Sales tax bill stalls
FRANKFORT, Ky. - A bill that would exempt most durable medical equipment from state sales tax law has stalled in the state legislature.
Introduced in the House in February, H.B. 472 would clarify what items of durable medical equipment should be considered non-taxable. Although wheelchairs and hospital beds are identified as non-taxable, newer durable medical equipment like nebulizers, commodes and home ventilators are not specifically defined.
"We are trying to get the language changed so that it says that DME prescribed by a physician to treat a medical illness or disability (isn't taxable)," said Wayne Knewasser, president of the Kentucky Medical Equipment Suppliers Association (KMESA). "The revenue cabinet says it's not defined, and we are trying to get it defined for them."
Providers do not collect sales tax on items paid for by Medicare, Medicaid and other third-party payers, but when a provider undergoes a routine audit, he may be taxed based on the whim of the auditor, said Knewasser.
"When a (provider is audited), the auditor uses what appears to be his discretion and makes a determination as to which prescribed items are taxed," he said. "It shouldn't be taxed at all."
Adding to the confusion is inconsistency. A CPAP and head gear is sometimes considered an orthotic and prosthetic device instead of durable medical equipment because it is worn on the body. In that case, it is not taxed, but the blower unit is taxable.
"It's all over the board," said Knewasser.
In April, KMESA was rallying its members to contact lawmakers and ask to have the bill brought up for consideration. HME