Sales and Use Tax for Dentists

In general dental services and appliances are exempt from sale and use tax. However, the sales of non-prescription tooth pastes and tooth brushes can be subject to sales and use tax. See Sec.151.313 http://www.statutes.legis.state.tx.us/Docs/TX/htm/TX.151.htm

If you decide to sell non-prescription items to your patients, the first step is to apply for a Sales and Use Tax permit. You can apply for a permit online using Webfile https://comptroller.texas.gov/taxes/permit/. The Sales and Use Tax permit also allows you to be exempt from paying sales tax on any items that you purchase for resale.

Next, you need to set up your dental software to track taxable transactions to allow for accurate record keeping. Contact your software help desk for helping in creating the necessary monthly taxable activity reports.

If you are required to collect sales tax on non exempt transactions such as toothbrushes and toothpaste, your reporting and remittance schedule depends upon how much sales tax you are collecting within a monthly, quarterly or yearly time frame. You are required to file a Texas Sales and Use Tax Return (Form 01-117) and submit the collected tax based on the collection levels below:

You must file Monthly if you collect $500 or more tax in a month.

You must file Quarterly if you collect <$500 per month or <$1500 per quarter.

If you collect less than $1,000 in tax per year, then you need only file one per year. However, if you are collecting close to this level of tax then a quarterly filing pattern is a safer option.

The Texas Comptroller allows multiple methods for reporting and payment including paper filing and Webfile (see https://comptroller.texas.gov/taxes/sales/filing-requirements.php). Your tax professional can assist you.