Sales Tax Question

[PAkev]

Our state (PA) typically does not impose sales tax on eyewear since it is a medically valued product. Therefore we do not impose, collect, or report sales tax on RX eyewear or sunwear. However, interesting dialogue developed recently: If a patient only purchases a frame without RX lenses, is it technically still a medically valued product ?

We debated that since the frame portion isn't taxed in a comprehensive package than sales tax shouldn't be imposed. However it could also be argued that without an RX the frame doesn't carry any medical value.

Your thoughts?

[AdmiralKnight]

Do you charge tax on non-rx sunglasses? Same deal.

[Now I See]

I charge sales tax on sunglasses (unless the pt is getting a prescription pair), clips, cleaner, cloths, readers, etc. The only things I don't charge sales tax on are frames and lenses.

[PAkev]

Do you charge tax on non-rx sunglasses? Same deal.

Not quite.......

If patient has an RX slip from a Dr. indicating "UV Protection" it is technically an RX........ no sales tax and in addition may be elgible for collective frame and lens insurance benefits/reimbursement.

Therefore that same pair of sunglasses from a mall kiosk that cost $199 plus tax may only end up only costing $100 from an optical provider.

[AdmiralKnight]

Fair enough, in that situation. But the other 99% of the time, when someone wants to buy a non-rx sun, there's tax, yes? Frames with no Rx should be treated the same way. There's no Rx, there's no UV, nada. They're not a medical device at that point, so should be treated as such.

[varmint]

I,ve worked both in Pa and Az and both states have similar laws concerning eyewear taxes. I never charged sales tax on frames and or lenses as the frame is useless without lenses, therefore it can be considered a durable medical product. Even all the vision plans as well as medicare have coding & allow for frame only benefits. I would vote no on sales tax for frame only.
Non-rx sun's are not a comparable item for this consideration.

[obxeyeguy]

Not quite.......

If patient has an RX slip from a Dr. indicating "UV Protection" it is technically an RX........ no sales tax and in addition may be elgible for collective frame and lens insurance benefits/reimbursement.

Therefore that same pair of sunglasses from a mall kiosk that cost $199 plus tax may only end up only costing $100 from an optical provider.

I sure wouldn't touch that one, not as an Rx .

[AdmiralKnight]

I'm not quite following the logic... the way I look at is like this. Take safety frames. If you put non-safety lenses into a safety frame, they're not safety glasses, right? Well, if you don't put rx lenses into a frame, it shouldn't be exempted from taxes for that reason.

That being said, there are going to be situations where getting a frame only would be able to submit to insurance, for instance, if a patient was getting a new frame, putting existing lenses in, some insurance plans will cover that.

Now, obviously, I have no idea how the actual law works, but that's my take on it. :D

[Lachrymator]

I'm not quite following the logic... the way I look at is like this. Take safety frames. If you put non-safety lenses into a safety frame, they're not safety glasses, right? Well, if you don't put rx lenses into a frame, it shouldn't be exempted from taxes for that reason.

That being said, there are going to be situations where getting a frame only would be able to submit to insurance, for instance, if a patient was getting a new frame, putting existing lenses in, some insurance plans will cover that.

Now, obviously, I have no idea how the actual law works, but that's my take on it. :D

Look at it this way, if I prescribed you a certain eye drop, and I sold you the drops but squeezed all the fluid out until there was nothing left would it still be taxed b/c it has no medical value in an empty vial?

[AdmiralKnight]

It wouldn't be taxed, because there wouldn't be a charge period for it. :P

[cocoisland58]

In Michigan there is no tax on lenses only or lenses and frame together. There is on just a frame because a frame is not in and of itself an aid to vision unless lenses are inserted. Contact lenses have always been taxed for some reason.

[PAkev]

Fair enough, in that situation. But the other 99% of the time, when someone wants to buy a non-rx sun, there's tax, yes? Frames with no Rx should be treated the same way. There's no Rx, there's no UV, nada. They're not a medical device at that point, so should be treated as such.

Unless patients/customers get a free RX for UV protection with sunwear purchase over $159:idea:

[Lachrymator]

It wouldn't be taxed, because there wouldn't be a charge period for it. :P

No charge on the samples, you're right. I'm just saying...

[For-Life]

In Ontario, we face a similar situation with Clip Ons. If Clip Ons come with RX glasses, then no taxes. If they are sold separately, then they are taxed.

I think by that understanding, then yes the frame with no lenses would be taxed.

[CME4SPECS]

PAkev, you should visit the website of your tax board, I'm sure the answers are there.

Here's what the state of CA does. NOTE: rx lenses are with a CORRECTION!

(b) Dispensing Opticians. (l) In General. A registered dispensing optician is the consumer of ophthalmic materials including eyeglasses, frames, and lenses dispensed pursuant to a prescription prepared by a physician and surgeon or optometrist. Tax applies with respect to the sale of such materials to the dispensing optician. (2) Replacement Lenses and Frames. A dispensing optician is also the consumer of lenses and frames furnished as duplications or replacements of parts of eyeglasses or contact lenses which were previously prescribed by a physician and surgeon or optometrist. (3) Plano Lenses or Sunglasses (Without Correction). When plano lenses and frames or plano sunglasses, including clip-on sunglasses, are dispensed pursuant to a prescription prepared by a physician and surgeon or optometrist for a particular class of plano, the dispensing optician is the consumer of the lenses and frames or sunglasses, and tax applies to the sale thereof to him/her. In all other instances the dispensing optician is the retailer of such lenses and frames or sunglasses, and tax applies to the gross receipts from such a retail sale.