Current through Register Vol. XLI, No. 38, September 20, 2024
62.1. Dentists, optometrists and similar
professionals, when rendering professional services are engaged in business
which is excepted from the imposition of consumers sales and service tax and
use tax.
62.2. Purchases for use in
the business of rendering a professional service are subject to the consumers
sales and service tax and use tax.
62.3. Dentists, optometrists and similar
professionals who engage in a manufacturing activity, such as dentists who
operate their own dental lab and make their own dentures, crowns, bridges,
etc., or optometrists who operate their own optical shop and grind their own
lenses, generally are not considered to be engaging in a professional activity.
Such persons will be subject to the following rules when engaging in
manufacturing activities.
62.3.1. A dentist
who operates his own dental lab is exempt from paying tax when he purchases
materials to be directly used in manufacturing dentures, crowns, bridges, etc.
Those products which are manufactured for another dentist will be subject to
the consumers sales and service tax because the other dentist must pay that tax
on all materials and services used or consumed in rendering a professional
service. The fair market value of the manufactured products which the dentist
utilizes in rendering professional services to his own patients will be subject
to the imposition of the use tax.
62.3.2. An optometrist who operates his own
optical shop is exempt from paying tax when he purchases materials to be
directly used in manufacturing eyeglasses. Those products which are
manufactured for another optometrist will be subject to the consumers sales and
service tax because the other optometrist must pay that tax on all materials
and services used or consumed in rendering a professional service. The fair
market value of the manufactured products which the optometrist utilizes in
rendering professional services to his own patients will be subject to the
imposition of the sales and service tax and use tax.
62.3.3. If an outside patient comes to the
optometrist's optical shop with a prescription from another optometrist, then
the eyeglasses, including frames, are not subject to the sales and service and
use tax upon sale because they are dispensed pursuant to a prescription. In
this case, the owner of the optical shop, even though he is an optometrist,
need not remit use tax on the fair market value of the eyeglasses because he is
not using these glasses in the rendition of his professional service.
62.3.4. Persons engaged in a manufacturing
activity must either pay the tax and request a refund or credit or use a direct
pay permit to obtain exemption on goods and services directly used in their
manufacturing activity. Other items which are not integral or essential to the
manufacturing activity, but which are instead considered to be incidental,
convenient or remote to the manufacturing activity, are taxable. Guidelines for
determining what is considered to be "directly used" are given in Sections 2
and 123 of these regulations.
62.3.5. If a direct pay permit is presented
to the vendor, no tax is charged on the sale of tangible personal property or
service rendered to the purchaser. The person using the direct pay permit must
keep a record of the purchases made using the direct pay permit and whether the
items purchased were used in an exempt or taxable manner.
62.3.6. Pursuant to Section 9c.7 of these
regulations, a direct pay permit, consumers sales and service tax return and a
direct pay use tax return must be filed on a monthly basis by the direct pay
permit holder, together with the tax due on taxable purchases made using the
direct pay permit.
