Durable Medical Equipment

Effective January 1, 2013, sales of Durable Medical Equipment and Related Supplies will be exempt from state, use or local sales tax only if the following criteria are met:

• The purchase must be paid directly by funds of South Carolina or the United States under the Medicaid or Medicare programs. 
• State or federal law or regulation authorizing the payment must prohibit the payment of the sales or use tax, and
• The durable medical equipment and related supplies must be sold by a provider who holds a South Carolina retail sales license and whose principal place of business is located in South Carolina.

However, all sales that do not meet the above criteria will be subject to the state sales tax rate of 6% and any applicable local sales and use tax.

Therefore, the last return to report the Durable Medical Equipment and Related Supplies sales and use tax of 1.75% plus any applicable local sales and use taxes will be for sales through December 31, 2012 and due on January 22, 2013.  Your business will no longer be required to collect and remit the Durable Medical Equipment tax as of Janaury 1, 2013.

Retailers who report exempt sales of durable medical equipment and supplies will begin using the Form ST-3, State Sales and Use Tax Return instead of the ST-501 Durable Medical Equipment and Related Supplies to report sales.  If you have qualifying sales of durable medical equipment and related supplies you should report on the ST-3 worksheet as follows:

      Line 1. Gross Proceeds of Sales (including durable medical equipment and related supplies)

      Line 2: Purchases Subject to Use Tax

      Line 3. Total (Add lines 1 and 2)

      Line 4. Allowable Deduction (should inlcude but not limited to sales of durable medical equipment and related supplies that meet criteria shown above)

 Forms:

ST-3     (State Sales and Use Tax)

ST-501 (Durable Medical Equipment)  DO NOT USE THIS FORM AFTER JANUARY 1, 2013

ST-389 (Schedule For Local Taxes)