Alabama – Certain Ophthalmic Materials Are Now Taxable

SALT Report 2543 – The state of Alabama recently enacted legislation that amends the sales and use tax exemption for sales of ophthalmic materials. House Bill 175 provides that dispensing or transferring ophthalmic materials such as lenses, frames, eyeglasses, contact lenses, or other therapeutic optic devices to a patient by a licensed ophthalmologist or licensed optometrist are now subject to sales tax.

However, professional services that are provided in connection with the dispensing or transferring of ophthalmic materials, including dispensing fees or fitting fees, by a licensed ophthalmologist or licensed optometrist are not subject to tax.

In the event that the ophthalmic materials are purchased by a customer who is covered by a third-party benefit plan, such as Medicare, sales tax will apply to the amount that the ophthalmologist, optometrist, or optician is reimbursed by the third-party benefit plan. Sales tax will also apply to the amount that the customer pays to the ophthalmologist, optometrist, or optician at the time of the sale.

The provisions in this bill are effective May 23, 2013.

For Further Information

Alabama State Legislature – House Bill 175, Laws 2013