Wis. Admin. Code § Tax 11.17 — Hospitals, clinics and medical professions

Tax 11.17(1) (1) General.

Tax 11.17(1)(a) (a) Although professional personnel in hospitals and clinics and other members of medical professions including physicians, surgeons, oculists, optometrists, and podiatrists regularly transfer antibiotics, bandages, splints, and other tangible personal property and items, property, and goods under s. 77.52 (1) (b) , (c) , and (d) , Stats., to their patients in the performance of professional services, the transfer of that property, item, or good is an incident of a service rather than a retail sale of the property, item, or good. The persons are, therefore, deemed the consumers of the property, items, or goods in the same way they are the consumers of other materials and supplies used by them in the performance of their services. Accordingly, the suppliers of hospitals, clinics, and members of medical professions are retailers obligated to register and report tax on sales of tangible personal property, items, property, and goods under s. 77.52 (1) (b) , (c) , or (d) , Stats., and taxable services, unless the transaction is specifically exempt from the tax.

Tax 11.17(1)(b) (b) Section 77.54 (14) (b) , Stats., specifically provides an exemption for drugs furnished by a licensed physician, surgeon, or podiatrist to that person’s patient for medical treatment. Section 77.54 (22b) , Stats., provides an exemption for durable medical equipment for home use, mobility-enhancing equipment, and prosthetic devices, and repair and replacement parts and accessories for such equipment or devices, if such equipment or devices are used by a human being. The scope of these exemptions is set forth in ss. Tax 11.08 , 11.09 , and 11.45 .

Tax 11.17(2) (2) Purchases by hospitals. Purchases by hospitals, except hospital service insurance corporations under s. 613.80 (2) , Stats., are exempt from the sales and use tax if the hospitals are nonprofit and, as such, qualify as charitable organizations under s. 77.54 (9a) , Stats. Each is issued a Certificate of Exempt Status, “CES,” by the department. When purchasing property, items, goods, and services, a hospital shall furnish its CES number to its supplier, and the supplier may then make sales of every type of tangible personal property and items, property, and goods under s. 77.52 (1) (b) , (c) , and (d) , Stats., and services to the hospital without tax. Hospitals organized for profit do not qualify for this exemption.

Tax 11.17(3) (3) Purchases by clinics and members of the medical profession. Purchases made by physicians and medical clinics that do not hold a Certificate of Exempt Status, “CES,” are subject to the sales or use tax unless specifically exempt by law. To be exempt, the items on the exempt list shall be furnished to patients at the direction of a physician, surgeon, or podiatrist in conjunction with providing medical service, except for items noted with an asterisk. These items are exempt even though not purchased under the direction of the health professional. The following is a partial list of taxable and exempt purchases of clinics and members of the medical professions.

Tax 11.17(4) (4) Sales by hospitals, hospital auxiliaries, clinics, and members of the medical professions.

Tax 11.17(4)(a) (a) The sales price from sales of the following are exempt from the tax:

Tax 11.17(4)(a)1. 1. Charges made by hospitals to patients for rooms, medical services, and other items including charges for anesthesia and anesthesia supplies, bandages applied in the hospital, blood and blood plasma, dressings applied in the hospital, intravenous solutions, laboratory tests, oxygen, radiation, and x-ray treatment.

Tax 11.17(4)(a)2. 2. Hospitals’ sales of food and food ingredients, except soft drinks.

Tax 11.17(4)(a)3. 3. Prepared food sold to the elderly or disabled by persons providing “mobile meals on wheels.”

Tax 11.17(4)(a)4. 4. Patient health records sold to a patient or to a person authorized by the patient to receive such medical records.

Tax 11.17(4)(b) (b) The sales price from the sales of the following are taxable:

Tax 11.17(4)(b)1. 1. A hospital’s specific charge to a patient for the rental of a television set.

Tax 11.17(4)(b)2. 2. Parking fees.

Tax 11.17(4)(b)3. 3. Sales of tangible personal property, items, property, and goods under s. 77.52 (1) (b) , (c) , and (d) , Stats., and taxable services by a clinic, which sales are not directly related to the rendition of medical services.

Tax 11.17(4)(b)4. 4. Sales of prepared food and other tangible personal property, items, property, and goods under s. 77.52 (1) (b) , (c) , and (d) , Stats., and taxable services by an organization affiliated with a hospital, except as provided in par. (a) 3.

Tax 11.17(4)(b)5. 5. Sales of soft drinks by hospitals.

Tax 11.17(4)(b)6. 6. An optometrist’s sales of tangible personal property and items, property, and goods under s. 77.52 (1) (b) , (c) , and (d) , Stats., including nonprescription sun glasses, contact lens solution, and other types of tangible personal property and items, property, and goods under s. 77.52 (1) (b) , (c) , and (d) , Stats., ordinarily taxable when sold at retail, unless the sales price from those sales are less than $2,000 during the calendar year. Optometrists whose receipts from taxable property, items, and goods equal or exceed $2,000 in a calendar year shall register with the department and obtain a seller’s permit. Those whose receipts from taxable property, items, and goods are less than $2,000 shall be exempt as occasional sellers and shall pay tax to their suppliers or a use tax, as appropriate, on purchases of taxable property, items, or goods.

Tax 11.17(5) (5) Hospital definition. Section 50.33 (2) , Stats., provides the definition of hospital which is to be used for sales tax purposes.