SALT Report 2084 – The Florida Department of Revenue issued a technical advisory regarding the taxability of copies of medical records. The Taxpayer in this case, partners with hospitals, health systems, physicians, and clinics to process and fulfill medical record requests and to maintain federal laws related to the release of a patient’s medical information.
Generally, the Taxpayer will receive a request for medical records from a patient, an attorney, an insurance company, a hospital, etc. Once a request is received, the Taxpayer will contact the health care facility and arrange to make photocopies of the patient’s medical records. Upon completion, the Taxpayer will deliver the copies to the requesting party in one of two ways:
- Delivery Method One – Paper copies of the medical records are printed, packaged, mailed, and delivered by either the U. S. Postal Service or shipped and delivered by a third party company
- Delivery Method Two – The Taxpayer provides the customer access to their medical records electronically through a web portal or in some cases, the Taxpayer “pushes” the records via File Transfer Protocol.
The Taxpayer requested guidance as to whether its fees for medical records delivered either electronically or by a delivery service are subject to sales tax.
The Department determined that when the Taxpayer provides copies of medical records electronically they are not subject to tax, because the Taxpayer is not providing its customer with any tangible personal property. Accordingly, any charges associated with the electronic delivery method would not be subject to tax.
However, medical records delivered in a hard copy format are taxable as tangible personal property. With the exception of notary and postage fees, tax will apply to fees associated with the provision of medical records delivered in this manner. Additionally, copies of medical records provided by a third party copy company are taxable.
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