NEMED: Clarifytax laws
WELLS, Maine - Amy Kelly just learned she owes $13,000 in taxes for DME like hospital beds, the result of state audits putting providers between a rock and a hard place when it comes to deciphering whether an item is taxable.
"The law is unclear for use tax and sales tax," said Kelly, vice president and owner of Prime Care. "I plan to appeal, but in the meantime, I think it would be prudent to send them some money."
New England Medical Equipment Dealers in January sent a letter to the Maine Revenue Service seeking clarification on several tax questions:
* When is sales tax due on rental equipment? Providers are getting conflicting information on whether sales tax must be collected for each month of the rental period or only on the last month of rental.
* Are providers required to pay sales tax on items for which they have already paid a use tax if they are unable to collect the tax from the patient?
* Are wheelchairs subject to the use tax?
"The state is looking under every rock to pick up some bucks," said Jim Greatorex, president of Portland-based Black Bear Medical. "They are looking at everything that could possibly have a tax."
If certain DME is taxable, the state needs to make that clear, says Greatorex. If HMEs don't know when to collect taxes, they risk running afoul of state laws and wind up with large tax bills, he said.
Conflicting answers and auditors who themselves are unclear on the law don't instill confidence, he said.