South Carolina Enforces Sales Tax on O&P Devices Following Court Ruling

• South Carolina Supreme Court ruled on June 26, 2024, that the state’s sales tax exemption for O&P was unconstitutional
• The exemption previously allowed certain DME to be exempt from sales tax if it met specific criteria including being defined under Medicaid and Medicare laws, funded by these programs, and sold by providers in South Carolina
• The court found the requirement for DME sellers to have their principal business in South Carolina unconstitutional as it discriminated against interstate commerce
• As a result, the entire exemption was invalidated, requiring all DME sellers, both in-state and out-of-state, to collect and remit a 6 percent sales tax
• The imposition of this sales tax reduces the net reimbursement for O&P providers by 6 percent as the Medicare fee schedule includes sales tax but does not compensate for it
• The court suggested that a new non-discriminatory DME sales tax exemption could be enacted, potentially taking one to two years to develop
• Most states exempt O&P devices from sales tax if dispensed or sold with a prescription from a licensed medical provider

Source: opedge.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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