Professional Service Businesses That Also Sell Goods Should Pay Special Attention to Their Sales Tax Obligations

December 13, 2021

Myrtle Beach, South Carolina, USA Skyline

By: Betsy Goldstein, SALT Manager

At a glance

  • The main takeaway: A new South Carolina Revenue Ruling addresses the sales tax obligations of professional services providers that also sell goods, specifically eye doctors selling prescription eyeglasses.
  • Assess the impact: Sales tax application will depend on several factors, including who is selling, who is buying and what is being sold.
  • Take the next step: Aprio’s State and Local Tax (SALT) team can advise your business on sales tax compliance requirements to ensure you don’t incur unexpected liabilities and penalties.

Schedule a free consultation today to learn more!

The full story:

South Carolina, like many other states, does not broadly tax the sale of professional services, such as services rendered by an eye doctor. However, South Carolina is one of a minority of states that do tax the sale of prescription eyeglasses.

Does that mean that an ophthalmologist must register for and collect sales tax on sales of prescription eyeglasses? Well, to use the most popular answer given by state tax practitioners . . . it depends. A recent South Carolina Revenue Ruling provides detailed guidance on this issue.[1]

The ruling explained

According to the guidance, ophthalmologists and optometrists are medical doctors that provide medical services. An optician is a maker or dealer of optical items, such as prescription eyeglasses. In some cases, an ophthalmologist or optometrist may also be an optician.[2] Each of these scenarios creates a different sales tax application. Therefore, the application of sales tax will depend on several factors: (1) who is selling, (2) who is buying and (3) what is being sold.

Evaluating the taxability of the most common scenarios

If an optician is not also a medical doctor providing professional services, then he or she is merely a retailer providing retail sales and must obtain a retail license and collect and remit sales taxes on the gross proceeds from retail sales — whether they’re from the sale of prescription eyeglasses or other types of eyeglasses. It does not matter whether or not the sale is covered by insurance; sales tax will still be due on the gross proceeds from the sale. The optician should be able to provide a resale certificate to its suppliers so that it is not charged sales tax on its purchase of frames and lenses that it resells.

For example, assume the retail price for a pair of glasses is $500, but under an agreement with the insurance company, the glasses are sold to the customer for $400, of which $250 is paid by the customer and $150 is reimbursed by the insurance company. The optician will charge sales tax to the customer on $400 since those are the gross proceeds.

If an ophthalmologist or optometrist provides only professional services, then these services are not subject to sales tax. However, if the doctor also prescribes and furnishes prescription eyeglasses to the patient as part of the professional service, there is no sales tax due on the charges for professional services, which include both the eye exam and the prescription glasses, even if the price of each is separately stated. Instead, the doctor must pay the tax on the cost of the glasses and other supplies purchased for use in rendering the services.

For example, assume an ophthalmologist bills a patient $100 for an eye exam and $500 for prescription eyeglasses, and that the ophthalmologist purchased the frames and lenses from its manufacturer for $200. In this case, since the glasses are being provided to a patient in connection with the eye exam, the ophthalmologist does not collect sales tax on the $600 charge to the patient. Instead, the ophthalmologist will pay sales tax on $200, representing its purchase of tangible personal property from its manufacturer (either the manufacturer will collect the tax at the time of purchase or the ophthalmologist will self-remit it). It is worth noting that the glasses don’t have to be furnished at the same time as the eye exam.

If the ophthalmologist also sells nonprescription glasses (e.g., nonprescription sunglasses) to patients, then the doctor is treated as engaging in the business of selling tangible personal property at retail, similar to the optician example. Therefore, the doctor would be required to collect sales tax from the patient on the price of the sunglasses, and he or she should be able to provide a resale certificate to their supplier.

There may also be instances where an ophthalmologist is running a “dual business,” in which he or she is providing both medical services and prescription eyeglasses to patients, as well as acting as an optician to sell prescription eyeglasses to nonpatients. In this instance, the doctor should purchase all supplies at wholesale from the supplier (i.e., tax-free by providing a resale certificate to the supplier).

When the product is withdrawn from inventory, the tax burden will vary depending on which role or service the doctor is providing. If a set of prescription glasses is being provided to a patient along with services, the doctor will be liable for the sales tax based on the retail price of the glasses (i.e., the price at which they are sold to the public). Based on the example above, that would be $500, and the ophthalmologist is permitted to pass along the sales tax to the patient on the invoice. If the glasses are being provided to a nonpatient, sales tax should be charged to the customer on the gross proceeds from the sale.

The bottom line

These nuances in how sales tax is applied from state to state and among different businesses operating in the same state make sales tax confusing and difficult to comply with. Aprio’s SALT team has experience dealing with these issues and can advise your business on the appropriate sales tax compliance requirements and obligations to ensure that you do not incur unexpected liabilities and penalties.

We constantly monitor these and other important state tax topics, and we will include any significant developments in future issues of the Aprio SALT Newsletter.

Contact Betsy Goldstein, SALT Manager, at or Jeff Glickman, partner-in-charge of Aprio’s SALT practice, at for more information.

This content was featured in the November/December 2021 SALT Newsletter.

[1] SC Revenue Ruling #21-14 (November 16, 2021).

[2] See S.C. Regulation 117-308.7.


Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.

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About the Author

Jeff Glickman

Jeff Glickman is the partner-in-charge of Aprio, LLP’s State and Local Tax (SALT) practice. He has over 18 years of SALT consulting experience, advising domestic and international companies in all industries on minimizing their multistate liabilities and risks. He puts cash back into his clients’ businesses by identifying their eligibility for and assisting them in claiming various tax credits, including jobs/investment, retraining, and film/entertainment tax credits. Jeff also maintains a multistate administrative tax dispute and negotiations practice, including obtaining private letter rulings, preparing and negotiating voluntary disclosure agreements, pursuing refund claims, and assisting clients during audits.

(770) 353-4791