PURPOSE: Sections 144.010.1(10) and 144.020.1 (1), RSMo, tax the retail sale of tangible personal property. This rule interprets the tax laws as they apply to physicians, dentists and optometrists.

1. (1) In general, physicians, dentists and optometrists are rendering services not subject to tax. Tangible personal property purchased by physicians, dentists and optometrists and used or consumed in the practice of their professions is subject to tax when purchased. Tangible personal property purchased by physicians, dentists and optometrists and not used or consumed in the practice of their professions is subject to tax when resold by them.

2. (2) Definition of Terms.

   1. (A) Dentist—a person licensed to practice dentistry.
   2. (B) Optometrist—a person licensed to practice optometry.
   3. (C) Physician—a person licensed to practice medicine,which includes an ophthalmologist.
   4. (D) Used in the practice of the profession—employed in providing, directly or indirectly, professional care.

3. (3) Basic Application of Tax.

   1. (A) Physicians, dentists and optometrists must pay tax on the purchase of items used or consumed in the practice of their profession. Such items include, but are not limited to, medical instruments, bandages, splints, x-ray film, medical equipment, eyeglasses, frames and lenses.
   2. (B) Physicians, dentists and optometrists that sell items that are not used in the practice of their profession are responsible for collecting and remitting the tax on the gross receipts derived from these sales.
   3. (C) Sales by persons other than physicians or optometrists of eyeglasses, frames and lenses are subject to tax.
   4. (D) See also 12 CSR 10-110.013 Drugs and Medical Equipment, which contains an 12 CSR 10-103

explanation of other exemptions that may apply to these transactions.

1. (4) Examples.

   1. (A) A physician purchases diagnostic equipment, surgical tools and supplies for use in providing care to her patients. These purchases are subject to tax.
   2. (B) An optometrist purchases eyeglasses, frames and lenses and uses these items in the diagnosis, treatment and correction of conditions of the human eye. The optometrist charges the patient a separate amount for the frame and lenses. The optometrist should pay tax on these items because they are consumed in the practice of his profession. The amount charged the patient for the frame and lenses is not a sale at retail and is not subject to tax.
   3. (C) A retailer of prescription eyeglasses, lenses and frames advertises that an optometrist is available to examine customers. The optometrist performs eye examinations for customers of the retail but the retailer owns the inventory held for sale. Sales of the eyeglasses, lenses and frames are subject to tax because they are not sales by the optometrist.
   4. (D) An optician makes and sells eyeglasses to fill a patient’s prescription. These sales are subject to tax.
   5. (E) A dentist sells accessories such as travel kits, mirrors and other items not related to the practice of the profession. These sales are subject to tax.

AUTHORITY: section 144.010 and 144.020, RSMo Supp. 2001.* Original rule filed April 1, 2002, effective Oct. 30, 2002. *Original authority: 144.010, RSMo 1939, amended 1941, 1943, 1945, 1947, 1974, 1975, 1977, 1978, 1979, 1981, 1985, 1988, 1983, 1996, 1998, 1999, 2001 and 144.020, RSMo 1939, amended 1941, 1943, 1945, 1963, 1965, 1972, 1975, 1979, 1982, 1985, 1996, 1998, 2001. William H. Grant III, O.D. v. Director of Revenue (AHC 1995). An optometrist operated a business composed of two elements, a professional practice and the sale of articles of tangible personal property associated with eye care and eyeglass repair. The Commission found that sales of frames, eyeglass cases, and other item's reasonable related to providing the professional service were not subject to tax.