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Introduced Version House Bill 3237 History

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hb3237 intr
H. B. 3237


(By Delegates Kominar, G. White and Michael)
[Introduced March 25, 2005; referred to the
Committee on Finance.]




A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §11-15-9i, relating to providing that the exemption from consumers sales and service tax for drugs, durable medical goods, mobility enhancing equipment, prosthetic devices and insulin does not apply to purchases by health care providers for use in providing professional or personal services.

Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §11-15-9i, to read as follows:
ARTICLE 15. CONSUMERS SALES AND SERVICE TAX.
§11-15-9i. Purchases of drugs, durable medical goods, mobility enhancing equipment, prosthetic devices and insulin for use in providing professional services.

Notwithstanding any provision in this code to the contrary, the exemption provided in subsection (a), section nine of this article for
sales of drugs, durable medical goods, mobility-enhancing equipment and prosthetic devices dispensed upon prescription and sales of insulin to consumers for medical purposes applies only to sales directly to patients of drugs, durable medical goods, mobility enhancing equipment and prosthetic devices dispensed upon prescriptions and to sales of insulin to consumers for medical purposes. That exemption does not apply to purchases by hospitals, clinics, medical center facilities, physicians, dentists, optometrists or any other health care providers. These items are not exempt as purchases for resale when they are provided to patients as part of the provider's professional or personal services, but are subject to tax just as other tangible personal property purchased for use in the performance of a professional or personal service is taxable notwithstanding that the hospital, clinic, medical center facility, physician, dentist, optometrist or other health care provider may have purchased the drugs, durable medical goods, mobility enhancing equipment, or prosthetic devices for, or on behalf of, a specific patient pursuant to the issuance of a prescription either prior to or after the purchase.

NOTE: The purpose of this bill is to amend the code in order to neutralize the holding in Syncor International Corporation v. Palmer, 208 W. Va. 658 (2001). That case held, contrary to long standing administrative policy embodied in legislative rule 110 C.S.R. 15, §92, that radiopharmaceuticals purchased by medical service providers are exempt from sales tax when they are purchased for use and consumption in providing a professional service and are specially formulated by the pharmaceutical company for a specific, identified patient. The reasoning of the court might be used, however, and extended in a different case to exempt all purchases of drugs, durable medical goods, mobility enhancing equipment, prosthetic devices and insulin for use in providing a professional or personal service. This bill would codify long standing administrative policy embodied in legislative rule that was modified by the Syncor decision. It would reverse the loss of revenue resulting from that decision and would avoid future revenue loss should a court apply the Syncor reasoning to other purchases by health care providers for use in providing professional and personal services.

§11-15-9i is new; therefore, strike-throughs and underscoring have been omitted.
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