Taking a closer look at eyeglasses and contact lens exemptions

Typically, retailers are required to charge sales tax on tangible personal property, but there are certain exemptions that mandate that no sales or use tax is applicable. For instance, in most states the sale of certain types of food or prescription medication is not taxable, but there are other exemptions that you should be aware of.

Some states have put into place sales tax exemptions for prescription eyeglasses and contact lenses. Of course, every state is different in how it approaches the taxability of eyewear, and if you have questions about the states you sell in, you should either check out our state sales tax guides, or get in touch the with the Department of Revenue offices for those states. But let’s take a look at some of the states that have ruled on this eye opening topic.

Here are some of the various ways states handle the issue of eyeglasses and contact lens sales tax exemptions.

• Idaho: According to the Idaho State Sales Tax Commission, as of July 1, 2015, prescription eyeglasses and eyeglass component parts are no longer taxable in the state. In addition, prescription contact lenses will not be taxable as of July 1, 2016.
• California: The California State Board of Equalization takes a different stance and taxes prescription eyewear at the wholesale level. According to its Article 7, physicians, surgeons, optometrists, and opticians are required to pay sales tax when purchasing prescription eyewear because they are considered the end consumer. The consumers they sell them to do not have to pay sales tax on them.
• Pennsylvania: The Pennsylvania Department of Revenue makes it easy by making both prescription glasses and contact lenses exempt from sales and use tax.
• Washington: Washington State has changed its policy, and now exempts the sale of prescription lenses and frames. Before 2004, only the sale of lenses was exempt from sales tax, but consumers still had to pay the tax on frames.
• Texas: The Lone Star State also exempts prescription eyewear from retail sales tax, but the state takes it one step further. Provided that non-prescription eyewear is prescribed by a licensed practitioner such as an ophthalmologist or optometrist, its sale is not taxed either. The Texas State Comptroller specifically says that nonprescription eyewear sold by an optician is not exempt from sales tax and the consumer will have to pay the tax.
• Louisiana: The law of this state says that prescription eyewear is taxable, but who pays it is determined by how the consumer is invoiced. If a consumer is billed solely for the eyeglasses or contact lens, they are required to pay sales tax on the transaction. But if the ophthalmologist, optician, or optometrist includes the charge for the eyewear in an invoice that also includes charges for professional services, the practitioner -- not the consumer -- is responsible for the sales tax.

As you can see, the taxability of prescription eyeglasses and contact lenses is a confusing topic. If you sell these products, be sure to get in touch with the states you sell in to ensure your compliance in this tricky area.