ALABAMA DEPARTMENT OF REVENUE
SALES, USE & BUSINESS TAX DIVISION
SALES & USE TAX RULE
810-6-1-.60. Opticians, Optometrists, and Ophthalmologists.
(1) The dispensing or transferring of ophthalmic materials, including
lenses, frames, eyeglasses, contact lenses, and other therapeutic optic
devices, by opticians or optometrists are retail sales subject to sales
tax. Such sales are taxable when sold to the ultimate consumer regardless
of whether the optician or optometrist manufactured the materials for sale
or purchased them for resale. The measure of tax on these sales shall be
the gross receipts or gross proceeds therefrom without any deduction for
the cost of the property sold, the cost of materials used, labor, service
cost, or any other expenses whatsoever. (Section 40-23-1(d))
(2) When a licensed optometrist exercises professional skills in examining
the eyes of a patient and prescribes eyeglasses, contact lenses, or some
other ophthalmic material which the optometrist dispenses or transfers
to that patient, the optometrist may separately state the charges for the
ophthalmic materials and the charges for the professional services on the
invoice to the patient and collect sales tax only on the separately stated
charges for the ophthalmic materials which were dispensed or transferred
to the patient, provided the optometrist also maintains records which clearly
reflect the separate sources of receipts. In the absence of separately
stated charges for materials and professional services on the invoices
to patients and the maintenance of documentation in the records of the
business, the tax shall apply to the total amount billed to the patient.
(Section 40-23-1(d))
(3) The dispensing or transferring of ophthalmic materials including
lenses, frames, eyeglasses, contact lenses, and other therapeutic optic
devices to patients by licensed ophthalmologists as a part of their professional
service is not subject to sales tax. Such licensed ophthalmologists are
considered the ultimate consumers of the ophthalmic materials. The sale
of the ophthalmic materials to licensed ophthalmologists by a supplier
thereof is a retail sale subject to sales tax and the supplier is responsible
for collecting the sales tax from the licensed ophthalmologist. The term
"supplier" shall include but not be limited to optical laboratories, ophthalmic
material wholesalers, or anyone selling ophthalmic materials to ophthalmologists.
(Section 40-23-1(d)) (Adopted November 5, 1959, amended June 12, 1978,
amended April 1, 1981, amended August 10, 1982, readopted through APA effective
October 1, 1982, amended April 3, 1987, amended December 10, 1996)
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