95-047
Response
August 23, 1995
Request
XXXXX
RE: Advisory Opinion - Record keeping
requirements for sales of exempt home medical equipment.
Dear
XXXXX,
We
appreciated the opportunity to meet with you and the other representatives of
your industry. After considering your
remarks, discussing the record keeping requirements with our Auditing staff,
and reviewing the law, we conclude that the purchaser must sign an exemption
certificate verifying that the requirements for exemption have been met. That certificate and the prescription must
be maintained in your tax records.
Section
59-12-106(2) (copy enclosed) of the Utah Code requires an exemption certificate
signed by the purchaser. Regarding the
TC-72 1, our auditing staff does not require you to use that particular form,
but it does require some form which contains the same information and the
purchaser's signature. Perhaps we can
work with you to either design a different exemption certificate or incorporate
the exemption certificate into your invoices.
In any case, you must use some type of exemption certificate. If an auditor finds a sale on which no sales
tax has been collected, the auditor will assume that the sale was taxable
unless you have the exemption certificate and prescription. In that case, we will look to you for the
tax on that item. As long as the
exemption certificate is in your files, we will look to the customer for any
tax that may be due.
You
mentioned in a phone conversation with our staff that you frequently set up
contracts to supply oxygen and equipment to your customers on an on-going
basis. We consider each of those
contracts as a single transaction for purposes of the exemption certificate so
long as it covers only tax exempt purchases or rentals. Our exemption certificate requirements will
be satisfied if you have the customer sign one exemption certificate to cover
all purchases or rentals under that contract.
Please
let us know if we can be of further assistance.
For
the Commission,
Alice
Shearer
Commissioner