thedentalarch.com THE DENTAL ARCH
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and not intended for use in directly substituting for a malfunctioning body part Illinois allows some items to be taxed at a reduced rate of 1 percent. Items that are considered medical appliances, (devices intended to substitute for a malfunctioning body part), are included in this category. Property taxable at the reduced rate in Illinois includes, but is not limited to: dentures as incident to furnishing professional services the statutory definition of medicinal claim and are not grooming and hygiene products In Illinois, use tax must be self-assessed and paid to the Department of Revenue when taxable property is purchased from a vendor who did not charge tax and the property is used or consumed, and not resold to a customer. Missouri Sales and Use Tax Like Illinois, use tax should be accrued and remitted on purchases from out-of-state suppliers and other sellers that do not charge Missouri sales/use tax. However, Missouri differs from Illinois on what items are taxable. Missouris general sales and use tax rate is 4.225 percent, plus local tax. In Missouri, dentists must pay tax on the purchase of items used or consumed in the practice of their profession. These items may include: For instance, if a dentist provides each patient with a small tube of toothpaste, floss, and mouthwash following their visit, the dentist must pay tax on these items since they are consumed in the practice. The dentist does not have to charge the patients for the tax on these items. Tangible personal property purchased by dentists and not used in the practice of their profession, but instead is sold to patients are taxable on the sale to the patient. For example, if a dentist sells accessories such as travel kits, mirrors, and other items not related to the practice of the profession, those sales are taxable on the sale to the patient. Several items are tax exempt in Missouri. Such items include: plates, and braces, as finished products including: include aluminum crowns, amalgam, bases and liners, denture repair materials, denture teeth, gold, mercury, pit and fissure sealants, porcelains, temporary filling materials, and the like; materials - Examples include acrylics, bonding materials, chrome alloys, implant materials, metal alloys; - Examples include arch bar splits, bone grafting materials, endodontic materials, face bow headgear, gutta percha points, mucosal grafts, orthodontic appliances (brackets, elastics, resins, separators, waxes, wires), root canal sealants, surgical wires. Failing to File Consumer's Use Tax Failing to accrue use tax on purchases and properly file use tax returns can lead to a variety of issues. Individuals and business making purchases from out-of-state suppliers or from the internet have the potential to be audited if they do not accrue and remit use tax on those purchases, as discussed above. Audits can lead to penalties and interest on unpaid taxes. In Illinois, the statute of limitations to assess a deficiency is three years from the time the return is filed. If a return has never been filed, the statute of limitations increases to six years. In Missouri, the statute of limitations for a deficiency is three years after the return was filed or required to be filed. However, if a return has never been filed, there is no statute of limitations on the time a deficiency can be assessed. This means several years of tax and penalties could be due if sales or use tax returns have never been filed. Conclusion While sales and use tax can be confusing, it is important to be aware of some of the intricacies of the sales and use tax law. By not properly filing a consumers use tax return for those taxable items where tax was not charged, the period subject to audit, as well as the tax, interest and penalties can be significant. It is always best not to get bitten when it comes to sales tax, but also consumers use tax. Anders CPAs + Advisors stand ready and willing to help. Contact an Anders advisor to learn more about filing use tax in your dental practice.
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Robert V. Willeford, Jr. is the director of State and Local Tax, Anders CPAs + Advisors, St Louis, Missouri. Mr. Willeford is a graduate of Southeast Missouri State University (B.S.B.A., 1995), and Saint Louis University School of Law (J.D., 2005). He is a member of The Missouri Bar and the State Bar of Texas and is admitted to practice in both states. He is also a Certified Public Accountant and is licensed in Missouri and Texas.
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Claire E. Rogers is a tax associate, Anders CPAs + Advisors, St Louis, Missouri. Miss Rogers is a graduate of Southern Illinois University Edwardsville (B.S.A., 2016, M.S.A., 2018).
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See https://dor.mo.gov/personal/consumer/
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Id.
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Ill. Admin. Code 130.1956(b).
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Ill. Admin. Code 130.1956.
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Id.
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ILCS Chapter 35 115/3-10; 110/3-10; Ill. Admin. Code 86 160.145; Ill. Admin. Code 86 140.101(b)(1) (A); Ill. Admin. Code 86 140.140(c); Ill. Admin. Code 86 140.109(a).
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Ill. Admin. Code 130.1956(a).
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Ill. Admin. Code 130.311(e).
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Ill. Admin. Code 130.1956(a).
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Id.
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Id.
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Ill. Admin. Code 140.140(c).
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Ill. Admin. Code 130.311(e).
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Id.
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Id. 18 Illinois Dept. of Rev. General Information Letter No. ST 00-0009-GIL, 01/25/2000.
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Ill. Admin. Code 130.311(e).
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Id.
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Id.
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Ill. Admin. Code 130.311(c).
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Ill. Admin. Code 130.311(e).
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Mo. Code Regs. 10-103.395(1).
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Mo. Code Regs. 10-103.395(3)(A).
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Id.
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Id.
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Id.
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Id.
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Mo. Code Regs. 10-103.395(4)(G).
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Mo. Code Regs. 10-103.395(4)(A).
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Mo. Code Regs. 10-103.395(4)(B).
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Mo. Code Regs. 10-103.395(4)(G).
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Mo. Code Regs. 10-103.395(1).
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Mo. Code Regs. 10-103.395(4)(F).
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Mo. Code Regs. 10-113.013(3)(C).
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Mo. Code Regs. 10-113.013(3)(A).
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Mo. Code Regs. 10-113.013(3)(D).
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ILCS 120/4.
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ILCS 135/12; Dept. of Rev. v. ABC Business, Ill. Dept. of Rev., Office of Administrative Hearings, Dkt. No. UT 1301, 01/24/2013.
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Mo. Rev. Stat. 144.220.
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Id.
If you make purchases online or from a seller not required to collect sales and use tax for your state, the burden may be on you, as the consumer, to pay any tax that may be due.
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