Senate Bill No. 655
(By Senators Sharpe, Edgell, Helmick, Plymale, Jenkins, Unger,
Dempsey, Fanning and Minard)
____________
[Introduced March 21, 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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