You likely know that Washington state has a “Sales and Use” tax. While this tax primarily applies to retail transactions and does not apply to professional services such as dentistry, we want to help you stay informed about Washington’s rules as they may apply to certain aspects of your dental practice. Understanding which transactions are subject or exempt from this tax can help you avoid unexpected tax liabilities.
Please note that this tax is separate from Washington’s Business & Occupation (B&O) Tax, which is based on your gross income from providing dental care services.
The following transactions are exempt from sales tax.
- Professional Dental Services – The services you provide as a dentist, such as exams, cleanings, fillings, and other patient care, are exempt from Washington sales and use tax. This exemption applies even if you use or furnish materials and supplies while providing care. The primary purpose of these transactions is the professional service, not the sale of tangible goods.
- Dental Prosthetic Devices – Sales of qualifying dental prosthetic devices to dentists are also exempt from retail sales tax. This includes dental prosthetic devices that replace or support missing or defective teeth, including dentures, crowns, bridges, and similar items. If you purchase these items from a dental laboratory or another dentist for use in patient care, no sales tax should be charged, provided the items meet the legal definition of prosthetic devices. Dentists and dental labs should keep records to show that the items sold qualify as prosthetic devices and are exempt from sales tax. When purchasing for resale, a reseller permit should be provided to the vendor to document the wholesale nature of the transaction.
The following transactions are not exempt.
- Sales of Tangible Personal Property to Patients – If your practice sells items such as toothbrushes, toothpaste, mouthwash, or other over-the-counter dental products directly to patients, these sales are subject to retail sales tax. The exemption only applies when these items are used as part of providing dental care.
- Purchases of Office Supplies and Equipment – Purchases of office furniture, computers, general supplies, and other tangible personal property for use in your practice are subject to sales and use tax. There is no general exemption for these items, even though they are used in the operation of a dental office.
Lastly, if your practice is making a purchase that you believe to be exempt, it will be important to use the “Sales Tax Exemption Certificate For Health Care Providers” at the time of transaction with the vendor. The form can be found at: https://dor.wa.gov/sites/default/files/2022-02/27-0055.pdf . Its purpose is to provide the vendor with assurance that the items are being used in the course of providing patient care, which allows the seller to treat the purchase as exempt from retail sales tax when permitted under Washington law. Both the dental practice and the seller must retain copies of the exemption certificate in their records, as required by the Washington Department of Revenue.