-10. To substantiate the sales tax exemption for certain medical appliances, medical devices and other medical equipment pursuant to 68 O.S. § 1357.6(A), ahealthcare provider holding a direct pay permit must maintain, separate from confidential patient records the following information:

(1) Patient case number or account number;

(2) Type of insurance; and

(3) Item description or product number.

(f) Provision of meals. When hospitals furnish meals to nurses, attendants and patients as a part of the service rendered, the hospitals are deemed to be the users or consumers of the food and beverages used in the preparation of these meals and the sellers of these items to the hospital are required to collect tax on the sales of such property.

(g) Cafeterias open to public. When privately owned hospitals operate cafeterias that serve meals to the public, they will be allowed to purchase all foodstuffs used to operate the cafeteria exempt from tax for resale with a valid sales tax permit. The hospitals will then be required to collect the sales tax on sales to their customers and report and remit same to the Commission each month. The hospitals will also be required to pay sales tax on the cost of all foodstuffs withdrawn from stock, which are used to feed patients.

(h) State, city and county hospitals. State, city or county hospitals who operate cafeterias that serve meals to the public, or who charge their employees, are also required to collect the sales tax on sales to their customers and report and remit same to the Commission each month.

Amended at 9 Ok Reg 3033, eff 7-13-92; Amended at 15 Ok Reg 2827, eff 6-25-98; Amended at 23 Ok Reg 2847, eff 6-25-06

Disclaimer: These regulations may not be the most recent version. Oklahoma may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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