SALT Report 1772 – The Texas Comptroller issued a corrected letter ruling regarding the taxability of services to repair, maintain, restore, or remodel ultrasound equipment and magnetic resonance imaging (MRI) equipment. The Comptroller has determined that these services are in fact subject to Texas sales tax.
In a previous letter ruling the Comptroller stated that repair, maintenance, restoration, and remodeling services performed on MRI equipment and ultrasound equipment were eligible for a sales tax exemption if those services were required by a government agency to protect the environment, or to conserve energy.
In Texas, equipment that emits radiation is regulated by the Texas Radiation Control Act and Texas Health & Safety Code Section 401.0005. The purpose of the Act is to “ensure effective regulation of sources of radiation” to protect occupational health, public health and safety, and the environment. Any equipment that requires maintenance or repair and is included in the Radiation Control Act is eligible for the exemption.
However, upon review of the previous letter ruling the Comptroller has now determined that ultrasound equipment and magnetic resonance imaging (MRI) equipment do not use radiation or radioactive materials and that the Texas Radiation Control Act does not oversee or regulate anyone who repairs, maintains, restores, or remodels ultrasound equipment. Therefore, the exemption does not apply.
This ruling supersedes and replaces Letter Ruling 201009943L as well as an article in Tax Policy News, December 2011 issue.
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