Ohio – SSUTA Response Letter Submitted to Governing Board

SALT Report 2968 – The Ohio Department of Taxation has submitted a letter that addresses concerns raised in the Streamlined Sales and Use Tax Governing Board’s Preliminary Report on 2013 Annual Recertification.  Ohio’s letter is in response to the Board’s concerns that the State does not exempt all purchases of durable medical equipment made by certain medical facilities.

Specifically, the report states that Ohio’s exemption for hospital beds purchased by hospitals, nursing homes, and other medical facilities may violate the Agreement because the State does not exempt all sales of durable medical equipment to these facilities.

Ohio argued that the SSUTA allows a member state to enact an entity-based exemption for purchases of hospital beds under Section 316.C.2 of the Agreement.  Further, the letter states that CRIC addressed this very issue during a 2010 compliance review and ultimately found that Ohio was not out of compliance.

Additionally, Ohio pointed out that in 1981 they enacted an exemption for hospital beds sold to individuals with medial conditions and that the State has offered an exemption for purchases of hospital beds by hospitals, nursing homes, and medical facilities since 2005.   Ohio argued that they are now in difficult position because they are being asked to either exempt all durable medical equipment, or tax all durable medical equipment.

Ohio notes that if they expand the exemption for durable medical equipment to include purchases by these entities it would negatively impact the State’s revenue and therefore, it is not likely win support in the General Assembly.  Likewise, the State argued that they are not likely to eliminate the 1981 exemption for individuals, as it would also draw opposition.

The Board’s decision regarding this matter has not yet been made. However, Ohio’s petition for full membership was reviewed by CRIC on September 5, 2013.  CRIC found the State to be in compliance with the requirements of the SSUTA and will vote on Ohio’s petition for full membership during its meeting on October 29 – 30, 2013.  If approved, Ohio would become a full member state effective January 1, 2014.

For Further Information

Ohio Department of Taxation – Ohio Compliance Response Letter