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Texas delays implementing sales tax on medical billing services

We previously communicated the Texas Comptroller policy change to impose sales tax on medical billing services, effective April 1, 2020. However, on March 19, 2020, the Comptroller delayed the implementation of this policy change until after the 2021 legislative session in order to allow for legislative change as opposed to policy change. Unless a legislative change is enacted, medical billing services will become taxable effective Oct. 1, 2021, in accordance with the policy change.

As earlier communicated, the policy change considers any medical billing services to be a taxable insurance service and it is irrelevant as to whether the billing occurs before or after the submission of a claim.  

We will continue to monitor this and provide updates after the 2021 legislative session ends.

For more information on this topic or to learn how Baker Tilly specialists can help, contact our team.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.

Donna Scaffidi
Partner, CPA
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