Can doctors, dentists, and veterinarians buy prescription pads and other printing tax-free using a resale certificate?

Plain-English summary

Someone asked whether doctors, dentists, and veterinarians are exempt from paying Texas state sales tax on printed prescription script pads and other printing orders, and also requested a blank resale certificate.

The Comptroller's answer: No, these purchases aren't exempt. Doctors, dentists, and veterinarians perform nontaxable medical services -- they are not considered to be reselling tangible personal property to their patients. Because they aren't "reselling" anything, they cannot issue a resale or exemption certificate to buy printed materials like prescription script pads tax-free. Those items are simply taxable supplies used in the course of running the practice.

What this means for you

Doctors, dentists, and veterinarians

Printing supplies you buy for your practice -- prescription pads, letterhead, and similar materials -- are taxable purchases. Because you provide nontaxable medical/professional services rather than reselling goods, you can't use a resale certificate to avoid paying sales tax on them; you should expect to pay tax at the time of purchase like any other business supply.

Accountants and tax professionals

This is a clean illustration of the general resale-certificate rule: a resale or exemption certificate is only valid for items that will genuinely be resold or that qualify for a specific exemption. A service provider whose output is a nontaxable service (medical care) generally cannot extend that nontaxable status to its own supply purchases via a resale certificate.

Common questions

Q: Can a doctor's office use a resale certificate to buy office/prescription printing tax-free?
A: No, per this letter -- because medical services are nontaxable and doctors aren't reselling tangible personal property, they cannot issue a resale certificate for these purchases.

Q: Does this mean all supplies used in a medical practice are taxable?
A: This letter specifically addresses printed materials like prescription pads; other supplies could have their own separate exemptions not addressed here.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9806629L

Original ruling text

June 3, 1998

Dear **:

This is in response to your request for a ruling on whether doctors, dentists
and vets are exempt from paying state sales tax on printed script pads and
other printing orders?

You also asked for a copy of a blank resale certificate.

Response: Doctors, dentists and veterinarians perform nontaxable medical
services. As such, they are not considered to be reselling tangible personal
property. They may not issue a resale or exemption certificate for printed
materials such as script pads used in their practice.

I have attached as a word document a copy of a resale certificate. If you are
unable to open this document, you may e-mail me your fax number and I will be
glad to fax you a copy of a resale certificate that you may duplicate as
needed.

This opinion is based on the facts presented. Other facts though similar may
provide a different result.

I hope this information answers your questions. If you need additional
information, please call me toll-free at 1-800-531-5441, extension 3-4502. The
direct line is 512/463-4502. You may also write to Tax Policy Division,
Comptroller of Public Accounts. You may also e-mail our tax help section at:

Sincerely,

Gilbert Zamora
Tax Policy Division