South Carolina DME sales tax audits are ramping up throughout SC. The Department of Revenue is opening sales tax audits for Durable Medical Equipment retailers requesting lots of records and information. The audit period is generally three years. If you have received a South Carolina SC DME sales tax audit notice you do have options.
South Carolina has several sales tax exemptions that apply to certain durable medical equipment or DME items. For example, South Carolina Code of Laws provides:
SECTION 12-36-2120. Exemptions from sales tax.Exempted from the taxes imposed by this chapter are the gross proceeds of sales, or sales price of:
(28)(a) medicine and prosthetic devices sold by prescription, prescription medicines used to prevent respiratory syncytial virus, prescription medicines and therapeutic radiopharmaceuticals used in the treatment of rheumatoid arthritis, cancer, lymphoma, leukemia, or related diseases, including prescription medicines used to relieve the effects of any such treatment, free samples of prescription medicine distributed by its manufacturer and any use of these free samples;
(b) hypodermic needles, insulin, alcohol swabs, blood sugar testing strips, monolet lancets, dextrometer supplies, blood glucose meters, and other similar diabetic supplies sold to diabetics under the authorization and direction of a physician;
(c) disposable medical supplies such as bags, tubing, needles, and syringes, which are dispensed by a licensed pharmacist in accordance with an individual prescription written for the use of a human being by a licensed health care provider, which are used for the intravenous administration of a prescription drug or medicine, and which come into direct contact with the prescription drug or medicine. This exemption applies only to supplies used in the treatment of a patient outside of a hospital, skilled nursing facility, or ambulatory surgical treatment center;
(d) medicine donated by its manufacturer to a public institution of higher education for research or for the treatment of indigent patients; and
(e) dental prosthetic devices;
(f) prescription drugs dispensed to Medicare Part A patients residing in a nursing home are not considered sales to the nursing home and are not subject to the sales tax....
(38) hearing aids, as defined by Section 40-25-20(5);
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(47) tangible personal property sold to charitable hospitals predominantly serving children exempt under Section 12-37-220, where care is provided without charge to the patient.
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(63) prescription and over-the-counter medicines and medical supplies, including diabetic supplies, diabetic diagnostic equipment, and diabetic testing equipment, sold to a health care clinic that provides medical and dental care without charge to all of its patients.
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(69) the sale or renewal of a warranty, maintenance, or similar service contract for tangible personal property if the sale or purchase of the tangible personal property covered by the contract is exempt or excluded from the tax imposed by this chapter.
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(74) durable medical equipment and related supplies:
(a) as defined under federal and state Medicaid and Medicare laws;
(b) which is paid directly by funds of this State or the United States under the Medicaid or Medicare programs, where state or federal law or regulation authorizing the payment prohibits the payment of the sale or use tax; and
(c) sold by a provider who holds a South Carolina retail sales license and whose principal place of business is located in this State.
If your durable medical equipment business has received a sales tax audit notice from the South Carolina Department of Revenue, please contact the Turner-Vaught Law Firm, LLC today. Our Tax Audit Attorneys have the experience and dedication to successfully resolve your durable medical equipment sales tax case.
Our fees can be tailored to fit the level of detail your case and budget requires. Call for your free consultation (877) 315-8370.
