Just look around to see the market for prescription glasses and contact lenses: Everyone knows at least a few people, often more, who wear them. Somebody’s selling, and people are buying, a lot of eyewear.
But the sales tax for prescription glasses and contact lenses varies greatly state to state – sometimes for reasons finer than the bottom line of an eye chart.
Complicated picture
Almost all states exempt these items, often terming prescription eyeglasses and contact lenses “medical” or “prosthetic” devices, like Ohio did six years ago. Georgia goes so far as to also forbid local municipalities from taxing prescription eyewear.
Some states, including Colorado, New Jersey and North Carolina, extend the exemption over-the-counter corrective glasses. “Any charge for eyeglass lens coatings (anti-reflective, scratch-resistant, anti-fog) that is separately stated on the invoice for corrective eyeglasses is not exempt,” Colorado adds.
That Rx is usually key to an exemption. (The Kansas Optometric Association even has a downloadable state exemption certificate.) In Maine, “nonprescription sunglasses, opera glasses, magnifying glasses, platform magnifiers and similar items are taxable. Cleaning solutions and supplies for contact lenses and eyeglasses are taxable.” Rhode Island pretty much agrees, as do Mississippi and Florida, among other states.
But conditions apply, depending on the state. Michigan taxes contact lenses but not eyeglasses. Exemptions in Nevada and Oklahoma are good only if the eyewear is paid for by Medicare or Medicaid. Arkansas exempts only when the doctor sells eyeglasses or contact lenses in fulfillment of their own, and not another doctor’s, prescription; retailers collect Arkansas sales tax.
And in South Carolina, “sale of prescription lenses that replace a missing part of the eye are exempted from the tax, as for example eyeglasses prescribed for a person whose natural lenses have been surgically removed. Eyeglasses, contact lens, hearing aids and orthopedic appliances, such as braces, wheelchairs and orthopedic custom-made shoes, do not come within the exemption.”
Why some tax
As with groceries nationwide, only a handful of states still levy sales tax or some variety of it on prescription glasses and contacts. New Mexico charges its gross receipts tax. Illinois doesn’t exempt but does charge a lower rate of the state Retailers’ Occupation Tax for prescription eyewear versus non-prescription.
Tennessee and Utah specifically exclude eyeglasses and contact lenses from the state list of exempted “prosthetic devices.” The reasoning? “Oculists and optometrists are the consumers of the ophthalmic materials including eyeglasses, frames and lens used or furnished to their patients in the performance of their professional services. The tax accordingly applies to the sale of the tangible personal property to them,” says Kentucky.
Like much in sales tax, levies on prescription eyewear could be changing. In Alabama, which has charged sales tax on these items for 12 years, a relatively new state representative plans to introduce a bill to remove the state sales tax on optical aids such as eyeglasses and contact lenses. (The state recently passed legislation to remove its sales tax on hearing aids.)
News reports said Rep. Mark Shirey from Mobile “wants to encourage local governments to join the state in dropping taxes on these essential items.” Shirey, by trade, is an optometrist.
Sales tax can be mighty blurry on many goods and services. To learn where your company’s products stand, contact TaxConnex. TaxConnex provides services to become your outsourced sales tax department.
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