Sales & Use Tax Blog

Agile Victorious in Ruling Re: South Carolina Exemption for Drugs Paid for by Medicare Part A

Agile Consulting has won its argument with the South Carolina Department of Revenue regarding whether hospitals and Long-Term Acute Care (“LTAC”) facilities can qualify for the South Carolina sales tax exemption for drugs paid for by patients with Medicare A coverage.  Provided that the facility has a license as a skilled nursing facility, then it is properly licensed as a “nursing home” and is entitled to claim the benefit of the exemption provided in SC Code Ann. ยง12-36-2120(28)(f). The certification required is issued on an annual basis by the SC Department of Health & Environmental Control and states the maximum licensed capacity of nursing home beds the facility is allowed to maintain and operate.  Some facilities may only have a portion of the facility licensed in this manner.  In cases such as that the drug purchases will need to be bifurcated and apportioned to only include Medicare A drugs within the nursing home portion of the facility.

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