Does a dental practice have to charge sales tax on teeth-whitening gel refills it gives patients to use at home?

Plain-English summary

The Missouri Department of Revenue ruled that a dental practice must charge sales tax when it gives patients teeth-whitening gel refills as part of its professional whitening treatment -- even though the gel is a dentist-prescribed product tied to a professional service, and even though property that dentists buy and use in their own practice is normally excluded from sales tax.

Applicant is a dental practice that gives some patients gel refills for professional whitening. The gel isn't sold at retail -- it's provided only to the practice's own patients by a dentist, as a professional tooth-whitening treatment. According to the gel manufacturer's website, it's a dentist-prescribed, home teeth-bleaching system, meaning the patient applies it themselves at home.

Normally, Section 144.010.1(13), RSMo, keeps a dentist's own professional-use purchases out of the sales-tax system: tangible personal property that a dentist buys and uses "in the practice of their professions" is treated as a purchase for use, not for resale, and it's the dentist's own purchase (from their supplier) that gets taxed -- not a further retail sale to the patient. The Department also pointed to Section 332.366, RSMo, which says that providing teeth-whitening services with products not available over the counter is "the practice of dentistry," including when a hygienist or assistant applies the formulation under a licensed dentist's appropriate supervision.

The problem here is supervision. The gel refills aren't available over the counter, and a licensed dentist prescribes and provides them -- but the patient applies the gel at home, with no dentist supervising that application. Because the actual application happens outside any dentist's supervision, the Department concluded it doesn't qualify as "the practice of dentistry" for purposes of Section 332.366, RSMo. That means the professional-use exclusion doesn't shield this transaction, and Applicant must charge sales tax when it issues the gel refills to patients.

What this means for you

Dental and orthodontic practices offering take-home products

If your practice provides patients with take-home products -- like teeth-whitening gel, bleaching trays, or similar dentist-prescribed items the patient uses unsupervised at home -- this ruling indicates you likely need to charge sales tax on that transaction, even if you're a licensed dentist and the product is tied to a course of professional treatment. The key question the Department asked wasn't "did a dentist prescribe or provide this?" but "was a licensed dentist supervising when it was actually applied?" Products applied in-office, under your direct supervision, sit on different footing than products a patient takes home and uses alone.

Cosmetic and aesthetics providers with similar take-home components

Any practice that combines an in-office professional service with a take-home product a customer or patient self-administers should look closely at whether that hand-off point changes the tax treatment. This ruling shows Missouri drawing a line at the moment of application/use, not at who prescribed or dispensed the product.

Accountants and tax professionals advising dental or medical practices

When evaluating whether a professional's sales-tax exclusion under Section 144.010.1(13), RSMo, applies, check whether the underlying statute defining "the practice of [that] profession" (here, Section 332.366, RSMo, for dentistry) actually covers the specific activity at issue -- including any supervision requirements. A product being dentist-prescribed or professionally issued is not, by itself, enough; the statute's own definition of the regulated practice controls.

Common questions

Q: Why does the Department say sales tax applies here, if a dentist is providing the gel as part of treatment?
A: Because the sales-tax exclusion for dentists' professional-use property depends on the activity actually qualifying as "the practice of dentistry" under Section 332.366, RSMo. That statute requires a licensed dentist's "appropriate level of supervision" when teeth-whitening products not available over the counter are applied. Since the patient applies the gel alone at home, with no dentist supervising that step, the activity falls outside the statute's definition, so the exclusion doesn't apply and sales tax is owed.

Q: Would the answer be different if the gel were applied in the dental office under the dentist's supervision?
A: The ruling doesn't decide that scenario directly, but its reasoning turns entirely on the lack of supervision at the point of application. In-office application under a licensed dentist's supervision is the kind of activity Section 332.366, RSMo, describes as the practice of dentistry, so that fact pattern would likely be analyzed differently. Any practice in that situation should confirm its own facts with a tax professional or seek its own ruling.

Q: Does it matter that the gel isn't available over the counter and is dentist-prescribed?
A: Not decisively. Section 332.366, RSMo, does treat providing whitening products "not readily available to the public through over-the-counter purchase" as potentially the practice of dentistry -- but only when applied under a licensed dentist's appropriate supervision. Being prescription-only and dentist-provided satisfies part of that test but not the supervision requirement, which is what defeated the exclusion here.

Q: Can another dental practice rely on this ruling for its own gel refills or take-home whitening products?
A: Not automatically. This is a Missouri letter ruling, binding on the Department only with respect to the requesting Applicant, only for three years from its date, and only so long as the facts and law remain unchanged. A different practice should confirm its own facts match those described here and consult a tax professional before relying on this result.

Q: Is the dentist's own purchase of the gel from its supplier taxable too?
A: The ruling doesn't directly re-answer that question for this specific gel, but it cites the general rule in 12 CSR 10-103.395: tangible personal property that dentists purchase and use or consume in the practice of their profession is taxable when purchased by the dentist. The ruling's focus is on Applicant's separate obligation to charge tax when issuing the refills to patients.

Source

• Landing page: Missouri DOR Rulings Search
• Ruling: LR 8227

Original ruling text

This is a letter ruling issued by the Director of Revenue under Section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated November 4, 2022.

The facts as presented in your letter ruling request, subsequent phone conversation, and information gathered from your vendor's website, are summarized as follows:

Applicant is a dental practice. As part of their practice, Applicant provides some patients gel refills for professional whitening. This gel is not for retail sale, and is sold only to patients of the practice by a dentist as a professional tooth whitening treatment. According to the vendor of the gel's website, it is a dentist-prescribed, home teeth bleaching system.

ISSUE :

Should Applicant be charging their patients sales tax when the gel refills are issued as part of their professional teeth whitening?

RESPONSE :

Yes. Applicant should be charging sales tax when the gel refills are issued to their patients.

Section 144.020, RSMo, imposes a sales tax on the privilege of making retail sales of tangible personal property or providing certain taxable services in this state.

However, section 144.010.1(13), RSMo, provides that the definition of "sale at retail" shall not include:

...(i). purchases of tangible personal property made by duly licensed physicians, dentists, optometrist and veterinarians and used in the practice of their professions shall be deemed to be purchases for use or consumption and not for resale.

This is further described in 12 CSR 10-103.395:

In general, physicians, dentists, and optometrists are rendering services not subject to tax. Tangible personal property purchased by physicians, dentists, and optometrists and used or consumed in the practice of their professions is subject to tax when purchased. Tangible personal property purchased by physicians, dentists, and optometrists and not used or consumed in the practice of their professions is subject to tax when resold by them.

Section 332.181, RSMo, provides:

No person shall engage in the practice of dentistry in Missouri without having first secured a license as provided for in this chapter.

Additionally, section 332.366, RSMo, contains:

Any person who provides teeth whitening services to another person by use of products not readily available to the public through over-the-counter purchase shall be deemed to be engaging in the practice of dentistry. Licensed dental hygienists or dental assistants may apply teeth whitening formulations, formulations, but only under the appropriate level of supervision of a licensed dentist as established by rule. Any individual who take the dental impression of another person or who performs any phase of any operation incident to teeth whitening, including but not limited to the instruction or application of on-site teeth whitening materials or procedures, except under the appropriate level of supervision of a licensed dentist, shall be engaging in the practice of dentistry.

Here, Applicant provides gel refills to their patients as part of their teeth whitening services. Section 332.336, RSMo, describes two situations where a non-dentist may apply the teeth whitening services, and have it still be considered the practice of dentistry for purposes of the statute. Both require the "appropriate level of supervision of a licensed dentist." Although the gel refills are not readily available through over the counter purchase, and provided by a licensed dentist, they are applied without any supervision from a licensed dentist, at the home of the patient.

Because the gel is applied outside of the supervision from a licensed dentist, it is not considered to be a part of the practice of dentistry for purposes of section 332.336, RSMo.

This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals.  If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change.  For this reason, the interpretation set forth above should be reviewed on a regular basis.  Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.

Should additional information be needed, please contact Legal Counsel J. Ross Shelton, General Counsel's Office, Post Office Box 475, Jefferson City, Missouri 65105-0475, phone (573) 751-0961.

Sincerely,

Wayne Wallingford

WW:MAS:CRF:JRS:km