Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Durable Medical Equipment Sales Tax topic
No spam. Unsubscribe anytime.
Committee advances bill to clarify and relieve sales-tax burden for durable medical equipment providers
Summary
House File 290, intended to resolve uncertainty about sales-tax treatment of durable medical equipment (DME) billed to insurers, was laid out for possible inclusion. Providers described repeated, time-consuming audits and urged clearer tax rules to avoid large preliminary assessments.
The House Tax Committee laid out House File 2 90 after testimony that current sales-tax rules create uncertainty and administrative burdens for providers of durable medical equipment (DME).
Representative Sam Anderson, the bill's author, said the measure would address long-running complexity in the tax treatment of equipment and supplies used to keep patients at home and help stabilize the DME provider market. "Tax policy in Minnesota has exempted all health care for over a century... DME providers do and they cover that cost of the sales tax," Anderson said, arguing the law's complexity has led to audits and financial strain for providers.
Jesse Newman, president of Corner Home Medical, described repeated post-audit negotiations with the Department of Revenue. Newman said his firm faced a large initial audit assessment in 2020 but, after several hundred hours of work with auditors, agreed to a much smaller final amount. "Our last tax audit in 2020, a COVID year, the bill due was over a hundred thousand dollars. And after we spent almost 500 hours of our controllers' time working with the auditor... our final tax owed was only $17,800," Newman said.
Newman and others described particular products that raise questions during audits: some items, such as stethoscopes, are clearly non-taxable while others, like bed pans, can be unclear and require detailed review. The witnesses said the difficulty is amplified because most DME charges are billed to insurers and, in many cases, insurers do not pay sales tax, so providers end up bearing the audit risk.
Representative Anderson said the bill aims to make tax policy clearer for providers and to prevent disruptions to patient services. The committee adopted an A1 amendment in committee and Representative Anderson renewed her motion that House File 2 90, as amended, be laid out for possible inclusion in the omnibus tax bill; the motion prevailed by voice vote.
Votes at a glance: House File 2 90 (as amended) ' Motion: lay out for possible inclusion in omnibus tax bill. Mover: Representative Sam Anderson. Outcome: laid out for possible inclusion (motion prevailed by voice vote).
