In an advisory opinion, the Department of Taxation and Finance ruled that a provider of mobile medical services sold to medical facilities is subject to New York State and local sales and use taxes.
The Petitioner submitted the following facts: the Petitioner provides medical equipment and staff to its customers, which are typically healthcare facilities. In its agreements with customers, the Petitioner promises to provide the services of its staff to operate Petitioner-owned equipment at the customer’s facility. The Petitioner’s equipment varies based on the type of patient testing or treatment to be performed, but the testing is generally some type of imaging, such as x-ray or ultrasound.
The Petitioner’s employees deliver the equipment, test and quality-check the equipment, and remove the equipment at the end of each day of service. A licensed technician provided by the Petitioner operates the equipment while it is at the healthcare facility. The only other person involved with a procedure performed using the equipment is the attending physician, who generally is not an employee of the healthcare facility/customer. The attending physician would direct the technician on the medical aspects of conducting the test/procedure.
Retail sales of tangible personal property and sales of certain enumerated services are subject to sales tax. A “sale” includes an outright sale and a lease, rental, or license to use if possession, but not title, passes to the customer. The opinion held that the doctor is “involved with the procedure because of his or her relationship to Petitioner’s customer and the customer’s patient.” Based on this relationship the opinion concludes that the Petitioner has transferred control of the equipment and has made a sale of the equipment to its customer. As a result, sales tax is due on the Petitioner’s charges to its customers for the sale. Any separately stated charges for the Petitioner’s employees to operate the equipment while it is at the customer’s site would not be taxable.
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