Determining sales and use tax on items purchased within the healthcare industry can be a frustrating, confusing and time consuming effort. BSI Healthcare has a proven track record of successfully identifying and recovering overpaid sales and use tax for major healthcare organizations in California as well as Oregon, Washington and Oklahoma. Our accounts payable audit and risk assessment verifies the correctness of payments of sales tax to vendors as well as use tax payment obligations. BSI Healthcare enjoys an excellent documented tax recovery rate exceeding 95%.

The recovery process begins immediately. We verify and document claims, seek refunds from vendors and the Board of Equalization, and perform all tax claim follow-up. We will also provide recommendations for process improvement and staff training.

One of the most complex sales and use tax states for the healthcare industry is California. Unlike most other states California does not provide complete exemption from sales and or use tax to hospitals. Other non-profit entities in addition to hospitals are not exempt from the payment of such taxes in California. This means with certain exception California hospitals are subject to sales and use tax on all purchases. However, the taxing statutes due afford exemption from the payment of tax on certain items defined as ‘medicine’ in accordance with Regulations 1591, 1591.1.

It is primarily these two California Regulations and the interpretation of them that result in overpayment of tax by hospitals. In most instances, we see that California based hospitals overpay sales and use taxes unknowingly due to misinterpretation of the regulations or lack of sound tax compliance practices.

Our claim process involving any use tax refund filed with the California Board of Equalization follows these general guidelines:

• We review use tax reports and payment to the BOE
• Document all potential tax overpayments
• Prepare and file all required refund documentation with the California BOE
• Monitor the refund and as necessary, review and discuss the refund issues with the BOE
• We bring the refund claim to resolution

BSI Healthcare also provides audit defense work for clients undergoing state sales and use tax audits ensuring they pay only what is due under statute. Our defense work also incorporates all tax overpayments made during the period under audit. Per our client’s request, BSI Healthcare will review any state proposed statistical sampling tests to confirm it accurately reflects our client's transactions.
In addition, BSI Healthcare maintains a comprehensive item master file to assist our clients verify their tax codes reflect current state tax laws and regulations. This allows our clients to determine and pay sales and use tax to their various suppliers with 100% confidence.

Sales and Use Tax Services:

• Sales Tax Consulting
• Item Master Review
• Audit Defense
• Tax Overpayments to Vendors
• Client-Specific Tax Training