Dentist Service – Sales Tax Fact Sheet & Industry Guide

Sales

Dental treatment, diagnostic, and preventive care services are not taxable. This includes services performed by licensed dentists engaged in general or specialized dentistry, orthodontists, dental surgeons, and other licensed practitioners. However, those in the dental industry may make some taxable sales.

Note: While sales tax may not apply, gross revenues for dental services are subject to MinnesotaCare taxes.

Taxable Sales

Sales of certain items sold by a dentist are taxable.

Examples include:

Athletic sports mouth guards
Mouthwash and toothpaste, unless product is only available through a prescription written by a health care professional, then the product is exempt as the sale of a drug
Toothbrushes (manual and powered)
Tooth bleaching agents and trays (including whitening strips) for the patient to use at home

Note: Tooth whitening services performed in the clinic are not taxable sales.

Nontaxable Sales

Sales of the following items are not taxable:

Prescribed and over-the counter drugs for human use
Prosthetic devices, including repair and replacement parts
Disposable or single patient use items used with prosthetic device
Accessories and supplies for the effective use of a prosthetic device

Drugs

Sales and purchases of prescription and over-the-counter drugs for human use are exempt from sales tax. Examples include:

Antibiotics
Anesthetics, local and topical
Medical grade oxygen
Pain and sedation medicines

For more information, see Drugs.

Over-the-Counter Drugs

Over-the-counter drug means a drug that contains a label that identifies the product as a drug as required by Federal Regulations. For more information, see Grooming and Hygiene Products.

Vitamins and minerals are not included in the definition of over-the-counter drugs. They are taxable as dietary supplements. For more information, see Dietary Supplements.

Prosthetic Devices

Sales and purchases of prosthetic devices are exempt from sales tax. A prosthetic device means a replacement, corrective, or supportive device, including repair and replacement parts, worn on or in the body to:

Artificially replace a missing portion of the body
Prevent or correct physical deformity or malfunction
Support a weak or deformed portion of the body

Examples include:

Braces
Crowns, bridges, and other implants
Dentures or artificial teeth

This exemption includes disposable or single patient use items used in conjunction with prosthetic devices. Before July 1, 2013, the disposable and single use items were taxable.

For more information, see Prosthetic Devices.

Medical Records

Equipment Sales

Local Sales Taxes

Some cities and counties have local sales and use taxes. If you are located in or make sales into an area with a local tax, you may owe local sales and use tax. For more information, see Local Sales and Use Taxes.

To determine the sales tax rate, use the location where the product is received by the customer, typically your business or a delivery address. You can use our Sales Tax Rate Map or Sales Tax Rate Calculator to help you determine the sales tax rate.

Note: The map and rate calculator do not include special local taxes.

For more information, see:

Critical Access Dental Provider

You are allowed an exemption from sales tax on certain purchases if you meet the following requirements:

You’re a critical access dental provider approved as a charitable organization
No more than 15% of your patients are covered by private dental insurance

Sales

Nontaxable Purchases

Taxable Purchases

All other purchases are taxable. Examples of taxable purchases include:

Lawn and garden maintenance
Lodging
Paintings and other décor
Public computers
Purchases or leases of motor vehicles
Purchases of prepared food, soft drinks, candy, and dietary supplements
Vending machines

Taxable Purchases and Use Tax

Items you use to operate your business are taxable unless an exemption applies. Several services are also taxable.

If you do not pay sales tax on a taxable purchase, then use tax is due.

Taxable Purchases

TAXABLE PURCHASES	EXAMPLES
General items	Cleaning supplies and chemicals Communication devices Computer hardware and software Copies Furniture and fixtures Office equipment and supplies Supplies (paper cups, paper towels, toilet tissue)
Dental items	Composite tips Dental models and impression materials Dental tools and equipment, including disposable Durable medical equipment for use in clinic, including repair parts Laboratory supplies and equipment Medical manuals, books, charts, pamphlets Needles and syringes for diagnostic use Tooth polishing cups/brushes and medication dispensers X-ray equipment and film, including bite wing pressure tabs For more examples, see a list of Taxable Dental Items.
Items given away	Appointment reminder cards or stickers Business cards Calendars Oral hygiene products given to patients to take home (floss, mouthwash, toothbrushes, toothpaste) Toys and stickers
Protective equipment	Bibs for patient Face masks, head covers, sleeve shields Gloves designed for protection against injury, but not general use gloves Safety glasses and goggles (nonprescription) X-ray protective clothing and equipment
Utilities	Electricity, gas, and water
Taxable services	Building and grounds cleaning and maintenance Detective and security Lawn and garden maintenance Parking services Paging services For more information, see a list of taxable services

Use Tax

If you buy equipment, supplies, or other taxable items for your business and the seller does not charge Minnesota sales tax, you owe use tax on the cost of the items. If your business is located in an area with a local tax, you may also owe local use tax.

Some common situations where you may owe use tax include:

You buy taxable items or services online without paying sales tax
You withdraw an item from inventory to use (instead of selling it), donate, or give away
You buy taxable items outside of Minnesota
You buy taxable items in another Minnesota city or county with a lower (or no) local sales tax

For more information, see Use Tax for Businesses and Local Sales and Use Taxes.

Taxable Dental Items

The following is a list of items that are taxable when purchased and used by a licensed dentist or other health care professional.

For more information, see Taxable Purchases and Use Tax.

Cleaning supplies and chemicals
Communication devices
Composite tips
Copies of medical records
Cups for dispensing medications
Dental health educational products
Dental models
Dental products given to the patient to take home (oral hygiene products, dental floss, mouthwash, toothbrushes, toothpaste)
Dental tools and equipment
Digital X-ray equipment, sensors, and disposable sensor sheaths
Disinfecting fluid and surface sanitizers
Disposable equipment and tools, including single use prophy angles and disposable mirrors
Disposable sanitary and protective items (shields and bibs, sleeve covers, head covers)
Face masks
Filter masks
First-aid products and kits
Gifts and promotional items
Impression materials and trays
Laboratory equipment, supplies, and reagents
Medical forms and records (including retrieval fee)
Medication dispenser
Needles and syringes used for testing or diagnosis, such as drawing blood
Oxygen tanks (for non-medical use)
Pouches (purchased by the dentist in transporting plaster impressions to dental labs)
Radiological supplies
Tongue depressors
Tooth polishing cups and brushes
Trays
Whitening products given to patients to take home
X-ray equipment and film (bite wing pressure tabs)

Nontaxable Purchases

The following purchases are not taxable when purchased by a dentist.

Medical Supplies

Purchases of medical supplies are exempt from tax when:

Purchased by a licensed dentist or health care professional
Used directed on a patient as part of treatment

To claim this exemption, you must give your vendor a completed Form ST3, Certificate of Exemption. Specify the Medical supplies for a health-care facility exemption.

For a list of dental items that qualify for this exemption, see Exempt Dental Items.

The medical supplies exemption does not include:

Durable medical equipment, including repair and replacement parts
Disposable or single use medical equipment and surgical instruments

Materials Used in Treatment

Materials and items that remain in the patient’s mouth are not taxable. Examples include:

Composite restoratives
Silver amalgam
Sealants

Other Nontaxable Purchases

Accounting and legal services
Clothing for general wear, including scrubs, lab coats, and gloves (latex, nitrile, cloth)
Magazine subscriptions and newspapers (single issue magazine purchases are taxable)

Exempt Dental Items

The following is a list of items that are not taxable when purchased and used by a licensed dentist or other health care professional.

For more information, see Nontaxable Purchases.

Clothing

Endodontic

Medical Supplies (Used Directly on Patients for Treatment)

Antiseptics
Cotton applicators
Dental oral hygiene products (dental floss, mouthwash, prophy paste)
Disposable needles and syringes when used to treat a patient such as giving an anesthetic
Gauze pads and strips
Nonprescription drugs

Orthodontics

Acrylic retainers
Bands (elastic, metal)
Brackets
Buttons
Cleats
Face bows
Hooks
Positioners
Space maintainers
Springs
Tubes

Prescription Drugs (Administered)

Antibiotics
Fluoride (prescription dose)
General anesthetic drugs, gases
Local anesthetics
Medical grade oxygen
Nitrous oxide
Pain medication
Sedation drugs
Tooth bleaching agents
Topical anesthetics

Prosthetics

Acrylic, including tints
Artificial teeth
Clasp and bar wire
Complete dentures
Crowns and bridges (gold, porcelain, stainless steel, resin, aluminum)
Denture reline materials
Occlusal mouth guards
Partial denture
Porcelain

Restorative

Surgery

Bone materials
Bone plate systems
Hemostatic pack agents
Implants

Filing Returns and Record-Keeping

When filing your return, you must report all sales tax collected and use tax you owe.

Filing Returns

When filing your return, you must report all sales tax collected and use tax you owe.

If you are not registered for sales and use tax, you must contact the Minnesota Department of Revenue and register to collect and report taxes. Call Business Registration at 651-282-5225 or 1-800-657-3605 (toll-free).

For more information, see Sales Tax Return Due Dates.

How to Report Sales and Use Tax

Record-Keeping

It is important to keep good records to determine the correct amount of state and local tax you owe.

Your records should include:

bills, receipts, invoices, cash-register tapes, and any other documents that support the entries in your books
exemption certificates
shipping documents
worksheets used to prepare your tax returns

For more information, see the Dentist Service – Sales Tax Fact Sheet & Industry Guide