Colorado: Bill would clear up confusion over sales tax
By Theresa Flaherty, Managing Editor
Updated Sun February 27, 2011
DENVER - HME providers here are confident that a bill to exempt durable medical equipment from the state sales tax will be a no-brainer for state lawmakers.
"We have the right folks in our camp (and the right message)," said Doug Coleman, president of the Colorado Association of Medical Equipment Services and owner of Loveland-based Major Medical Supply. "The people that need these services are generally elderly or at-risk folks that are not financially well-heeled."
Introduced in January, H.B.11-1091 would specifically exclude DME, including medical supplies and mobility equipment, from Colorado's state sales tax, currently 2.9%. Colorado actually has a statute that does just that, but it doesn't clearly state which items are exempt.
That's left the law open to interpretation from city to city, says Coleman.
"The statute was pretty broad so we want to put some language in that mentions every category," he said. "I think most people if they read the existing statute would (agree) that this stuff should be exempt."
Coleman said he doesn't know of any providers currently collecting taxes on DME, even though that puts them at risk of audits. Major Medical, which has eight locations, is currently in the throes of audits in two separate cities, he said.
"If we are forced to collect taxes, many of our contracts don't allow us to pass taxes onto the patients," said Coleman. "If we are forced to collect taxes, it's essentially a reimbursement cut. That's just a non-starter for us."
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