Were prescribed myotherapy, passive exercise, stretching, and massage services for pain relief subject to Texas sales tax?

Plain-English summary

The clinic taught therapeutic exercises to relieve pain and provided passive exercise, passive stretching, and massage under written prescriptions from licensed doctors, dentists, and chiropractors.

Those service fees were not subject to sales tax under the cited rules. The clinic did not need a sales-tax permit solely for those services and instead paid sales or use tax on taxable items it bought to provide them.

If the clinic also sold taxable equipment, over-the-counter medications, or other taxable goods, it needed a permit and had to collect tax on those sales.

Common questions

Were the prescribed clinic services taxable? No.

Did the clinic pay tax on its supplies? Yes.

When would it need a sales-tax permit? If it sold taxable items.

Citations and references

• 34 Tex. Admin. Code Rule 3.298(g)(7)
• 34 Tex. Admin. Code Rule 3.317(a)(2)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9001L0976G07

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

January 8, 1990

Dear ***:

Thank you for your letter dated January 2, 1990, concerning the
taxability of fees that you charge at your myotherapy and exercise
clinic.

*** indicated in our telephone conversation on January 5
that your services are performed under written prescriptions
issued by licensed doctors, dentists, and chiropractors. She said
that customers are taught therapeutic exercises to relieve pain.
Your services include passive exercises, passive stretching and
massages.

The fees that you charge for these services are not subject to
sales tax. Please refer to section (g)(7) of Rule 3.298 Amusement
Services and section (a)(2) of Rule 3.317 Massage Parlors, etc.
(copies enclosed).

As the provider of a nontaxable service, you will not need a sales
tax permit. You will simply pay sales or use tax on all taxable
items that you purchase to provide your service. However, if you
do sell any taxable items, such as equipment, or over-the-counter
medications, etc., you will need a permit to collect tax from your
customers.

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 1-800-252-5555 (ext.
3-4685) from anywhere in the United States or phone 512/463-4685.

Sincerely,
Julie Pesl
Tax Correspondence