Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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425.0000 PRESCRIPTION MEDICINES—Regulation 1591

Annotation 425.0164


425.0164 Sales to Insured Persons. A health maintenance organization (HMO) which operates a number of hospitals and clinics forms a subsidiary which purchases equipment and supplies for the hospitals and clinics. The purchasing subsidiary issues resale certificates to suppliers on the basis that it will resell the equipment and supplies to the hospitals and clinics and will report and pay tax at that time.

Suppliers of certain types of equipment, such as wheelchairs, beds, walkers, commodes, and oxygen deal directly with patients rather than the subsidiary. Billings are sent to and are paid by the purchasing subsidiary. These sales are regarded as taking place between the supplier and the patient. The sales are not made to the subsidiary for resale. The subsidiary pays for the equipment on behalf of the insurer. The subsidiary may not issue a resale certificate for such property. 1/26/95.