Washington Announces Tax Changes in Line with Streamlined Sales and Use Tax Agreement

The Washington Department of Revenue has issued a Special Notice to describe the limited changes in the application of the retail sales tax to medical related items effective July 1, 2004. These taxability changes and new definitions are a result of Washington’s compliance with the Streamlined Sales and Use Tax Agreement.

The most notable difference involves eyeglass frames sold for use with prescription lenses. Prior to July 1, 2004, only the prescription lenses were exempt from tax. The new exemption includes frames purchased from one vendor, even if the lenses are ground and fitted by a second vendor. Repair and replacement parts for the eyeglass frames are also included in the exemption. The exemption does not apply to frames for any nonprescription lenses, such as reading glasses or sunglasses.

Other changes of note include new definitions for terms such as drugs, prescription, mobility enhancing equipment, durable medical equipment, and prosthetic devices, with the latter term encompassing items formally defined as orthotic devices and ostomic items. A taxability change worth noting involves prosthetic devices, which were exempt prior to July 1, 2004, but are now exempt only when prescribed, fitted, or furnished for an individual by a properly licensed party. Please refer to RCW § 82.08.0281 and RCW § 82.08.0283 for these new definitions and the related exemptions.

In addition to the above references statutes, the Washington Department of Revenue is in the process of updating WAC 458-20-18801. This rule will provide guidance to parties who are impacted by the medical related changes driven by Washington’s legislative compliance with the Streamlined Sales and Use Tax Agreement.

http://dor.wa.gov/Docs/Pubs/SpecialNotices/2004/sn_04_eyeglassframes.pdf

(Special Notice-Eyeglass Frames and Medical Items, Washington Department of Revenue, 7/16/2004) 08/04

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