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Lane, I have a client in NJ who is a chiropractor. They are

Hi Lane,I have a client...
Hi Lane,I have a client in NJ who is a chiropractor. They are looking to sell heart rate monitors to patients? Is there any reason why they would not have to charge sales tax to their patients on the purchase?Also, the company my client are buying them from provided them and ST-4 to fill out. This would just mean that they can buy them from the company without paying sales tax as long as my client charges sales tax on the monitors, correct?
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Answered in 49 minutes by:
10/18/2017
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 4,069
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
Verified

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

As amended by the Streamlined Sales and Use Tax law (P.L. 2005, c. 126) Effective 10/1/05

N.J.S.A. 54:32B-8.1, as amended by the Streamlined Sales Tax Agreement legislation, exempts the following when sold for human use:

drugs sold pursuant to a doctor’s prescription; over-the-counter drugs; tampons or like products; diabetic supplies; medical oxygen; human blood and its derivatives; prosthetic devices; durable medical equipment for home use; mobility enhancing equipment; and repair and replacement parts for any of the foregoing exempt devices and equipment.

Because the heart monitors are considered durable medical equipment for home use, your client would not charge sales tax.

Definiation of durable medical equipment:

“Durable medical equipment” means equipment, but not including mobility enhancing equipment, that: (1) can withstand repeated use; (2) is primarily and customarily used to serve a medical purpose; (3) is generally not useful to a person in the absence of illness or injury; and (4) is not worn in or on the body.

http://www.state.nj.us/treasury/taxation/pdf/ssutmedical.pdf

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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Customer reply replied 1 month ago
Thanks. ***** go to the website where my client is ordering from and order the same heart monitor it is calculating sales tax. Does that make a difference or is it the fact that the same product is being sold out of a doctors office?

What is the company your client is purchasing from?

Sales of durable medical equipment are exempt in NJ.

Other states may be different.

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Customer reply replied 1 month ago
Also should they fill out the st-4 and give it to the vendor so they don’t have to pay sales tax when purchasing?
Customer reply replied 1 month ago
Www.polar.com

That is correct.

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It looks like they're based in NY. Sales to customers outside of NY are not subject to sales tax.

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Customer reply replied 1 month ago
Is a heart monitor considered durable medical equipment?Why when I go to the website and is it calculating sales tax if
A). I live in MK
B). It is durable medical equipment?

A heart monitor is considered durable medical equipment, but the link to the website you provided looks like it's more of a fitness website.

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Customer reply replied 1 month ago
Ok but this is the company where he is buying the heart monitors from
Customer reply replied 1 month ago
Should he fill out the st-4 if they are going to charge him sales tax?

Yes.

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Customer reply replied 1 month ago
Ok but you still haven’t answered why as a consumer if I go to the website and buy the same heart monitor they are charging me sales tax and why is it correct that if the chiropractor sells the exact same heart monitor he does not have to charge sales tax to his patient because it is durable equipment.

The company with the website is located in NY. The company with the website does not look like a medical supply company.

NJ exempts the sale of durable medical equipment.

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Customer reply replied 1 month ago
But they are selling the medical supply that the doctor is reselling

I understand, but your initial question asked about your client charging sales tax in NJ.

You also mentioned that the company is asking your client to fill out Form ST-4.

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Customer reply replied 1 month ago
just to summarize are you saying that the company is located in NY and durable medical equipment is taxable in NY so that’s why they are charging sales tax? And since dr is in nj he doesn’t need to charge sales tax when he sells it?

Give me a minute because all of what you're saying is not what I am saying.

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As to NY,

"Sales of medical equipment, component parts, and medical supplies are exempt from New York State and local sales and use taxes unless sold for use in providing medical or similar services for compensation. Therefore, sales to physicians, dentists, hospitals, clinical laboratories, ambulance companies, and so forth are subject to tax. To qualify for exemption, medical equipment must be primarily and customarily used for medical purposes and must not be generally useful in the absence of illness, injury, or physical incapacity."

As to NJ, the sale is exempt.

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Customer reply replied 1 month ago
But if the Dr. is in NJ don’t the NJ rules apply even if he is buying from a NY company?
Customer reply replied 1 month ago
If yes then why would the NY company be charging sales tax in the first place to ship to nj if the sale is exempt?

NJ sales tax rules don't apply to NY sales.

NY sales to out of state customers are not subject to sales tax if the company selling does not have nexus (physical presence) in NJ.

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Customer reply replied 1 month ago
again why when I went to www.polar.com and went to buy the same heart monitor and I put in my NJ address to ship it would it be calculating sales tax if it should be exempt either because of medical durable good or nexus?

You will have to ask the company why they are charging sales tax for items sold to a NJ address. Do you know for a fact that the company does not have nexus in NJ?

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If the company has a warehouse in NJ, that constitutes nexus.

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Customer reply replied 1 month ago
I don’t. But even if they do have a physical address in NJ shouldn’t not tax be charged since it is a medical durable good?

The medical durable good is an exemption in NJ.

What the NY company is selling may not be exempt from sales tax in NY.

Two different states--two different sets of rules.

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Customer reply replied 1 month ago
if not exempt from NY sales tax they would still charge NJ sales tax if selling to someone from NJ even though exempt in NJ?
Customer reply replied 1 month ago
Assuming a warehouse in nj

As I mentioned, two different states with different rules.

You are trying to say that the NJ sales tax rules apply to NY.

Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 4,069
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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