Sales Tax

Dentists pay sales tax on materials, supplies, dental laboratory products, and other tangible personal property which are used in the performance of their services.  The state regards dentists as consumers in this regard.  The sales tax can be paid in either one of two ways.  One way is for a dentist to pay to the product supplier the appropriate sales tax.  If a dentist wants to sell a patient the product, the total cost of a product, including tax and without a markup in price, can be passed on to the patient without collecting further sales tax.  If a dentist sells a product to a patient at a price higher than originally paid, then the dentist owes tax on the difference between the purchase price and the selling price.

The second way for a dentist to pay sales tax is to pay the supplier for the product without paying sales tax.  The supplier will require the dentist to provide it with his or her sellers permit information.  Then the dentist collects the sales tax from the patient upon sale of a product.

In most cases, it is the seller’s responsibility to collect sales tax on tangible personal property.  Examples of tangible personal property are toothbrushes and teeth whitening kits.  Services that may include an incidental transfer of property are not subject to sales tax.  An example of such services is in-office teeth whitening where a tray is fabricated and given to the patient.

Sales tax does not apply to medicines furnished by a dentist to a patient in the course of treatment.  Tax also does not apply to sales of medicines to licensed dentists for use in treating patients.  The regulatory definition of “medicines” includes permanently implanted articles such as dental implant systems, including dental bone screws and abutments.  Orthodontic appliances are specifically excluded from the definition of “medicines,” as are auditory, ophthalmic, ocular, or some prosthetic devices or appliances.

Dental laboratories are the retailers of the plates, inlays, and other products which they manufacture for dentists or other consumers.  Tax applies to their entire charges for such products regardless of whether a separate charge or billing is made for materials and manufacturing services.

Resources

Board of Equalization -- forms, guides, and other information are available online

Regulation 1506 -- Miscellaneous Service Enterprises

Regulation 1591 -- Medicines and Medical Devices

Sales tax rates vary by city and county.  Check tax rates at the BOE web site.

Applying tax to your sales and purchases – Frequently Asked Questions

Updated May 2007