1. (1) General.

   1. (a) Although professional personnel in hospitals and clinics and other members of medical professions including physicians, surgeons, oculists, optometrists, and podiatrists regularly transfer antibiotics, bandages, splints, and other tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., to their patients in the performance of professional services, the transfer of that property, item, or good is an incident of a service rather than a retail sale of the property, item, or good. The persons are, therefore, deemed the consumers of the property, items, or goods in the same way they are the consumers of other materials and supplies used by them in the performance of their services. Accordingly, the suppliers of hospitals, clinics, and members of medical professions are retailers obligated to register and report tax on sales of tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), or (d), Stats., and taxable services, unless the transaction is specifically exempt from the tax.
   2. (b) Section 77.54 (14) (b), Stats., specifically provides an exemption for drugs furnished by a licensed physician, surgeon, or podiatrist to that person’s patient for medical treatment. Section 77.54 (22b), Stats., provides an exemption for durable medical equipment for home use, mobility-enhancing equipment, and prosthetic devices, and repair and replacement parts and accessories for such equipment or devices, if such equipment or devices are used by a human being. The scope of these exemptions is set forth in ss. Tax 11.08, 11.09, and 11.45.
2. (2) Purchases by hospitals. Purchases by hospitals, except hospital service insurance corporations under s. 613.80 (2), Stats., are exempt from the sales and use tax if the hospitals are nonprofit and, as such, qualify as charitable organizations under s. 77.54 (9a), Stats. Each is issued a Certificate of Exempt Status, “CES,” by the department. When purchasing property, items, goods, and services, a hospital shall furnish its CES number to its supplier, and the supplier may then make sales of every type of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and services to the hospital without tax. Hospitals organized for profit do not qualify for this exemption.

3. (3) Purchases by clinics and members of the medical profession. Purchases made by physicians and medical clinics that do not hold a Certificate of Exempt Status, “CES,” are subject to the sales or use tax unless specifically exempt by law. To be exempt, the items on the exempt list shall be furnished to patients at the direction of a physician, surgeon, or podiatrist in conjunction with providing medical service, except for items noted with an asterisk. These items are exempt even though not purchased under the direction of the health professional. The following is a partial list of taxable and exempt purchases of clinics and members of the medical professions.

   - See PDF for table

4. (4) Sales by hospitals, hospital auxiliaries, clinics, and members of the medical professions.

   1. (a) The sales price from sales of the following are exempt from the tax:

      1. 1. Charges made by hospitals to patients for rooms, medical services, and other items including charges for anesthesia and anesthesia supplies, bandages applied in the hospital, blood and blood plasma, dressings applied in the hospital, intravenous solutions, laboratory tests, oxygen, radiation, and x-ray treatment.
      2. 2. Hospitals’ sales of food and food ingredients, except soft drinks.
      3. 3. Prepared food sold to the elderly or disabled by persons providing “mobile meals on wheels.”
      4. 4. Patient health records sold to a patient or to a person authorized by the patient to receive such medical records.

   2. (b) The sales price from the sales of the following are taxable:

      1. 1. A hospital’s specific charge to a patient for the rental of a television set.
      2. 2. Parking fees.
      3. 3. Sales of tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services by a clinic, which sales are not directly related to the rendition of medical services.

      4. 4. Sales of prepared food and other tangible personal property, items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., and taxable services by an organization affiliated with a hospital, except as provided in par. (a) 3.

         Examples: 1) If a ladies’ auxiliary of a hospital operates a coffee shop on the hospital premises, and holds or is required to hold a seller’s permit, the sales by this business are taxable.

         2) Sales by a hospital auxiliary, which holds or is required to hold a seller’s permit, of an emergency response system that links an individual to medical attention by pushing a button which transmits to a communicator connected to a telephone and sends an automatic call for help are taxable telecommunications message services.

      5. 5. Sales of soft drinks by hospitals.
      6. 6. An optometrist’s sales of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., including nonprescription sun glasses, contact lens solution, and other types of tangible personal property and items, property, and goods under s. 77.52 (1) (b), (c), and (d), Stats., ordinarily taxable when sold at retail, unless the sales price from those sales are less than $2,000 during the calendar year. Optometrists whose receipts from taxable property, items, and goods equal or exceed $2,000 in a calendar year shall register with the department and obtain a seller’s permit. Those whose receipts from taxable property, items, and goods are less than $2,000 shall be exempt as occasional sellers and shall pay tax to their suppliers or a use tax, as appropriate, on purchases of taxable property, items, or goods.

5. (5) Hospital definition. Section 50.33 (2), Stats., provides the definition of hospital which is to be used for sales tax purposes.

   Note: Section Tax 11.17 interprets ss. 77.51 (3pj), (3pm), (7m), (9), and (11m), 77.52 (1) and (2) (a) 1. and 9., and 77.54 (9a), (14), (14r), (20n), (22b), (28), and (64), Stats.

   Note: Refer to s. Tax 11.002 for a description of permit requirements, how to apply for a permit, and the 15-day time period within which the department is required to act on permit applications.

   Note: Refer to s. Tax 11.33 for additional information relating to occasional sales.

   Note: The interpretations in s. Tax 11.17 are effective under the general sales and use tax law on and after September 1, 1969, except: (a) The exemption for needles and syringes used by diabetics became effective November 19, 1975, pursuant to Ch. 102, Laws of 1975; (b) The exemption for oxygen equipment became effective September 1, 1983, pursuant to 1983 Wis. Act 27; (c) The exemption for motorized scooters became effective September 1, 1985, pursuant to 1985 Wis. Act 29; (d) The exemption for diabetic apparatus and equipment and supplies for determining blood sugar levels became effective March 1, 1989, pursuant to 1987 Wis. Act 399; (e) The exemption for antiembolism elastic hose and stockings prescribed by a physician became effective October 1, 1989, pursuant to 1989 Wis. Act 31; (f) The purchases by a hospital service insurance corporation under s. 613.80 (2), Stats., became taxable effective September 1, 1985, pursuant to 1985 Wis. Act 29; (g) The exemption for parts and accessories for certain medical equipment became effective October 1, 1991, pursuant to 1991 Wis. Act 39; (h) The sales of meals by hospitals off the hospital’s premises became taxable October 1, 1991, pursuant to 1991 Wis. Act 39; (i) The exemptions for durable medical equipment for home use, mobility-enhancing equipment, and prosthetic devices became exempt October 1, 2009 pursuant to 2009 Wis. Act 2; (j) The change of the term “gross receipts” to “sales price” and the separate impositions of tax on coins and stamps sold above face value under s. 77.52 (1) (b), Stats., certain leased property affixed to real property under s. 77.52 (1) (c), Stats., and digital goods under s. 77.52 (1) (d), Stats., became effective October 1, 2009, pursuant to 2009 Wis. Act 2; (k) The exemption for patient health records under s. 77.54 (64), Stats., became effective June 23, 2017, pursuant to 2017 Wis. Act 17; and (L) The threshold for exempt occasional sales was changed to less than $2,000 in annual sales, effective for sales beginning January 1, 2018, pursuant to 2017 Wis. Act 59.

History

History: Cr. Register, May, 1978, No. 269, eff. 6-1-78; am. (4) (a) 1. and cr. (4) (b) 5., Register, January, 1983, No. 325, eff. 2-1-83; am. (3), Register, September, 1984, No. 345, eff. 10-1-84; am. (1) (a), Register, August, 1985, No. 356, eff. 9-1-85; am. (1) (b), (2), (3), (4) (b) 4. and (5), Register, March, 1991, No. 423, eff. 4-1-91; am. (1) (a), (3), (4) (a) 2. and (b) 4., renum. (4) (b) 5. to be (4) (b) 6. and am., cr. (4) (b) 5., Register, May, 1993, No. 449, eff. 6-1-93; EmR0924: emerg. am. (1) to (4) (a), (b) (intro.) and 3. to 6., cr. (4) (a) 3., eff. 10-1-09; CR 09-090: am. (1) to (4) (a), (b) (intro.) and 3. to 6., cr. (4) (a) 3. Register May 2010 No. 653, eff. 6-1-10; CR 10-094: am. (1) to (3), (4) (title), (a) 2., 3. Register November 2010 No. 659, eff. 12-1-10; CR 12-014: am. (4) (b) 6. Register August 2012 No. 680, eff. 9-1-12; CR 13-011: am. (3) Register August 2013 No. 692, eff. 9-1-13; CR 19-122: am. (4) (a) 3. Register July 2020 No. 775, eff. 8-1-20; CR 20-018: cr. (4) (a) 4., am. (4) (b) 6. Register July 2021 No. 787, eff. 8-1-21; CR 020-027: am. (3) (table) Register July 2021 No. 787, eff. 8-1-21.