Oklahoma – Bill Expands Direct Pay Permit Eligibility

SALT Report 2428 – The Oklahoma Legislature passed a Bill that makes several changes to the eligibility requirements for obtaining a direct pay permit. House Bill 1399 authorizes those who purchase medicine, medical equipment and prosthetic devices, in which the cost is reimbursed by Medicare or Medicaid, to directly remit sales tax to the Oklahoma Tax Commission.

Qualified purchases include, but are not limited to:

  • Drugs for the treatment of human beings,
  • Medical appliances,
  • Medical devices and,
  • Corrective eyeglasses,
  • Contact lenses,
  • Hearing aids,
  • Prosthetic devices,
  • Durable medical equipment, and
  • Mobility-enhancing equipment

Anyone issued a direct pay permit under the new category is required to keep adequate records, maintained separate from all other confidential patient records, to document their purchases of drugs, medical appliances, medical devices, and other medical equipment that are exempt under 68 O.S. Sec. 1357.6. All patient records must include the following information:

  • Patient case number or account number,
  • Type of insurance, and
  • Item description or product number

Additionally, the Bill provides that if a Taxpayer qualifies for a direct pay permit and owes an average of $500 or less per month they may, instead of filing a monthly report, file a quarterly report and remit the taxes on or before the 20th day of the month following the calendar quarter. However, if the taxes are not timely paid each quarter, they will be considered delinquent, and the taxpayer will be required to file and remit monthly.

The provisions of this Bill were effective April 24, 2013.

For Further Information

Oklahoma State Legislature – House Bill 1399, Laws 2013