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Subcommittee advances bill restoring sales-tax exemption for durable medical equipment
Summary
The Sales and Income Tax Subcommittee voted to send S.266, which removes an in-state business-location requirement from an existing sales-tax exemption for durable medical equipment (DME), to the full committee after adopting a technical amendment.
The Sales and Income Tax Subcommittee voted unanimously to forward S.266, a bill that would restore a sales-tax exemption for durable medical equipment by removing a requirement that providers’ principal place of business be located in South Carolina.
The bill, introduced by Sen. Coleman Rice and described to the subcommittee by staff, deletes language a state court had found unconstitutional. "This bill removes [the] phrase" requiring a provider's principal place of business to be in the state, a subcommittee staff member said during the hearing.
The change responds to a June 20, 2024, state Supreme Court decision that struck down the exemption’s in-state location requirement as violating the interstate commerce clause. Commenters at the hearing said the ruling has increased costs for providers and reduced patient access to needed equipment.
Earl Hunter, a commenter, told the panel durable medical equipment products "are essential in providing care to patients that allow them to stay in their homes," and said the state has lost a substantial number of DME providers since 2013. Hunter said the number of locations has fallen "from 242 locations down to 135 locations." He added members of the industry were "losing on average 8 to $10,000 per month" because they cannot collect tax from Medicare and Medicaid payers.
Kim Cannon, treasurer of the South Carolina Medical Equipment Suppliers Association and a provider with Hawthorne Medical Equipment, said the loss is tangible for individual businesses. "From a personal side, from a business side, this has been, since June of last year, costing our business about $8,000 a month," Cannon said, adding the cost could force providers to reduce service to Medicaid waiver clients.
Lawmakers adopted a technical amendment to make parallel statutory language consistent, changing a reference so paragraph A reads "Medicare or Medicaid" rather than "Medicare and Medicaid." After the amendment was adopted by voice vote, a motion to give S.266 a favorable report as amended passed by voice vote and the bill was moved to the full committee.
The hearing record and commentors noted that the original exemption was enacted in February 2007. Proponents said the exemption’s restoration is intended to prevent further erosion in the provider network that supplies incontinence supplies, mobility aids and other equipment used in home care.
No fiscal estimates or recorded roll-call vote counts were provided at the subcommittee level; both the amendment and the favorable report were approved by voice vote.
