Ezel / Tax Rulings / CA

Did government payment for tangible personal property sold to Medi-Cal patients make those sales exempt from California sales tax?

Short answer No. Sales to Medi-Cal patients were taxable to the same extent as sales to anyone else, and payment by the government agency administering aid did not change the result.
State
CA
Ruling
Annotation 530.0180
Tax type
Sales and Use Tax
Issued
1968-04-10
Issued by
California State Board of Equalization
Requested by
A doctor selling tangible personal property to Medi-Cal patients (identity redacted)
Topics
medi cal government payments statutory exemptions tax reimbursement
Source
View Original PDF

Apply this to your situation

This page answers the general question as of 1968. Ask about yours and see what current California tax law says, with citations.

Currency note: this ruling is from 1968
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is a California State Board of Equalization Tax Counsel opinion dated April 10, 1968, issued to a doctor concerning sales to Medi-Cal patients and published by CDTFA as support for a sales and use tax annotation. It states the general result under the absence of a statutory exemption and does not identify the particular property sold. A provider should check current medical-product, prescription, Medi-Cal, and government-payment exemptions. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

A doctor questioned a county approving officer's refusal to pay sales-tax reimbursement on sales made to Medi-Cal patients.

California explained that sales tax applied to tangible personal property unless a statute provided an exemption. There was no general statutory exemption for sales to Medi-Cal patients.

Those sales therefore were taxable to the same extent as sales to other people. The fact that a government agency administering aid paid for the property did not change the result because those agencies were not exempt.

What this means for you

Medical providers and tax professionals

Identify the property sold and any specific current exemption. Patient eligibility for Medi-Cal and payment through a government program do not, by themselves, establish a sales-tax exemption under this opinion.

Common questions

Q: Were all sales to Medi-Cal patients exempt?

A: No. The opinion found no general statutory exemption for those sales.

Q: Did government payment make the transaction exempt?

A: No. Payment by the agency administering aid did not change the tax result.

Q: Did the opinion decide whether a particular medical product was exempt?

A: No. The source does not identify the property sold and states only the general Medi-Cal-patient rule.

Source

Original ruling text

STATE OF CALIFORNIA

530.0180

STATE BOARD OF EQUALIZATION
April 10, 1968

Dear Dr.
This is in reply to your letter of March 18 to Mr. Lloyd Palm requesting a ruling on the application of tax on sales made to Medi-Cal patients. We understand that your concern is over the propriety of the approving officer of San Francisco county disallowing payment of sales tax reimbursement on sales made to your Medi-Cal patients. The California Sales and Use Tax Law is a tax on retailers for the privilege of engaging in business in this state. Sales tax applies to sales of tangible personal property and the retailer must collect and pay to the state tax measured by the sales price. The only exemption from liability for tax is provided by statute. There is no statutory exemption for sales to Medi-Cal patients. Such sales are taxable to the extent that they would be if made to persons other than Medi-Cal patients. The fact that payment is made by a governmental agency does not change the result since such agencies are not exempt. If you have any further questions, please feel free to write. Very truly yours, T. P. Putnam Tax Counsel

By Burt E. Banks

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