Washington state has made a permanent update to the Washington Administrative Code (WAC) section 458-20-18801 regarding the sales tax requirements for qualifying medical supply vendors as required by Substitute Senate Bill 5431 (2025). The new amendment says retail sales tax does not need to be stated or collected separately when medical equipment, including durable medical equipment and mobility enhancing equipment, is paid for by health insurance providers as long as certain conditions are met. The conditions are that the payment amount is fixed and is set by contract between the equipment vendor and the insurance provider, and the vendor can’t collect the balance from the covered person or anyone else after the contractual amount is paid.
This update means medical equipment vendors may update their billing to include tax with the item cost, and they must include the tax amount in the original contract. Vendors and insurance providers need to ensure they are correctly calculating the sales tax based on the end delivery or user address and that the tax amount is included in the fixed price. Both will also need to ensure they are keeping updated copies of their contracts as well as records of the tax being collected and remitted since the tax does not need to be stated separately on the invoices. (Rule Making Order Related to WAC 458-20-18801, Dated January 20,2026, Washington Department of Revenue, effective February 20, 2026)