Washington Amends Rule Regarding the Application of Sales Tax and Business and Occupation Tax for Optometrists

Washington amended the rule to no longer include repair and replacement parts in the definition of “prescription lenses”. Thus, customers will no longer receive a sales tax exemption on these purchases. To claim a retail sales tax exemption under RCW 82.08.0281 or 82.08.0283, person’s providing or selling any combination of professional services, prescription lenses, prescription eyeglass frames, or other optical merchandise must segregate and separately account for the income derived from each source. This part was amended to add prescription eyeglass frames. Also effective October 1, 2007, a deduction from the service and other activities classification of the B&O tax for amounts received by physicians or clinics for the infusion or injection of drugs will be allowed. This deduction will only apply to amounts that are separately stated, do not exceed the current federal rate, and are covered or required under a health care service program subsidized by the federal or state government. If the total amount received by the physician, including copayments received directly from the patient, exceeds the federal reimbursement rate, none of the amount received will qualify for a deduction. (WAC 458-20-150, Washington Department of Revenue, amended effective August 30, 2008, except as noted)

Posted on September 5, 2008