Covered Products Paid by the State.
Eyeglasses, durable medical equipment, prosthetic and orthotic devices, and
medical supplies as defined and covered under the Medicare program furnished to
Medicaid recipients are exempt from sales, use, or rental and leasing tax when
billed directly to and paid for directly by Medicaid pursuant to §§
Code of Ala. 1975.
(b) Payment for Medicare program furnished
items may be as the result of a contract between Medicaid and a manufacturer
who provides the item, bills Medicaid directly under the terms of the contract,
and receives payment directly from Medicaid.
(c) Payment may be as the result of contracts
with various suppliers, such as home health providers, who furnish the item,
bill Medicaid directly pursuant to the terms established by the Medicaid
program, and receive payment directly from Medicaid.
Medicaid Covered Products Paid by the
(a) The sales and use tax exemption
outlined in Section (1) above does not apply in instances where an item is sold
directly to and paid for by a Medicaid recipient. Should the nature of the
present Medicaid program change, the sales and use tax exemption outlined in
Section (1) would not apply to eyeglasses or durable medical equipment
purchased and paid for by a Medicaid recipient who later receives reimbursement
from Medicaid nor would the exemption apply with respect to that portion of a
co-pay purchase paid for directly by the Medicaid recipient. (§§
Code of Ala. 1975)
(b) Drugs as defined in §
Code of Ala. 1975, are specifically exempt from sales
and use tax; and, sales to Medicaid recipients are exempt regardless of who is
billed or who makes payment for said drugs.
(a) Hospitals and nursing homes purchasing
tangible personal property for use in furnishing services to Medicaid
recipients are not exempt from sales or use tax. Hospitals and nursing homes
are primarily engaged in the business of rendering services. They are not
liable for sales tax with respect to their gross receipts for meals, drugs, or
other tangible personal property used in rendering hospital or nursing home
services. Hospitals and nursing homes are deemed to be the purchasers for use
or consumption of such tangible personal property, and the sellers of these
items to hospitals and nursing homes are required to collect sales or use tax
on sales of such property to private hospitals and nursing homes.
Purchases by private hospitals and
nursing homes of drugs as defined in §
Code of Ala. 1975
, are specifically exempt from sales
and use tax. Prescription drugs sold separate and apart from services rendered
by a hospital or nursing home are also exempt from sales and use tax pursuant
Code of Ala. 1975
entitled Prescription Drugs, and
entitled Leasing and Rental of Tangible Personal Property.
Ala. Admin. Code r.
Administrative Monthly Volume XXXIII, Issue No. 02, November 26,
2014, eff. 12/4/2014.
Administrative Monthly Volume XL, Issue No. 02, November 30,
2021, eff. 1/14/2022.
Authors: Ginger Buchanan, Lee Ann Rouse
Statutory Authority: Code of Ala.