We have continued to stay up-to-date on the latest regulations relating to Sales and Excise Taxes and would like to share a brief summary with you so that you can stay informed and ask your vendors any questions you may have before you receive your first monthly bill for 2013.
Sales & Use Tax Returns Due Jan. 20 for Most States
Please remember that Annual Sales Tax Returns are due Jan. 20 each year—unless you are required to file them Monthly (due the 20th of each month) or Quarterly (due the last date of the month in Jan, Apr, Jul, Oct). Which type filer you are is dependent upon how old your business is—if you filed for a Sales Tax ID Number and your business is less than 1 year old, you should be filing monthly). This year, due to the holiday weekend, the return is due Jan. 22.
Sales Tax Returns are very easy to complete and it is typical for a dentist to have $0 taxes due on the Sales Tax Return, which is why we recommend your office fill them out instead of hiring us to do it for you.
Use Taxes are due on anything you buy across State lines for which you were not charged Sales Tax when buying the item. Double check your invoices, especially when doing online shopping, to make sure you are paying the Use Tax when appropriate.
Georgia has a Sales Tax Exemption for Durable Medical Equipment—please read below for more information.
Federal Excise Tax: An Update
You have heard us talking about the Federal Excise Tax and many of the State Dental Associations, as well as the ADA, have been keeping you informed as well, due to the fact they have been vigorously fighting the legislation.
Dentists are NOT responsible for assessing, collecting, filing, or paying the Medical Excise Tax. This new tax, of 2.3%, is being charged by suppliers and labs on some materials and finished dental devices that you purchase from them. It is these suppliers and labs that have a responsibility to file the taxes with the government.
We highly recommend you double check your invoices to make sure the vendor is charging you the 2.3% tax only on the appropriate items and are not simply applying the 2.3% tax to all items you purchase from them.
Items you purchase, for which this tax does NOT apply, are items known as more “traditional” items: crowns, bridges, dentures, etc. Whether the lab chooses to pass the cost of the 2.3% they will now have on their supply purchases is up to the lab and I encourage you to have a conversation with them to ask them how they are interpreting the new law. Make sure to ask them how they will handle Sleep Apnea devices.
Beware that if you import crowns, bridges, dentures or other items you use for patients from a foreign dental lab, the law indicates that you are what is known as an “importer” and you could very well be subject to having to pay this tax as an importer.
Georgia Sales Tax Exemption
For those who operate a business in Georgia, please be aware that the regulations we have been expecting since 2011 are now completely in effect as of Nov. 19, 2012. These regulations state you do not owe Sales Tax for prosthetic devices (implants, crowns, dentures, fillings, etc) and you do not owe Sales Tax to the vendor from whom you buy the device if it has been prescribed by the dentist to be permanently transferred to the patient.
Your Willeford Group Team of Advisors