Ezel / Tax Rulings / TX
TX 8903L0935A09 Sales and/or Use Tax (State,Local,MTA) 1989-03-17

Were periodontal testing fees and the contents of dental test kits taxable?

Short answer: The testing fee was nontaxable, but the kit's treatment was unresolved because its contents were unspecified; the provider owed tax on taxable inputs.

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This page answers the general question as of 1989. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1989
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 an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
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) is the authoritative source for any reliance.

Plain-English summary

The fee dentists paid for the company's periodontal-disease testing service was nontaxable. The company remained responsible for sales or use tax on taxable items it used in Texas to provide that service.

The letter could not give a definite ruling on the test kits because the requester did not describe their contents. Drugs or medicines applied directly to a patient by the dentist could qualify for exemption, while equipment, appliances, or devices that were not drugs or medicines were taxable to the testing company.

Common questions

Was the dental testing fee taxable? No.

Were the kits taxable? The record does not decide because their contents were not identified.

Could any kit items qualify? Patient-applied drugs or medicines could; equipment and devices remained taxable to the provider.

Source

Original ruling text

March 17, 1989

Dear *:

Thank you for your recent letter concerning the taxability of kits sold by ABC
CO. to dentists for use in testing patients for periodontal disease.

ABC CO. is providing a dental testing service for dentists. The fee paid by the
dentist for the service is not taxable. ABC CO. will owe sales or use tax on
all taxable items used in Texas to provide the service.

Rule 3.284 Drugs, Medicines, Medical Equipment and Devices is enclosed for your
review. You did not indicate what is included in the test kits, therefore I
can't give you a definite ruling on the taxability of the kits. Drugs and
medicines applied directly to the patient by the dentist could qualify for
exemption. Please see section (a)(4) of the rule. Equipment, appliances or
devices that are not a drug or medicine will be taxable to ABC CO.

ABC CO. should report any use tax due on its use tax permit, which the company
has had since January 1988. Rule 3.346 Use Tax and Rule 3.286 Seller's and
Purchaser's Responsibilities are enclosed for reference.

This opinion is based upon the facts you presented. If there are additional or
different facts, this opinion may change.

Please feel free to contact me if you have any additional questions. You may
write me, call toll-free 1-800-531-5441 from anywhere in the United States or
phone 512/463-4685.

Sincerely,

Julie Pesl
Tax Correspondence

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